Back in 2021, AT&T completed its plan to spin off DIRECTV into an independent company, with 70% of it being owned by AT&T and 30% by TPG Captial. Now Bloomberg is reporting that AT&T is looking at options to sell all of its remaining shares of DIRECTV or to sell part of the company to other investors. This move could see AT&T fully leave the Pay TV service that it entered back in 2015 when it bought DIRECTV.
Currently, DIRECTV controls all of AT&T’s remaining TV services, including U-verse TV and DIRECTV STREAM. With the recent growth in cord cutting though, it seems that AT&T is looking at options to unload its shares in DIRECTV or at least reduce its ownership.
DIRECTV told Cord Cutters News that it wasn’t aware of any possible sale, reiterating what it told Bloomberg. AT&T has not responded to Cord Cutters News’ request for comment at this time.
2023 has not been kind to cable TV companies like Comcast, DIRECTV, and Spectrum. In just the first half of 2023, cable TV companies have lost over 2,748,000 TV subscribers. Not only that but the hope that most cord cutters would switch to live TV streaming services doesn’t seem to be paying out as live TV services like Hulu + Live TV and Fubo also lost 509,000 subscribers during the same time period.
In the 1st quarter of 2023, cable TV companies lost 1,135,143 subscribers. In the 2nd quarter of 2023, cable TV companies lost 1,613,532. In the 1st quarter of 2023, streaming live TV services lost 394,000, and in the 2nd quarter, they lost 115,000 all according to The Leitchman Research Group, which includes estimates on DIRECTV and YouTube TV. DIRECTV has, according to The Leitchman Group, lost over 750,000 in the first half of 2023.
This news of a possible sale will likely bring new rumors about a possible DIRECTV and DISH merger. For years, DISH and DIRECTV have had talks for a possible merger. That may be back on the tablet, but DISH is currently in the process of merging with EchoStar. That raises the question about how interested DISH would be in DIRECTV right now as it focuses on its 5G network.
AT&T’s CFO Pascal Desroches weighed in on the potential DIRECTV merger with Dish Network back in June at the Bank of America C-Suite Technology, Media, and Telecommunications Conference. “We separated from our satellite platform, and we have it in a construct where it’s been optimized by our partners at TPG. They really do a good job at optimizing that asset.”
He went on to say, “Before they would decide to do something with another party, whether it be Dish or somebody else, I think there is a daily well-defined bar that we have.”
Desroches isn’t saying AT&T would not consider taking an offer, but it would have to be an impressive deal for them to give up DIRECTV as an asset. “We are in a really good position with the asset. Would we look at other opportunities? We always do, that’s our job. But the bar would be pretty high in order to do something to try to accelerate more value creation.”
So the question now is who, if anyone, would want to buy DIRECTV right now. Also, would this be a full sale of the company or AT&T selling off part of its 70% ownership of DIRECTV?
DIRECTV was not available for comment at the time of this publication.