AT&T is close to striking a deal to sell a "large minority" stake in its pay-TV business – including DirecTV, U-verse TV and AT&T TV – to private equity firm TPG, CNBC reports.
CNBC says a deal, which would value AT&T's video business at roughly $15 billion, could be announced as early as this week.
TPG has already been rumored to be in exclusive talks to acquire a minority stake in DirecTV, AT&T's struggling satellite TV business.
This apparent revision would also see TPG acquire a piece of AT&T's legacy IPTV business (AT&T halted sales of U-verse TV last April), as well as AT&T TV, a newer OTT-TV offering that recently folded in AT&T TV Now, a skinny-TV pay-TV streaming service that used to be known as DirecTV Now. AT&T announced just today that AT&T TV is in line for upgrades that will vastly expand the number of simultaneous streams allowed in subscriber homes as well as support unlimited storage for its premium tier cloud DVR product.
Selling a big stake in its pay-TV business would further signal that AT&T's video plans will focus more squarely on HBO Max, a new supersized SVoD service that counts more than 17.2 million "activations" so far. By comparison, AT&T shed 617,000 "premium" TV subscribers (DirecTV satellite and U-verse IPTV) and lost 27,000 OTT video subs in Q4 2020.
AT&T has likewise been under pressure from activist shareholder Elliott Management to divest the DirecTV assets as part of a broader effort to shed unneeded businesses and to further cut costs.
Meanwhile, the purchase of a stake in AT&T's video business would deal TPG back into the pay-TV game after it teamed with Patriot Media Management on the $8.1 billion sale of Astound Broadband – a company that includes RCN, Grande Communications, Wave Broadband and enTouch Systems – to Stonepeak Infrastructure Partners.
Other bidders in an AT&T auction that has previously been more focused on DirecTV, the satellite TV service AT&T acquired in 2015 for almost $50 billion, have reportedly included Apollo Global Management and Churchill Capital Corporation IV.
- AT&T nears sale of DirecTV stake to TPG – report
- AT&T halts sale of U-verse TV
- AT&T TV unleashes upgrades for cloud DVR, in-home streaming
— Jeff Baumgartner, Senior Editor, Light Reading