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AT&T Explores DirecTV Sale (Report)

(Image credit: AT&T)

DALLAS—AT&T is reportedly exploring options, including a possible sale, for its DirecTV satellite TV unit, according to the Wall Street Journal.

AT&T and its advisers—led by Goldman Sachs—are apparently in early exploratory talks with private equity investors like Apollo Global Management and Platinum Equity, the Journal story said. While no deal is imminent, unloading the troubled satellite unit would remove some heavy burdens for the telco.

AT&T decline comment.

Investors responded tepidly to the news—AT&T stock was up about 2% to $30.62 each in after-hours trading Aug. 28. 

AT&T purchased DirecTV in 2015 for $48.5 billion and the satellite company has been on a steady decline almost from the beginning. Once the largest pay-TV service provider in the country with more than 25 million satellite and IPTV subscribers, DirecTV has been bleeding customers for years—it lost nearly 1 million satellite TV customers in Q2, finishing that period with about 17.7 million pay TV customers.

AT&T’s patience with DirecTV quickly waned, especially as the company launched a streaming service—DirecTV Now, now called AT&T Now, in 2016, which seemed to be a direct competitor to its satellite service. In the meantime, AT&T paid more than $100 billion for programmer Time Warner in 2019, launching yet another streaming service in May—HBO Max—and seems to have put most of its faith in the streaming content business. 

According to the Journal, AT&T could fetch about $20 billion for DirecTV, less than half what it paid, but enough to help pay down some of the debt associated with the Time Warner buy. 

Another possible buyer could be satellite TV rival Dish Network, which has about 9 million satellite TV subscribers. Dish chairman Charlie Ergen has said he believes a DirecTV merger could work,  especially with the current presidential administration, but there is still some doubt regulators would approve a deal.