DIRECTV to spin off from AT&T – here’s what it means

Folks, this news hit yesterday and rather than just parrot the press release like every other news outlet, I thought it might make sense to get some more background. After all, the people who read this blog aren’t just DIRECTV customers. Some of us are DIRECTV fanatics, and we deserve some straight talk.

What we know for sure

According to the official press release, most of what we know now as AT&T’s Entertainment Group will be spun off to form a new company. That company will simply be called DIRECTV. It won’t be called “New DIRECTV” as some outlets have claimed. That’s just a nickname. This will be a privately held company, with AT&T holding 70% and TPG Capital holding 30%.

The new company will have DIRECTV Satellite, AT&T TV, and U-Verse as part of its portfolio.

Let’s talk about that valuation

The press release says that the new company has an implied “enterprise value of $16.25 billion.” A lot of folks are taking this to mean that AT&T took a bath on DIRECTV, because they paid a lot more for the company just six years ago. Folks I think we can all agree that pay-TV isn’t in the same strong position it was in the early 2010s, but does that really mean anything to you? As a user of the service, no it doesn’t. If you like DIRECTV, it’s the same DIRECTV. The number is just there for pundits to wag their fingers at.

Here’s what will change immediately

Nothing.

As a DIRECTV or AT&T TV customer, nothing changes. You still get the same service you always did. Nothing changes with your login, nothing changes with the technology. Nothing becomes instantly obsolete.

Signal Group, the parent of this blog and of SolidSignal.com, is still an AT&T Preferred Dealer and a DIRECTV dealer. Nothing changes about that as of today. We’re still here to take great care of you.

Rumors that DIRECTV and DISH will merge

For over a decade, there’s been a certain group of folks salivating at the idea that DIRECTV and DISH would someday merge. I’ve been pretty consistent that it’s unlikely. It’s certainly not going to happen today. Any change like that would be years in the future. Will it someday happen? I still think it won’t. I think that DISH is looking more at 5G services and more than anything, the two companies use incredibly different technologies. Really, I think it would take so much time and money to merge the two companies that they’d both lose in the end.

What this means for NFL Sunday Ticket

NFL Sunday Ticket is still exclusive to DIRECTV until after the 2022 season. This doesn’t change anything, and I’m sure the negotiations will go on.

What this means for HBO Max and other AT&T streaming properties

You should expect nothing to change in this area, honest. There’s every reason to think you will still be able to authenticate to every streaming app you get now. Just because DIRECTV won’t be under the same corporate umbrella as HBO or CNN shouldn’t make a bit of difference.

There is some question about the future for cellular customers who currently stream DIRECTV programming for free, but that’s not a result of this sale. It’s more a result of California’s net neutrality laws and that’s a subject for another article.

My wild, unfounded speculation

Before I get started, a disclaimer: I don’t have any insider information about this and I don’t claim to know the future. This is just the opinion of one person who’s been around DIRECTV for about 20 years and doesn’t represent anything but that.

I think this is great news. I think that we all went into the AT&T deal back in 2015 with great hopes and expectations. But, pay-TV subscriptions have eroded over that time. Customer needs have changed. I think that the “AT&T years” helped slim down some of the bureaucracy that used to exist and what’s left is a lean, smart organization. Now, that organization will be set free to do fantastic work. That’s what I expect.

With DIRECTV being its own business, with its own profit-and-loss, there will be a renewed focus on making money. That’s a good thing. We will see more of a focus on the customer because the customer drives profits. I think there’s likely to be a renewed focus on business customers, who drive a lot of profits and who aren’t likely to move to streaming for a lot of reasons. This means innovative ideas and possibly even some new hardware (finally.)

The “AT&T years” were good for DIRECTV, in a strange way because they helped the company get ready for the future. Now that the future is here, we can expect smart decisions and a laser focus on getting things right.

Bottom line

Solid Signal has seen a lot of changes to the ownership of DIRECTV in our almost 20 years in business. As a publicly traded company, DIRECTV was guided by GM (its original owner), News Corp (parent of Fox News and other properties)  and by Liberty Media (parent of Starz). As a subsidiary of AT&T, the company was guided by a different set of philosophies. In all that time the one thing that hasn’t changed is Solid Signal’s focus on our customers. We’re here for you now, and in the future. And I fully expect that DIRECTV will be as well.

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.