AT&T is selling its majority stake in DirecTV to private equity firm TPG Partners for 7.6 billion dollars (£5.7 billion), ending the communication giant’s remaining ties to the entertainment industry.
AT&T said on Monday in a filing with the Securities and Exchange Commission that it will receive payments from TPG and DirecTV for its remaining 70% stake in the satellite TV company.
This includes 1.7 billion dollars (£1.27 billion) in the second half of the year and 5.4 billion dollars (£4.03 billion) next year. The remaining amount will be paid in 2029.
AT&T said the deal will allow it to focus on being a wireless 5G and fibre connectivity company and strengthen its balance sheet.
The transaction is expected to close in the second half of 2025.
AT&T purchased DirectTV for 48.5 billion dollars (£36.17) in 2015. But in 2021, following the loss of millions of customers, AT&T sold a 30% stake of the business to TPG in a deal valued at 16.25 billion dollars (£12.12 billion).
Like many traditional TV providers, DirecTV has been dragged down by dwindling demand in the ever-evolving media landscape.
At the start of September, DirecTV’s 11 million subscribers abruptly lost access to ESPN, the ABC-owned stations and other Disney-owned channels such as FX and National Geographic in a dispute over carriage fees and programming flexibility.
After a nearly two-week blackout, DirecTV said it had reached a deal with Walt Disney Co to restore the stations.
Shares of AT&T Inc rose slightly before the market opened on Monday.
Shortly after this announcement, DirecTV revealed it will buy Dish and Sling, a deal it has sought to complete for years, as it seeks to better compete against streaming services.
DirecTV said it will acquire Dish TV and Sling TV from its owner EchoStar in a debt exchange transaction that includes a payment of one dollar, plus an assumption of debt.
The prospect of a DirecTV-Dish combo has long been rumoured, with headlines about reported talks popping up over the years. And the two almost merged more than two decades ago — but the Federal Communications Commission blocked their owners’ then-18.5 billion dollar deal, citing competition concerns.
The pay-for-TV market has shifted significantly since. As more and more consumers tune into online streaming giants, demand for more traditional satellite continues to shrink.
Although high-profile acquisitions have proven to be particularly tough under the Biden-Harris administration, that may make regulators more inclined to approve DirecTV and Dish’s pairing this time around.
The current deal could provide a key lifeline for EchoStar. The Colorado-based telecommunications company has reportedly faced the prospect of bankruptcy as it continues to burn through cash and see losses pile up.
In a recent securities filing, EchoStar disclosed that it had just 521 million dollars (£389 million) in “cash on hand”. And the company forecast negative cash flows for the remainder of the year — while also pointing to major looming debt payments, with more than 1.98 billion dollars (£1.48 billion) of debt set to mature in November.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here