AT&T <\/b>is considering selling satellite TV business DirecTV, The Wall Street Journal reported on Friday. Potential bidders include Apollo Global Management Inc.<\/b> and Platinum Equity<\/b>, the Journal reported. <\/p>\n
AT&T bought DirecTV in 2015 in a deal valued at $48.5 billion. Including DirecTV\u2019s debt, the total purchase price was about $67.1 billion. According to the Journal, a possible deal now could bring AT&T only about $20 billion.<\/p>\n
AT&T\u2019s Pay-TV business is rapidly losing subscribers. In AT&T\u2019s most recent financial results for Second Quarter (Q2) 2020, the company reported a loss of 886,000 premium TV subscribers for services DirecTV, U-verse, and AT&T TV, and another 68,000 subscribers lost for AT&T TV NOW, a live streaming service. <\/p>\n
Craig Moffett of MoffettNathanson<\/strong> pointed out in an analyst note that this idea has been floated repeatedly over the past year. Moffett wrote that AT&T is levered at close to 3.5 times EBITDA, a leverage ratio out of range for an investment grade issuer with falling revenue and EBITDA. <\/p>\n \u201cEven in this credit market, it\u2019s all but impossible to lever a business shrinking that quickly, so the capital structure of any take-out would have to be very equity-heavy. And no private equity buyer could assume an exit from the investment \u2013 an IPO, say, or a flip to someone else down the road \u2013 again because the rate of decline is so rapid. So a buyer would have to assume they would be running the business for cash. The only way for a potential buyer to meet a reasonable return hurdle in that scenario would be to get in at a very low entry multiple,\u201d Moffett wrote. <\/p>\n In Via Satellite<\/i>\u2019s September issue, Moffett said satellite TV business at AT&T \u201cfeels for all the world like a death spiral,\u201d as prospects for satellite TV in the U.S. continue to shrink. <\/p>\n","protected":false},"excerpt":{"rendered":" AT&T is considering selling satellite TV business DirecTV, The Wall Street Journal reported on Friday. Potential bidders include Apollo Global Management Inc. and Platinum Equity, the Journal reported. AT&T bought DirecTV in 2015 in a deal valued at $48.5 billion. Including DirecTV\u2019s debt, the total purchase price was about $67.1 billion. According to the Journal, […]<\/p>\n","protected":false},"author":1,"featured_media":57997,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-59104","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/59104"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=59104"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/59104\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media\/57997"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=59104"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=59104"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=59104"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}