AT&T sells minority stake in struggling DirecTV business

It appears AT&T has found a buyer for its beleaguered DirecTV business.

AT&T ad today that it will form a new company with private equity firm TPG called New DirecTV which will oversee the video activity of AT&T DirecTV, U-verse and AT&T TV, the latter recently absorbed the company’s AT&T TV Now service. The deal, which was reported which could be announced this week, would value the new company at $ 16.25 billion. AT&T will own 70% of the company, while TPG will hold 30% from New DirecTV.

The $ 7.8 billion deal is expected to close in the second half of 2021, and AT&T has said it will use the money to help pay off its mountain of debt. It’s unclear whether the deal will have a significant impact on services as they exist and operate now, but AT&T said the newly formed company “will continue to provide competitive video service with best-in-class content.”

“This agreement aligns with our investment and operational focus on connectivity and content, as well as the strategic activities that are essential to grow our customer relationships in 5G wireless, fiber and HBO Max.” , said AT&T chief John Stankey in a declaration. “And this supports our deliberate capital allocation commitment to invest in growth areas, maintain the dividend at current levels, focus on debt reduction, and restructure or monetize non-core assets.”

He added, “As the pay television industry continues to evolve, the creation of a new entity with TPG to separately operate the video business in the United States provides the flexibility and dedicated management direction needed. to continue to meet the needs of high quality customers and to run the business for profitability. “

Restructure or monetize non-core assets, you say? I wonder how many more WarnerMedia streaming service fire sales at the Crunchyroll, we’ll read in the future.