In a significant move that marks AT&T's complete withdrawal from the entertainment sector, the telecommunications giant has announced the sale of its remaining 70% stake in DirecTV to private equity firm TPG Partners. This $7.6 billion deal comes just three years after AT&T initially sold a 30% stake to TPG, signaling the end of its tumultuous venture into satellite TV.
The sale represents a stark contrast to AT&T's initial $48.5 billion acquisition of DirecTV in 2015, highlighting the challenges faced by traditional TV providers in an increasingly streaming-dominated landscape. Here are the key details of the transaction:
- Deal Value : $7.6 billion
- Buyer : TPG Partners (already owns 30% stake)
- Expected Closing : Second half of 2025
- Payment Structure :
- $1.7 billion in the second half of 2023
- $5.4 billion in 2024
- Remaining amount in 2029
This strategic move allows AT&T to refocus on its core competencies as a wireless 5G and fiber connectivity provider. The company aims to strengthen its balance sheet by accelerating cash flow that was originally expected over the next several years.
The decision to divest comes after DirecTV's struggles with subscriber losses and recent content disputes. In September, DirecTV faced a nearly two-week blackout of Disney-owned channels, including ESPN and ABC, due to carriage fee disagreements.
For TPG Partners, this acquisition presents an opportunity to fully control DirecTV's operations and potentially navigate the challenging pay-TV landscape. However, the private equity firm faces the daunting task of managing a business that has been losing ground to streaming services.
As the media and telecommunications industries continue to evolve, this deal underscores the shifting priorities of major players and the ongoing challenges in the traditional TV market. It remains to be seen how TPG will position DirecTV in an increasingly competitive and fragmented entertainment ecosystem.