The first quarter of 2020 was an absolutely miserable one for traditional TV providers and satellite subscription services as cord-cutting rates exploded thanks to the COVID-19 pandemic, ensuing economic factors, and the lack of live sports programming. AT&T alone lost roughly 138,000 subscribers to their AT&T TV Now streaming service as well as 897,000 TV subscribers at DirecTV and U-Verse.
At the time of that news, it was noted that corporate streaming services, such as Disney+, would be the ones to benefit most from the surge in shifting market trends. Since then, we’ve seen AT&T put more of a focus on WarnerMedia’s HBO Max service by announcing it will be the exclusive home to all 23 seasons of “South Park,” “Titanic,” and eventually the long-awaited “Snyder Cut” of “Justice League.”
So it’s not too surprising to learn that, according to FOX Business’ Charlie Gasparino, various bankers are telling him that “AT&T is coming under tremendous shareholder pressure to cut costs” and sell off debt as soon as possible. And front and center at that sell-off strategy could be DirecTV, which it acquired in 2015 for $49 billion.
Gasparino noted that it was highly unlikely they would be able to get anything close to that amount in a sale and that they would likely have to be happy with a spin-off and merger agreement much like the one Dish and EchoStar agreed to last year. Around that same time, private equity firm Apollo Global Management was said to be working on a deal with AT&T that would have combined Dish and DirecTV, though AT&T balked at the plan. According to the report, AT&T would have a very different outlook on that kind of deal this time around, given that it would likely include the buyer taking on the debt load and keeping the combined satellite business private. Rumors of a DirecTV-Dish merger had been floating around for years, considering the way the winds have been blowing for some time now.
Given the way DirecTV is hemorrhaging subscribers and that trend is almost certainly going to continue in the coming years, it’s unlikely what the future looks like for the satellite operator. Given the years of carriage disputes and local network battles (SportsNetLA comes to mind), there are plenty of TV viewers who will probably be more than happy to see DirecTV go, especially as they no longer see a need for their service any longer.