Last October, a report revealed that AT&T was actively looking at selling all or part of its remaining 70% ownership in DIRECTV.
The deal would mark a complete break between DIRECTV and AT&T. The satellite TV provider struggled for years under AT&T management only to be spun back out in August 2021 in a deal that brought in TPG as a minority owner. Since that deal, there has been constant chatter and questions about DIRECTV’s fate.
As cord cutting is expected to accelerate in 2024, many understand why AT&T would move now to sell DIRECTV.
So, what is happening with DIRECTV and what does that mean for cord cutting? Today, we are going to break down everything we know about the sale and what that means for cord cutting.
What We Know about AT&T’s Reported Plans to Sell DIRECTV
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 Capital.
In October, Bloomberg reported that AT&T was looking at options to sell all or part of its remaining shares of DIRECTV to other investors. This move could see AT&T fully leave the pay-TV service arena that it entered in 2015 when it bought the satellite provider. Or AT&T could still retain partial ownership of DIRECTV.
Currently, DIRECTV controls all of AT&T’s remaining TV services, including U-verse TV and DIRECTV STREAM. With the growth in cord cutting, 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 declined to comment on the story.
2023 has not been kind to cable TV companies like Comcast, DIRECTV, and Spectrum. In the first half of 2023, cable TV companies lost more than 2.7 million TV subscribers. (In the first quarter of 2023, cable TV companies lost 1.1 million subscribers; in the second, they lost 1.6 million.) In the first quarter of 2023, streaming live TV services lost 394,000 subscribers, and in the second quarter, they lost 115,000, according to The Leitchman Research Group, which includes estimates on DIRECTV and YouTube TV. DIRECTV has, according to The Leitchman Group, lost more than 750,000 subscribers in the first half of 2023.
What This Means for Cord Cutting
For years, many cable executives thought that they could replace cable TV losses by offering a streaming version through services like DIRECTV STREAM. So far, that has not worked, with many of those services now losing subscribers. In the first half of 2023, services like Hulu + Live TV and Fubo lost 509,000 subscribers combined.
Increasingly, cord cutters who are not sports fans have subscribed to on-demand services like Disney+ and Paramount+. This has greatly impacted many cable companies’ plans to fight cord cutting by just offering cheaper streaming.
In the short term, AT&T’s move to sell all or part of its share in DIRECTV will have little impact on cord cutting. If you are a current subscriber, you likely won’t see any big change to how DIRECTV and DIRECTV STREAM work.
In the long term, AT&T’s move to sell DIRECTV could set off a domino of moves in cord cutting as a growing number of streaming services struggle to become profitable. Will other streaming services sell? Are we getting closer to the long-rumored merger of different streaming services? For now, we will have to wait and see.
The good news is cord cutters should not be worried about any massive changes in the immediate future. Even if AT&T agrees to sell the company, we could be months away from that sale being completed.