AT&T close to sale of ‘substantial’ stake in DirecTV: report

It feels like AT&T has been on the cusp of a DirecTV sale for years and now comes another report that a sale for a “substantial” stake in the satellite TV provider is imminent.

According to CNBC’s Alex Sherman, AT&T could announce a deal with TPG for a large minority stake in DirecTV, U-verse and AT&T TV Now as soon as this week. As previously reported, the deal will value AT&T’s struggling video businesses at approximately $15 billion, well short of what AT&T shelled out for DirecTV.

In 2015, AT&T paid $48.5 billion for DirecTV and took on the company’s approximately $18 billion in net debt.

TPG was reported in January to be the front runner in AT&T’s auction of its video businesses.

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AT&T is focused on AT&T TV, an IP-based television service, as the future of its linear video strategy. Accordingly, the company is reportedly looking to get DirecTV off its books and give up operational control of the company while still maintaining majority ownership.

While reportedly orchestrating a deal for all its video services not named AT&T TV, the company also taking steps to streamline its linear TV business and minimize confusion by merging AT&T TV Now with AT&T TV.

AT&T lost another 617,000 net premium TV subscribers in the fourth quarter but said that AT&T TV is helping to offset losses from its DirecTV business. The total net losses in premium TV were significantly lower than the 946,000 reported in the year-ago quarter. AT&T ended 2020 with approximately 16.5 million premium TV subscribers, down 15.3% year over year.

AT&T absorbed a $15.5 billion charge on its pay TV business during the fourth quarter, something the company’s management team said it did to deal with a “mature product in the latter stages of its lifecycle.”