AT&T COO John Stankey is adamant that DirecTV isn't for sale, but a private equity firm is proposing something that's perhaps more enticing -- a restructuring that would see DirecTV spin out and combine with Dish Network while AT&T retains control of the newly formed company.
That's according to Fox Business, which says it has reviewed the deal documents assembled by the the private equity firm, Apollo Global Management.
The proposal, reportedly being pitched by Apollo to bankers, is not quite a sale, but rather a multi-faceted restructuring that would have AT&T offload DirecTV to a new entity, with Dish agreeing to sell itself to the new entity and keep a minority stake. Although AT&T would retain control of that new company, the deal itself would be financed by Apollo, Fox Business said.
AT&T declined to comment on the report.
Update: Dish Network also declined to comment.
"It's not a firm no, but it's not quite on the table," Fox Business' Charlie Gasparino said in on-air comments about Apollo's proposal. "We've reviewed the documents; it's real."
That proposal is entering view as activist investor Elliott Management continues to agitate for AT&T to overhaul its front-office management and look into divesting DirecTV, the struggling satellite TV company it acquired in 2015 for $49 billion.
In a recent interview with The Wall Street Journal, Stankey was clear that AT&T has no plans to sell DirecTV, holding that DirecTV will play a critical role in AT&T's streaming strategy and advanced advertising businesses.
A combo of DirecTV and Dish Network could help to drive critical economic scale into businesses that are hemorrhaging video customers in an era of cord-cutting and streaming options. But it's also not clear if the US Department of Justice would approve a combination of DirecTV and Dish Network and essentially remove a competitor from the picture, despite an influx of new OTT-TV entrants.
Also complicating matters is Dish's role in the still-pending T-Mobile/Sprint deal. In July, Dish announced a $5 billion deal to buy customers and spectrum from Sprint and an MVNO relationship with T-Mobile that ties into a bigger plan for Dish to build a 5G network. It's not clear how that agreement would factor into Apollo's restructuring proposal.
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— Jeff Baumgartner, Senior Editor, Light Reading