The DIRECTV-Dish Sale: If It’s Such a Good Deal, Why Did AT&T Sell Out?

By Phillip Swann
The TV Answer Man –Follow me on X.
Former editor of Satellite DIRECT magazine. Reported on DIRECTV for 30 years.

TV Answer Man, I have enjoyed your articles on DIRECTV buying Dish. My question is if the sale is such a good deal, why did AT8T sell its remaining part of DIRECTV to the private equity company? Wouldn’t AT&T want to be part of the future? — Jeremy, Brooklyn.

Jeremy, DIRECTV announced this week that it was buying Dish’s satellite TV service, and its live streaming service, Sling TV. AT&T also announced that it was selling its remaining 70 percent stake in DIRECTV to TPG, the private equity firm that previously held 30 percent. When the two deals close, which is not expected until the second half of 2025, TPG will be the sole owner of the new DIRECTV-Dish company.

DIRECTV CEO William Morrow says the Dish purchase will help DIRECTV reinvent itself — offering slimmer packages at reduced prices — by using the increased clout of the 18 million combined DIRECTV-Dish audience to extract better terms from programmers. So, if that’s true, if the deal is such a good one for DIRECTV, why does AT&T want to exit the company nine years after it first purchased it?

Two reasons:

1. The deal will help DIRECTV but likely not prevent its eventual decline.
The Dish sale should enable DIRECTV to be more competitive in the next several years. However, the satellite TV industry is in sharp decline thanks to the explosion of streaming services such as Netflix, Max, Hulu and Disney Plus. Consumers now prefer the convenience of watching a sub-$20 a month streamer over installing a dish on the roof and paying $100 a month. (Fancy that.) There’s still an audience for satellite in rural areas where Internet access is more limited, but even that will start to decline as government funded programs help eliminate the rural Internet gap. For the next handful of years, DIRECTV will be able to maintain a satellite audience, but it will also have to accelerate efforts to convert existing subs to streaming (DIRECTV Stream, DIRECTV Via Streaming) and attract new streaming subscribers. That will not be easy which AT&T understands better than anyone.

2. AT&T has wanted out for the last several years.
AT&T originally thought that the purchase of DIRECTV in 2015 would help it attract new customers for its wireless services. But the plan backfired when DIRECTV began losing subscribers in droves soon after the sale. (DIRECTV has lost at least 14 million subscribers in the last nine years.) The subscriber defections were triggered by a combination of cord cutting and AT&T mismanagement. The telco proved it’s simply not very good at running an entertainment company. So, AT&T has looked for a DIRECTV escape hatch for years and TPG provided one, starting with the 2021 sale of 30 percent of the company and now the remaining 70 percent. The telco can now focus exclusively on its root (and very successful) business – wireless service.

Jeremy, hope that helps. Happy viewing and stay safe!

The TV Answer Man will answer more questions about the DIRECTV-Dish deal. If you have a question, send it to The TV Answer Man at swann@tvanswerman.com Please include your first name and hometown in your message.

The TV Answer Man is veteran journalist Phillip Swann who has covered the TV technology scene for more than three decades. He will report on the latest news and answer your questions regarding new devices and services that are changing the way you watch television. See the bio for Phillip Swann here.