AT&T announced earlier this year that it will turn its video properties DirecTV, AT&T TV, and U-verse into a new company that it will jointly manage with private equity firm TPG Capital.
As it was clarified earlier this year when the company initially announced plans to offload the troubled DirecTV business, AT&T will retain a 70% stake in the company, while TPG will take a 30% stake, and the telecom giant said the deal, under which it received $7.1 billion in cash, It will help pay off its huge debt, with the company expecting it could put an end to the bleeding by the end of 2023.
The site added, that part of this debt is owed due to AT&T’s acquisition of the original DirecTV in 2015, at which time AT&T paid $ 48.5 billion ($ 67 billion representing debt) to acquire the business, and to say that this business decision failed to deliver. It is moderate, as DirecTV bled customers for years prior to the TPG deal.
At the time the TPG deal was announced in February, AT&T President John Stankey said the company plans to focus specifically on “connectivity and content,” including 5G wireless and fiber as well as its HBO Max service. AT&T’s revised strategy is to focus on its core business and, as Stanke recently put it, “unleash its media assets.”
The deal with TPG does not include any of WarnerMedias various assets, including streaming service HBO Max, because it is offloaded to Discovery instead. (WarnerMedia and Discovery are currently awaiting approval for their companies’ merger.)
But the deal will include existing DirecTV content deals for things like the NFL Sunday Ticket, and AT&T added that DirecTV “will continue to offer subscribers HBO Max along with any bundled wireless or broadband services and associated customer discounts.”
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