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, during AT&T’s earnings call today, AT&T said that they are very happy with DIRECTV right now, but if something came along, they would evaluate it.
This all comes as earlier this month, Bloomberg reported 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.
AT&T didn’t comment on the possible sale of DIRECTV today but said they wouldn’t rule anything out if a better offer came than its current plan for DIRECTV. For now, though AT&T is very happy with the money DIRECTV is making for AT&T’s investment in the company.
AT&T did say it expects the cash contribution from DIRECTV to AT&T to decline but said the team running DIRECTV is doing an amazing job.
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.
When Bloomberg released its report 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.
So the question now is who, if anyone, would want to buy DIRECTV right now. More importantly how big of a deal would it need to be for AT&T to be willing to consider the sale. Also, would this be a full sale of the company or AT&T selling off part of its 70% ownership of DIRECTV?