September 24, 2019
AT&T COO John Stankey told the Wall Street Journal the company has no plans to sell DirecTV, essentially denying a report that the paper put out last week holding that a sale of the unit was among the possible options being weighed.
Stankey said DirecTV is too valuable to AT&T, as it will play an important role in the company's streaming strategy and as a key cog for an advanced advertising business that is increasingly dependent on viewership data and targeting. The streaming piece will include AT&T's forthcoming HBO Max SVoD service, which will be sold as a standalone service and also rely on distribution through pay-TV providers such as -- AT&T's own DirecTV unit.
The WSJ reported last week that AT&T was "exploring" ways to unload DirecTV, including a possible spin-off or a sale/merger with a company such as Dish Network. The report also said AT&T might ultimately hold onto DirecTV, which still generates heaps of cash (which could help AT&T shrink its debt) despite weathering steep pay-TV subscriber losses in recent quarters. That report came soon after activist shareholder Elliott Management issued a letter to the AT&T board urging it to overhaul its front-office management and to take a look at divesting the struggling DirecTV unit it acquired four years ago for $49 billion.
It's also possible that AT&T flirted with the idea of selling DirecTV as part of a review, but ultimately decided that's the wrong direction. "We're constantly looking at the portfolio," he told the WSJ. "That's the normal course of business and it’s not unique to DirecTV."
Amid last week's report about the possibility that AT&T might pursue a sale of DirecTV, naysayers were quick to point out that a marriage with Dish Network, which could benefit from the cash generated from such a deal to help fund its mobile ambitions, would have a tough time getting past US regulators.
Stankey, viewed as a possible successor to company CEO Randall Stephenson, told the paper that he's not currently searching for his successor at AT&T's WarnerMedia division and that he has no intention of leaving his CEO post at the media giant. NBC News reported today that Jeff Zucker, the president of CNN and a former NBCU exec, is an internal candidate to take over for Stankey, citing five unnamed but "high-level WarnerMedia sources."
AT&T Exploring Sale or Spin-Off of DirecTV – Report Will AT&T Take DirecTV for a Spin[Out]? AT&T Video Sub Losses Hit Record Highs HBO Max to Take Many Paths to the Consumer AT&T Could Win in 5G, but Needs an Overhaul First, Activist Investor Says — Jeff Baumgartner, Senior Editor, Light Reading
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