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AT&T Again Exploring a Deal For DirecTV—Update—Sale Pending

44K views 653 replies 66 participants last post by  Delroy E Walleye 
#1 ·
#2 ·
My first thought was, "this is good news." My first thought when D* was purchased by ATT was, "this is good news." My next thought is, "could someone even worse buy it, could anyone be worse?" I'm not surprised by this news, I always thought the purchase was a mistake. Interesting, let's see what happens.

Rich
 
#3 ·
There’s a lot of things that come to mind if this were to happen. First up is how will a sale of D* affect those carriage contracts that are for satellite and streaming?
 
#4 ·
There's a lot of things that come to mind if this were to happen. First up is how will a sale of D* affect those carriage contracts that are for satellite and streaming?
I was thinking the same thing. The only reason the could do AT&T TV and AT&T TV Now is DTV already had the channel streaming rights. Could AT&T TV and AT&T TV Now keep those rights without DTV?
 
#6 ·
Of course they can keep carriage rights. They had UVerse before DTV.
We do seem however to be heading into a division between standard, OTA content and premium content.
 
#9 ·
I'm still on DirecTV since its the best value (at least up until this Monday which may be my last day if Retention doesn't re-up my promo). But they aren't going to launch any new sats. Internet delivery is where everything is going even for a hybrid solution like TVision vs. straight up OTT. Too bad T seems clueless on how to tap into that market. There's like 17 flavors of T streaming, no idea what's what anymore lol. Although they've all seemed to flop.
 
#14 ·
These rumors will be around forever, but I wonder if AT&T did this whether they would sell AT&T TV with it. Its too early to throw in the towel, but AT&T TV Now certainly hasn't set the world on fire and now Dish is losing a bunch of Sling TV subscribers so the streaming MVPD play just doesn't seem like it is getting much traction. It suffers from the same problem that satellite does - 2/3 of satellite revenue goes toward paying networks so there isn't much room to offer a lower priced product unless you are willing to accept less profit.

AT&T might just want to put all their eggs in the HBO Max basket and make Directv (and AT&T TV, which would need to be rebranded) independent again.
 
#16 ·
People pushing for the sale of DIRECTV need to remember how much of the AT&T Entertainment Group makes. $1.335 billion in profits in first quarter (better than the past two quarters). More revenue from video than from voice for the past four quarters. But sure, call that a failure and push to sell. "Bankers" say they should.

The push by investors last September was for an "unmerge" and divestment of recent deals that they felt were too expensive, but at this point it would be like pouring a bottle of gin and a bottle of vodka into a bucket and then asking someone to separate the mixture back in to the component parts. AT&T can sell a bucket of gin-vodka to the next willing group of investors, but it would be much harder to put the gin and vodka back in the bottles and sell them separately.

AT&T cannot sell the satellite company and keep the customers. And if they lose 13+ million subscribers by spinning of satellite they lose their leverage making contracts to serve the remaining subscribers. The concept that they could somehow keep all the subscribers and separate the businesses (some sort of joint bargaining agreement) is convoluted.

The push in September suggested a split sometime in mid 2020. That is where we are. But it is still a bad idea.
 
#26 ·
People pushing for the sale of DIRECTV need to remember how much of the AT&T Entertainment Group makes. $1.335 billion in profits in first quarter (better than the past two quarters). More revenue from video than from voice for the past four quarters. But sure, call that a failure and push to sell. "Bankers" say they should.
That's why I've always said it is unlikely to be sold - even as an asset of declining value it has a lot of value given its cash flow so who is going to pony up a minimum of $20 billion to make that happen?

It would make more sense for AT&T to spin it off as a separate company - typically you would spin off the debt associated with the original acquisition along with it.

I wouldn't be surprised if AT&T feels very different about the reason they bought it, and their plans for AT&T TV. I think if Directv goes, AT&T TV goes with it. Why do they need to have their own MVPD to serve their internet customers? The "bundle" is becoming less and less of a thing as people who don't watch sports drop traditional TV service altogether, I don't think AT&T needs it.
 
#18 ·
Something big is brewing. Focusing alot on numbers right now, upgrades were on the back burner during the pandemic, they are in full force now. Big spike in jobs, seems they are trying to push out as many as they can, workload on the contractor side seems to be picking up, and the in house side, markets that they work in D* systems are getting smaller. Changes are on the horizon.

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#22 ·
Something big is brewing. Focusing alot on numbers right now, upgrades were on the back burner during the pandemic, they are in full force now. Big spike in jobs, seems they are trying to push out as many as they can, workload on the contractor side seems to be picking up, and the in house side, markets that they work in D* systems are getting smaller. Changes are on the horizon.

Sent from my SM-G977U using Tapatalk
MPEG2 trun off soon?
With the loss of DNS they may just get out being stuck in the contracts that held it up.
 
#19 ·
They need to make up for the first two months of the quarter. 1Q was actually pretty good compared to the previous two ... the pandemic hit mid March and started to have some effect. 2Q is where we will probably see the biggest impact. Upgrades usually mean commitments and that is what DIRECTV needs right now - customers who can't leave for two more years.
 
#23 ·
Well tbh I don't see AT&T getting rid of DirecTV completely when it accounts for the majority of its pay-TV subscriber base and they have stopped selling U-Verse TV and AT&T TV is still in its infancy. Estimators are put all of AT&T's pay-TV losses from Q1 under DirecTV because AT&T doesn't break out DirecTV, U-Verse TV and AT&T TV subscribers instead all three are lumped together as "Premium TV". I find it highly unlikely no one left U-Verse TV in Q1.

Also they have all their streaming services (AT&T TV, AT&T TV Now and AT&T Watch TV) housed under the DirecTV subsidiary and they are using DirecTV trademarks like Choice for AT&T TV and AT&T TV Now. The AT&T TV devices are using the proprietary power supply used for the Genie Minis and the AT&T TV devices themselves have copyright references to DirecTV.

Any sale of DirecTV will require AT&T to essentially "break up" the DirecTV subsidiary into two subsidiaries first. One exclusively for the satellite assets and one for the streaming assets. If you read the Terms and Services for all three streaming services the DirecTV, LLC. subsidiary is the part of AT&T legally responsible for those products.
 
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#24 ·
Also they have all their streaming services (AT&T TV, AT&T TV Now and AT&T Watch TV)
This is exactly T's mistake. It really blows my mind. I am active on the forums and I couldn't tell you the difference between the 3 or why they even have 3. NashGuy knew all the differences, but that's one person. The general consumer has no clue.

Not to mention they take one look at the pricing and say "why should I pay $80+ when I can go to Netflix for $16?".

Monday / Tuesday is do or die for me with DirecTV. Either they re-up my promo or I walk. If they give me a one month credit like they did last month to "tide me over", I'll probably walk. Calling in once a year isn't a big deal. Calling in every month? Meh... and depending on how my promo lands (if I even get one), I still may walk.
 
#28 · (Edited)
Bankers speculate on things like this all the time. It means nothing. Maybe they are thinking that this will drive up the stock price? Who knows? I can't see them selling until they know how successful their streaming services will be. If AT&T TV is a failure they might not be so keen on getting rid of this. We'll see, but I'll believe it when it comes from more sources than just one, Fox Business.
 
#39 ·
If anything Directv is becoming more profitable for AT&T. They had their highest quarterly profit from their TV division ever last quarter - I'm guessing that just about all the integration costs have been paid at this point as well as the startup costs for AT&T TV.

The question is whether the level of profit it reaches meets their expectations, and at what point subscriber losses cut into profitability and at what rate. However like I said before I think the biggest factor as far as what AT&T may choose to do is whether AT&T TV is a success. So far it looks pretty meh, but they couldn't have picked worse timing for the launch if they had a time machine.

I know, I know, people will say "they need to lower their prices etc." but when content is 2/3 of Directv's price and has to be a higher percentage of AT&T TV's price since it is lower (because no $15 or $7 fees) there is not much room to price it lower and still make money.

On the other hand, they know HBO Max will be a gold mine since it is basically taking the HBO subscription many people with cable/satellite have been happily getting for years and bring it to streaming. I don't think AT&T TV serves a useful role for AT&T any longer, even if they can get millions of subscribers on board for it. The "bundle" of internet and TV matters less to consumers every year, in five years it will probably be gone altogether. Without that, they have no reason to be in the packaged TV business, not when they have one of the crown jewels of streaming in the form of HBO Max.
 
#40 ·
This Fiercevideo article says Apollo Managment day both DirecTV and Dish Network would be sold to Apollo Managment and and new SatelliteTV company would be formed.

AT&T under pressure again to sell DirecTV: report

"Apollo Management reportedly suggested creating a new company and having AT&T offload DirectTV to the new company. Then, Dish Network would sell its satellite business to the new company."
 
#47 ·
This entire thing from bankers feels like the one "activist investor" trying to push his personal agenda of getting rid of DIRECTV into the news again.

It's just dumb at the moment.
Bingo. This is some outsider or edge person's idea. It is a shame that the question was ever addressed by anyone official at AT&T or DISH (addressed last September).

One might as well quote a poster on this site or Twitter who wants AT&T|DIRECTV to charge $50 per month for Premier with no receiver or other fees. They could make a million posts saying "AT&T should" but they are not in the position to do anything other that tilt at a windmill. In essence, Apollo Management is a troll. We probably should not be feeding the troll.
 
#48 · (Edited)
I saw these two new posts at thelayoff.com. Do we have to worry now if an outage or glitch happens it will take longer to fix?

@2tlf: correct, they are not renewing the leases on those data centers and therefore will not even allow a VM rebuild to occur there if one goes down.
20 hours ago by Anonymous

@2zxj+153JzXcu
For what is worth, there is NO investment in DTV data centers. They are barely maintaining the server and storage, and infrastructure equipment there.
 
#50 ·
I would not rely on an anonymous site filled with disgruntled workers to be factual.
 
#54 ·
I know of a local Medical company that just negotiated 200+ locations to change over from dish to DTV, with the upturn in work, less "in house" markets covering DTV work orders, and a demand for more contractors, I dont see DTV crumbling by any means. Maybe not associated with ATT, but DTV will outlast at least 3 more Morgan Freeman lifetimes.

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#61 ·
Maybe not associated with ATT, but DTV will outlast at least 3 more Morgan Freeman lifetimes.
Wut?!? lol... Satellites have a very finite lifetime. They only have 11 left and really they don't even have that many. There's a few more that are unused / dormant / close to end of life, so you're really down to 8 or 9 if that. Unless DirecTV does a complete about face and starts launching new satellites, they won't have any left by the 2030s.
 
#59 ·
It would be best to limit links to reputable sites ... and not make so many posts copied from other sites that you appear to be promoting such sites. This is a discussion forum, not a place to be constantly posting links driving traffic elsewhere. Reputable sources supporting a point are acceptable. But a constant barrage of links is not discussion.
 
#66 ·
Maybe not associated with ATT, but DTV will outlast at least 3 more Morgan Freeman lifetimes.
Morgan Freeman the 82 year old actor or Morgan Stanley Investments the 85 year old company?
I glossed over that statement, reading it as "three more lifetimes than predicted by Morgan Stanley".

I don't expect DIRECTV to be around in 240 years. But if some investment firm is predicting DIRECTV's death in five years I would disagree and say that they will be around in 15. AT&T|DIRECTV will need to stop losing customers at the current rate and gain more non-satellite customers to bolster the business. Spinning of and becoming a company solely focused on the survival of the satellite and streaming assets may be a good thing. Spinning off only the satellite business is a non-starter.

(I don't know if Morgan Stanley made a "five year" prediction. I don't know what Morgan Freeman has to do with any of this.)
 
#67 ·
Wut?!? lol... Satellites have a very finite lifetime. They only have 11 left and really they don't even have that many. There's a few more that are unused / dormant / close to end of life, so you're really down to 8 or 9 if that. Unless DirecTV does a complete about face and starts launching new satellites, they won't have any left by the 2030s.
Pretty sure they need only five satelites any more to cover all the channels they offer now and actually more... and after mpeg2 is shut off I think they could make it with just the last three or four for a very very long time.

And they could easily still launch another sat but they wouldn't even need to consider that for another five years... at least....
 
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