DirecTV, the satellite TV and streaming provider, is now under new corporate ownership. AT&T has finished selling its stake in the company to private equity firm TPG, which probably won’t be any better for DirecTV subscribers.
You might recall that DirecTV was acquired by AT&T in 2015, right as the ‘cablecutting’ trend of switching from traditional TV providers to streaming services (and back to over-the-air television) was in full swing. AT&T and DirecTV didn’t do much to stay competitive with streaming services, and the company continued to lose subscribers for years. In 2021, AT&T spun off DirecTV into its own independent company and kept a 70% ownership stake, with private equity firm TPG getting 30% ownership.
DirecTV was attempting to merge with Dish TV’s owner, Echostar, for much of last year. The deal would have essentially created a satellite TV monopoly in the United States, but with that market continuing to shrink every year, it might not have mattered all that much. Echostar was also hoping to put that money towards its 5G network deployment for Boost Mobile. That deal collapsed over disagreements with debt exchange.
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Fast forward to today, and AT&T has now completed the sale of its 70% stake to TPG, giving TPG full ownership of DirecTV. Private equity firms like TPG are supposed to revamp the operations of the companies they invest in or purchase, with the goal of turning them into more sustainable businesses, but it doesn’t always go that way. DirectTV, Dish, and other TV providers have spent the last decade squeezing more profit out of their continually-diminishing customer bases, and streaming services are still dominant. Even if DirecTV can be salvaged, it will probably involve more price hikes for customers.
There are signs of a strategy shift, though. DirecTV is already experimenting with ending new signups for satellite TV, with customers being pointed towards the company’s streaming TV options instead. It also launched a new streaming service specifically for sports earlier this year, called MySports, priced at $70/month. If the company is still around in a few years, it will probably look a lot more like Sling or YouTube TV.
Source: AT&T, The TV Answer Man
