AT&T is reportedly nearing the end of an auction for DirecTV and could complete a sale of its beleaguered satellite TV service in early 2021.
According to the Wall Street Journal, the company has received bids valuing DirecTV at more than $15 billion including debt. Special purpose acquisition company Churchill Capital is reportedly one of the bidders. Apollo Global Management, which has long been tied to a potential deal for DirecTV, reportedly submitted a bid valuing the satellite operator at less than $15 billion.
AT&T is reportedly looking to get DirecTV off its books and give up operational control of the company while still maintaining majority ownership.
In August, the Wall Street Journal reported that AT&T had renewed its efforts to offload DirecTV, which lost another 590,000 subscribers in the previous quarter. According to the report, DirecTV has lost 7 million U.S. customers over the past two years.
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During AT&T’s second-quarter earnings call, CEO John Stankey pointed toward his company’s 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,” Stankey said.
If AT&T can offload DirecTV for more than $15 billion, it will still be well below what the company originally paid. In 2015, AT&T paid $48.5 billion for DirecTV and took on the company’s approximately $18 billion in net debt.