AT&T announced today that it has reached an agreement to sell its remaining 70% stake in DirecTV to TPG, finalizing its exit from the pay-TV business. The deal, expected to close in the second half of 2025, will bring in a total of $7.6 billion in payments to AT&T through 2029. This includes $1.7 billion in distributions this year, $5.4 billion in after-tax payments in 2025, and $500 million in 2029.
This move marks the culmination of a strategic shift that began in 2021 when AT&T sold a 30% stake in DirecTV to TPG, forming a joint venture. Since then, AT&T has received $19 billion in payments from the venture.
The sale aligns with AT&T’s focus on strengthening its core cellphone and broadband businesses while reducing debt. The company originally acquired DirecTV in 2015 for $49 billion at a time when the pay-TV market was near its peak. However, the landscape has changed dramatically with the rise of streaming services, leading to a significant decline in DirecTV subscribers.
This development clears the path for a potential merger between DirecTV and its long-time rival, Dish Network. Reports surfaced last week that EchoStar, Dish’s owner, and TPG were nearing an agreement on a deal. Such a merger could provide the combined entity with greater leverage to compete against streaming giants in the evolving media landscape.
A previous attempt to merge DirecTV and Dish in 2002 was blocked by the government due to antitrust concerns. However, the current market dynamics, with cord-cutting and the dominance of streaming platforms, might present a different argument for regulators this time around.