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OFFICIAL: AT&T Sells 30% Stake in DirecTV to Private Equity Firm, Values Company at $16.25 Billion

Jason Gurwin

AT&T has reached a deal to sell 30% minority stake in its DirecTV, AT&T TV, and U-Verse business to private-equity firm TPG. The deal won’t include streaming assets like HBO Max, AT&T SportsNet (their regional sports networks), or AT&T U-Verse internet business.

The deal will value the AT&T businesses around at $16.25 billion, meaning that AT&T will net $7.8 billion in cash. AT&T acquired DirecTV in 2015 for $48.5 billion ($67 billion with debt). New DirecTV will see AT&T’s U.S. video unit CEO, Bill Morrow, join as the company’s CEO.

“This agreement aligns with our investment and operational focus on connectivity and content, and the strategic businesses that are key to growing our customer relationships across 5G wireless, fiber and HBO Max. And it supports our deliberate capital allocation commitment to invest in growth areas, sustain the dividend at current levels, focus on debt reduction and restructure or monetize non-core assets,” said AT&T CEO John Stankey. “

AT&T has been pivoting away from traditional pay-TV to focus more on HBO Max in recent years. DirecTV, U-Verse and AT&T TV are based around a linear TV business of broadcast and cable networks that has seen a loss of nearly 3 million video customers last year.

“Video remains a core service for tens of millions of households. Since its launch in 1994, DirecTV has continually evolved its product, content and service to provide customers an industry-leading video offering. As video consumption habits evolve, the new DIRECTV will continue investing in its offering to provide value to its customers, including through next-generation streaming pay-TV services,” said David Trujillo, Partner at TPG.

A deal for DirecTV has been long rumored, as AT&T has looked for ways to pay down debt for the company to focus on HBO Max and 5G. At one point they had been linked to Dish Network for a merger, but a standalone sale seemed like a more likely route.

The company has previously sold their stake in Hulu in 2019 and Crunchyroll in December 2020.

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