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Report: AT&T Might Not Be Actively Trying to Spin-Off DirecTV, But May Be Looking For a New CEO

Jason Gurwin

Last week, Elliot Management, a $3.2 billion shareholder of AT&T stock, released a letter addressed to AT&T’s board calling out the company’s performance — especially around their DirecTV business. Elliot Management wants AT&T to get rid of DirecTV.

Yesterday, a report by the WSJ said that AT&T was considering spinning the company off into a separate public company or attempting to merge with satellite competitor Dish Network. However, a new report by CNBC says that doesn’t seem to be the case.

This morning, CNBC’s David Faber said in response to the WSJ report, “after speaking any number of people familiar with the situation close to AT&T’s thinking — they are not focused on any split of DIRECTV from the overall business.”

Now, according to CNBC, Elliot Management has asked the company to begin a wide search to replace current CEO Randall Stephenson, who is expected to retire next year. While Stephenson has wanted to name John Stankey, WarnerMedia’s CEO and recently named COO of AT&T, his replacement — Elliot Management doesn’t want Stankey, who led the DirecTV acquisition in charge.

It’s been a rough path since AT&T acquired DirecTV for $49 billion in 2015 — as the pay-TV service has seen massive losses. The service peaked in 2016 with 21 million subscribers, but with continuing losses which saw 778,000 premium TV subscribers churn last quarter — the service is left with just 17.9 million subscribers. And it’s not expected to get better, as they’ve already hinted that they will lose over 1 million subscribers in the third quarter.

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