AT&T COO says DirecTV is not for sale

DirecTV clouds
AT&T lost 778,000 traditional video subscribers (along with 168,000 DirecTV Now subscribers) in the second quarter. (Acabashi/Wikimedia Commons)

Perhaps putting to rest recent rounds of speculation about plans for DirecTV, AT&T COO John Stankey said the satellite operation is not for sale.

Stankey told the Wall Street Journal that DirecTV, which has lost millions of subscribers since AT&T acquired it in 2015, is “an important part of what we’re going to be doing going forward.” He did say that AT&T explored options for DirecTV as part of a broader review of AT&T’s assets but that was just standard practice.

Stankey said that DirecTV is an important piece of AT&T’s streaming video and advanced advertising strategy.

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceVideo!

The Video industry is an ever-changing world where big ideas come along daily. Cable, Media and Entertainment, Telco, and Tech companies rely on FierceVideo for the latest news, trends, and analysis on video creation and distribution, OTT delivery technologies, content licensing, and advertising strategies. Sign up today to get news and updates delivered to your inbox and read on the go.

Last week, the Journal reported that AT&T is exploring a divestiture of DirecTV. The report said the company has looked at potentially spinning off DirecTV into a separate public company, or potentially selling the company’s assets to rival satellite distributor Dish Network. But, according to a report from CNBC’s David Faber that surfaced around the same time, AT&T was not actively considering a sale of DirecTV.

RELATED: AT&T might sell DirecTV after all – report

A potential divestiture of DirecTV became a topic of discussion for AT&T after earlier this month Elliott Management, a hedge fund that recently took a $3.2 billion stake in AT&T, sent a letter to the company’s board. Among other suggestions for AT&T, Elliott urged the company to consider selling off its struggling satellite television business as the pay TV industry in the U.S. experiences secular decline.

“In fact, trends are continuing to erode, with AT&T’s premium TV subscribers in rapid decline as the industry, particularly satellite, struggles mightily,” the fund wrote in a press release. “Unfortunately, it has become clear that AT&T acquired DirecTV at the absolute peak of the linear TV market.”

AT&T lost 778,000 traditional video subscribers (along with 168,000 DirecTV Now subscribers) in the second quarter and is warning that video subscriber losses could push into the millions for the third quarter. But the company’s video entertainment revenues only dipped slightly, down 1.7% to $8.03 billion in the second quarter. The company’s overall entertainment group revenues fell just 1% year over year and operating income rose 2.6% to approximately $1.5 billion.

Suggested Articles

Hulu with Live TV will raise the price of its base package by $10, bringing the cost up to $54.99 per month. The price change will kick in on Dec. 18.

As AT&T TV Now falls back in the pack, Sling TV and Hulu with Live TV have emerged as the co-leaders among virtual MVPDs in terms of subscribers.

Verizon's Stream TV device, for now, doesn't support Netflix.