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Back in 2015, AT&T acquired DIRECTV. In what looked like an attempt to go all-in with pay TV, including buying Time Warner in 2016. But it looks like AT&T has had a change of heart. Selling off Time Warner entirely, and now looking to do the same with DIRECTV.
Currently, DIRECTV controls all of AT&T’s remaining TV services, this includes U-verse TV as well as DIRECTV Stream. AT&T already sold off a portion of it to TPG Capital in 2021, while AT&T still owns a controlling 70% of DIRECTV.
But 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.
Cable TV is a losing business now
Cable TV used to be a cash cow. Everyone had cable and was paying over $100 per month for a cable package with hundreds of channels that most did not watch. Now, most have cut the cord, and many more are doing so each day. In fact, in the first quarter of 2023, cable TV companies lost 1,135,143 subscribers. And in the second quarter that went up to 1,513,532. It’s a shrinking business, because everyone is relying on streaming services, or streaming Live TV services like DIRECTV Stream or YouTube TV.
AT&T knows this and could be why they are looking to ditch pay TV, and stick to wireless. And now that there are talks about it selling off the rest of DIRECTV, we could see the DISH and DIRECTV merger rumors coming back to life. These rumors have been around for many years. But DISH may not be that interested, given that it is now focusing on its 5G network – partly due to the deadlines set by the FCC.
Imagine going to court to spend $85.4 billion on acquiring a company that you then spun off just a few years later. And spending $49 billion for DIRECTV. AT&T did get a tiny bit of that DIRECTV acquisition cost back with the spin off to TPG Capital, but they only paid $1.8 billion for a third of the company. It’s clear that pay TV is declining, and AT&T is likely looking to get some of their money back before it’s all gone.