Thread regarding DIRECTV layoffs

AT&T Exploring Options for DirecTV as Pay-TV Subscriptions Continue Decline

(Bloomberg) -- AT&T Inc. has begun to explore options for its 70% stake in DirecTV as it approaches the end of an agreement under which it can legally sell its interest in America’s third-largest pay-TV provider.

Among AT&T’s options are: a dividend recapitalization, adding a new investor, or selling the stake and exiting the venture as early as August 2024, according to people familiar with the discussions, who asked not to be identified because the discussions aren’t public. A deal isn’t imminent and discussions are still in the early stages, they said. The current ownership structure may still continue as is.

AT&T co-owns DirecTV with private equity firm TPG Inc. as part of a joint venture formed in 2021. The business was valued at about $16 billion at the time. The partnership came with a three-year commitment that gave AT&T the option to sell its stake after July 31, 2024, and a clause that allows AT&T to hold sale discussions before the end of that commitment period.

DirecTV said it wasn’t aware of “any such exploration.” Representatives for AT&T and TPG declined to comment. AT&T shares rose by as much as 1.2% in after-hours trading on Wednesday before erasing gains.

Like nearly every other pay-TV provider in the US, DirecTV has struggled in recent years to compete with streaming networks, and has been losing subscribers. It lost about 400,000 customers in the second quarter, bringing its total subscriber count to 12.4 million, according to Leichtman Research Group. DirecTV had more than 15 million customers when the venture between AT&T and TPG was formed in 2021.

The declining customer base has cut into the cash distribution AT&T gets from DirecTV. In the first half of this year DirecTV payments to AT&T fell to $1.9 billion from $2.7 billion a year earlier.

DirecTV was one of several large divestitures by AT&T at the time when it was trying to reverse its $100 billion strategic swerve into the media business and return to its wireless and broadband roots. As part of the original combination with TPG, AT&T received $7.6 billion for its DirecTV satellite and streaming service, along with its U-verse TV operations.

AT&T had previously explored a merger between DirecTV and Dish Network Corp.’s satellite-TV service.

  • With assistance from Ryan Gould and Liana Baker.
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| 1261 views | | 4 replies (last January 14, 2024)
Post ID: @OP+1oWKpQNz

4 replies (most recent on top)

I left DTV (formerly AT&T) last year having worked on DTV Stream where it was essentially going into maintenance mode. Upper management has failed the product with their main solution being to integrate other streaming applications into it. Yeah, that's their actual solution to saving their brand.

The only thing keeping Stream afloat currently is their contracts with regional sports networks. Once those are gone, it's over. So who is going to buy a product in maintenance mode with a bunch of incompetent C-level managers? Recall the blackouts recently? It's due to DTV not having the capital to pay their contracted obligations. DTV said it's so they don't have to raise the prices (even more) of their product, but they know if they did, they'd hemorrhage even more subs. They no longer have the subscriber numbers to retain many of their contracts and it spells the end of the end.

AT&T should just cut it's losses at this point and release the anchor that is DTV. They'll take a hit, but in the long run it's like paying off a mortgage.

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Post ID: @1Duzv+1oWKpQNz

DTV is finished.

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Post ID: @drtw+1oWKpQNz

AT&T as well as DirecTV's current management has thoroughly run this company to the ground.

The culture, people, and everything DirecTV used to be is dead and sad to watch slowly deteriorate.

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Post ID: @4mga+1oWKpQNz

Pay-Tv is slowly spinning around the toilet bowl. No surprise AT&T is cutting it loose.

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Post ID: @1hom+1oWKpQNz

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