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AT&T reportedly in talks to sell stake in its legacy TV, satellite businesses

AT&T is considering the sale of a “significant minority stake” in its DirecTV, AT&T Now (formerly DirecTV Now) and U-verse television operations, according to CNBC. The outlet, which cited anonymous sources familiar with the matter, said that the deal would value DirecTV at about $15 billion, after AT&T purchased DirecTV in a $67 billion acquisition five years ago that was positioned as a way to diversify AT&T’s revenue mix and offer its customers more video options.

Rumors of a potential sale of DirecTV have been surfacing from time to time over the past few months, but CNBC reported that several private equity companies, including Apollo Management, will be submitting final bids in early December.

In the most recent AT&T conference call with investors in late October, CEO John Stankey declined to comment on a potential sale of DirecTV. He did, however, comment that the operator’s AT&T TV streaming product “is a much more natural fit in terms of how customers want to use a pay TV service today than the satellite product is,” while the company’s video business is a “mature business that’s going to continue some degree of decline.” AT&T has ratcheted down its promotions related to DirecTV over the past couple of years, focusing on high-value customers and allowing those who were more price-sensitive to churn away.

CNBC reported that the tentative terms of the deal would allow AT&T would retain majority economic ownership of the businesses and the infrastructure — including all-important fiber — while the buyer would control pay-TV distribution operations and put the business on its books. So the deal would reportedly move those legacy assets off of AT&T’s balance sheet — just about the time that the highly anticipated C Band auction is to start.

ABOUT AUTHOR

Kelly Hill
Kelly reports on network test and measurement, as well as the use of big data and analytics. She first covered the wireless industry for RCR Wireless News in 2005, focusing on carriers and mobile virtual network operators, then took a few years’ hiatus and returned to RCR Wireless News to write about heterogeneous networks and network infrastructure. Kelly is an Ohio native with a masters degree in journalism from the University of California, Berkeley, where she focused on science writing and multimedia. She has written for the San Francisco Chronicle, The Oregonian and The Canton Repository. Follow her on Twitter: @khillrcr

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