AT&T unloads DirecTV stake to TPG and spins off pay-TV units


AT&T has sold a 30 per cent stake in DirecTV to private equity group TPG, in a deal valuing the ailing television business at $16.25bn — a third of what AT&T paid for it six years ago. 

As part of the transaction, AT&T is spinning off DirecTV and its other pay-TV units into a separate company, of which the telecoms group will control 70 per cent. 

Randall Stephenson, former chief executive, acquired DirecTV for nearly $50bn in 2015, in what turned out to be one of the worst moves in a number of acquisitions by the since-retired executive. 

Soon after the transaction closed, subscriber growth stalled as customers abandoned cable and satellite in favour of online streaming. The service has bled more than 7m customers since 2017.

In a statement on Thursday, AT&T admitted: “It is fair to say that some aspects of the [DirecTV] transaction have not played out as we had planned.” 

Elliott Management, the activist hedge fund that bought a $3.2bn stake in AT&T in 2019, has slammed the purchase of DirecTV, arguing AT&T bought “at the absolute peak of the linear TV market”. 

John Stankey, AT&T chief executive, said splitting off DirecTV would allow for “optimum value creation”.

The deal will help AT&T trim its debt, a key priority for the group after a series of pricey acquisitions, including the $85bn purchase of Time Warner

That transaction transformed the Texas-headquartered telecoms group into a considerable media company, as the owner of HBO, the Warner Bros movie studio and CNN. 

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It also loaded AT&T with $180bn of net debt when the agreement closed in 2018, which the company has been trimming down over the past few years through disposals and other measures. AT&T’s net debt stood at $147.5bn at the end of December. 



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