DIRECTV and DIRECTV Stream – the deal is done

Boy, I wish I hadn’t recorded that podcast yesterday. In it, I said the deal “would” close, and well, it already has.

Confused? Let’s step back a moment.

AT&T has completed its spinoff of DIRECTV, which is once again a separate company. The new company is privately owned, with AT&T retaining 70% ownership. TPG, a private equity firm, owns 30% and has operational control. The final value of the deal is $7.6 billion, which sounds like a lot until you realize that AT&T paid about $48 billion for DIRECTV just six years ago.

The new company includes DIRECTV satellite TV and all the streaming assets previously branded as DIRECTV (such as NFL Sunday Ticket) as well as AT&T TV, which has been branded as DIRECTV Stream. Some media outlets are saying that the new company has control of all AT&T streaming properties except for HBO Max. I think that’s misleading. The streaming companion apps for TNT, TBS, CNN, and the like are likely to stay with AT&T until it fully spins off WarnerMedia to Discovery.

What this means to you today

As of today, it means nothing. Seriously. Nothing changes on the back end, other than a new logo. Eventually DIRECTV will have to undo all the steps it took to integrate its systems with AT&T, but that will take years.

What this means to AT&T

I have to admit I was very optimistic when AT&T took over. I really thought that AT&T would use its massive assets to shore up DIRECTV’s dominance. It seems like they did the opposite. You can’t blame AT&T for the accelerated shift to streaming, but you can say that they didn’t really help DIRECTV deal with it. There was very little new hardware produced, and operating costs remained so high that the service cost to the customer kept spiraling out of control.

Moving DIRECTV to a different part of its balance sheet frees AT&T up to focus on core businesses. They’re divesting all their satellite and streaming assets this year. This means they can focus on being an even better cellular and internet company. They’ll still have some synergy with WarnerMedia and DIRECTV. That’s not going away. But they’ll be able to do what they do best.

What this means for the future

The folks I speak to at DIRECTV are incredibly excited. They feel like they have room to stretch out and grow. They tell me that this change gives them the power to become the company they want to be. And that’s incredibly exciting for us all as customers.

DIRECTV and DIRECTV Stream are now managed under the same umbrella and I have a feeling that’s going to mean something really good for customers. Engineers at DIRECTV are aware that there are cable companies who have caught up with their technology. This is going to give them the opportunity to shoot back up to the top of the heap.

All I can say is that this is a great opportunity for DIRECTV customers. The best is yet to come! Keep watching this blog for more information about DIRECTV and all the new products we’ll be seeing together in the coming months and years!

About the Author

Stuart Sweet
Stuart Sweet is the editor-in-chief of The Solid Signal Blog and a "master plumber" at Signal Group, LLC. He is the author of over 8,000 articles and longform tutorials including many posted here. Reach him by clicking on "Contact the Editor" at the bottom of this page.