How much is it to cancel AT&T DIRECTV?
DirecTV was acquired by AT&T in 2015 for about $49 billion, and this was a clear indication that satellite TV has a promising future. But in recent years, the shifts have emerged and the pay-TV has moved more towards streaming than towards satellites. Some in the media and other circles have speculated that AT&T may be seeking to offload DirecTV through a sale or spin-off. But wait, what is it that is happening here then? Is AT&T Internet trying to get rid of DirecTV?
Various indicators suggest AT&T might want to separate itself from the failing satellite TV company. It starts with AT&T undervaluing DirecTV by more than $20 billion since they acquired the firm, suggesting they overpaid for a declining company. AT&T has progressively experienced a declining base for DirecTV and U-verse consumers as consumers unsubscribed from expensive pay-TV services and moved to less expensive SVOD providers such as Netflix, Disney+, and Sling TV.
AT&T recorded a loss of more than 4 million TV subscribers in the year 2019, and this was attributed to be higher than that of other pay-TV providers. And that trend appears likely to extend as additional services are introduced to compete in the streaming market. Moreover, what is even more threatening for AT&T is that the losses of subscribers at DIRECTV appear to be on the rise.
Also, AT&T’s large acquisition of DirecTV has not been easy to incorporate, especially in the large business. Wireline Mega-Deals have not been as popular as anticipated since consumers want unlimited wireless and lower costs of streaming TV. Another problem that has been experienced by the company is the fact that DirecTV has been operated as a standalone business venture of AT&T.
Therefore, to reflect on the stated trends, in 2019, AT&T disclosed that they were contemplating the future of “strategic developments” of DirecTV including sales or mergers. Then in August 2020, there was news that stated that AT&T was officially negotiating on selling part of DirecTV to private equity firms.
Finally, the sale or spin-off of DirecTV is important to allow AT&T to better concentrate on its main strategic directions, such as 5G and fiber broadband. And it would free up cash to pour more money into HBO Max, a nascent streaming service that AT&T is counting on to be a big growth driver.
Thus far, there are no official personnel shifts, but altogether, one can see that AT&T seems eager to distance itself from the losing proposition which is satellite TV. Consumers should not anticipate any radical shifts to their DirecTV experience in the next few days. However, if sold, it can continue to exist with most of its attributes intact under a different owner.
However, the latter’s final destination most probably won’t be DirecTV in the long run business strategy. The company had made a very large acquisition that failed to work out probably wishing they never had done it in the first place. Plus, the whole model of pay TV is being upended quite rapidly, so severing ties with an outmoded satellite operation is the best thing for AT&T.
That’s a lot of change for both customers, although these two companies have a bright future as streaming continues to dominate home entertainment. But for now, let us wait for future developments of this venture. Most people will agree with me when I say it is just a matter of time before ATT lets go of DirecTV.
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