AT&T has reportedly jumped into exclusive talks with private equity firm TPG about acquiring a minority stake in DirecTV, according to Reuters.
The firm is said to currently be in the lead to buy the struggling satellite provider in a deal that could value the company at $15 billion. In 2015, AT&T paid $48.5 billion for DirecTV and took on the company’s approximately $18 billion in net debt.
Reuters said the deal – which could be announced in the coming weeks – would help AT&T cut its net debt down to around $150 billion.
In December, the Wall Street Journal reported that AT&T is looking to get DirecTV off its books and give up operational control of the company while still maintaining majority ownership.
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A deal for DirecTV would help AT&T further streamline its linear video product lineup. Earlier this month, AT&T announced that it would roll AT&T TV Now into AT&T TV. That means that the company is no longer accepting new customers for AT&T TV Now, its slowly shrinking virtual MVPD. Last year, the company stopped selling U-verse video service to new customers.
DirecTV lost another 590,000 subscribers in the third quarter. According to the Wall Street Journal, the service has lost 7 million U.S. customers over the past two years. In the meantime, AT&T has focused on its primary software-based video products, HBO Max and AT&T TV, as the “optimal way to meet customer needs” for both live, linear and on-demand content.
“Do I think satellite is necessary to respond in that area? You can go back and look at comments I made very early on, post-transaction of DirecTV, that we didn’t necessarily make that move because we love satellite as a technology to deliver premium entertainment-based video content. We like the customer base and it was an opportunity to move that customer base into the right technology platforms moving forward and that’s clearly where we’re investing,” said AT&T CEO John Stankey during the company’s second quarter 2020 earnings call.
A previous version of this article incorrectly said that AT&T could reduce its net debt to around $150 million instead of $150 billion.