AT&T announced earlier this year that it would transform its DirecTV, AT&T TV and U-verse video properties into a new company that it would co-manage with private equity firm TPG Capital. This transaction is finally complete and the services will now operate as a single company under the name DirecTV.
As reported earlier this year, when the company initially announced its intention to get rid of its struggling DirecTV business, AT&T will retain a 70% stake in the company, while TPG will take a 30% stake. The telecommunications giant said the deal for which it received $ 7.1 billion in cash would help pay off its massive debt, with the company predicting it can end the bleeding by the end of it. from 2023.
A portion of this debt is owed due to AT&T’s acquisition of the original DirecTV in 2015, when AT&T paid $ 48.5 billion ($ 67 billion in debt) to acquire the company. To say that this business decision was unsuccessful is an understatement, as DirecTV bled customers for years before the TPG deal.
When the TPG deal was announced in February, AT&T boss John Stankey said the company planned to focus specifically on “connectivity and content,” including 5G wireless and fiber as well as its HBO Max service. More recently, however, AT & T’s revised strategy is to focus on its core business and, as Stankey recently put it, to “free up media resources”.
The deal with TPG does not include any of WarnerMedia’s various assets, including its renowned streaming service HBO Max, as those are instead transferred to Discovery. (WarnerMedia and Discovery are currently awaiting approval for the merger of their two companies.)
But the deal will include existing DirecTV content offerings for things like NFL Sunday Ticket. AT&T added that DirecTV “will continue to offer HBO Max to subscribers as well as all bundled wireless or broadband services and associated customer discounts.”