AT&T said to start evaluating options for hefty DirecTV stake
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AT&T (NYSE:T) is reportedly looking over options on the joint venture in which it holds 70% of satellite TV provider DirecTV.
That comes as a three-year commitment with private-equity co-owner TPG to hold the stake is due up at the end of July 2024, and AT&T has the right to conduct sales talks before that time.
AT&T (T) is looking over options on the stake including a dividend recapitalization; adding a new investor; or selling out of the joint venture as soon as next August, Bloomberg reported, adding any deal talks are in early stages and the ownership may remain status quo.
The telecom giant had received some $7.8B in the 2021 transaction where it gave up operating control of the satellite provider and its U-verse and AT&T television operations, while maintaining a 70% financial stake in a spun-off DirecTV company.
Now, as DirecTV faces industry-standard declines in subscribers with streaming video ascendant, the customer losses are cutting into the cash distribution that AT&T receives from DirecTV. First-half payments to AT&T from DirecTV fell to $1.9B this year from a year-ago $2.7B, Bloomberg noted.
AT&T acquired DirecTV in 2015 for $48.5B.
And as always, any talk of change of control of DirecTV stirs up recurring talk about the prospect of merging DirecTV with its satellite TV rival Dish Network (DISH).
The two companies are the top two satellite TV providers in the U.S. -- DirecTV has some 12.8M subs, while Dish Network has 6.9M -- and they are the No. 3 and No. 4 multichannel video providers (behind Comcast (CMCSA) and Charter Communications (CHTR)).

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