AT&T is in talks to sell a minority stake in DirecTV and AT&T TV NOW. According to CNBC, the media conglomerate has met up with several potential buyers, including Apollo Management, to sell a significant minority stake in its DirecTV, AT&T Now and U-Verse pay-TV businesses. If the deal follows though, some legacy assets would come off the company’s balance sheet, alleviating some of their heavy debt load.
“Under the terms of the proposed deal, AT&T would retain majority economic ownership of the businesses, and would maintain ownership of U-verse infrastructure, including plants and fiber. The buyer would control the pay-TV distribution operations and consolidate the business on its books,” CNBC reports. “The deal could include 30 percent to 49 percent of the combined pay-TV distribution businesses,” sources corroborated.
While no definitive numbers have been released, it’s estimated that DirecTV will be valued at less than $15 billion including debt, a huge knock for AT&T which bought the branch back in 2015 for $67 billion, debt included.
Overall, AT&T is now down to 17.8 million video connections, down 637K in total — 590K of those coming from DirecTV and AT&T U-Verse. It’s a slight improvement from the nearly a million connections (972K) they lost in Q2.
Their streaming service, AT&T TV NOW, has been hemorrhaging subscribers quarter after quarter for the last year or so. In October, they lost another 37,000 subscribers as stated in their Q3 earnings report. The news brought the company to 683,000 subscribers in total. Last quarter, AT&T TV NOW lost an 68,000 subscribers leaving them with just 720,000 (after a peak 1.85 million subscribers in September 2018).