December 9, 2020
Apollo Global Management, the investment group that acquired Redbox in 2016 for $1.6 billion, reportedly is in the running to acquire AT&T’s satellite operator DirecTV.
Apollo, along with Churchill Capital Corp. IV, have submitted separate bids around $15 billion for control of the El Segundo, Calif.-based DirecTV, which AT&T acquired in 2015 for $66 billion, including debt, according to The Wall Street Journal. AT&T would still be majority owner while relinquishing operational control of the pay-TV unit. A decision is expected early next year.
The telecom is attempting to reduce its triple-digit billion-dollar debt load after acquiring Time Warner for $85 billion in 2018, which led to the creation of WarnerMedia.
DirecTV, like most pay-TV distributors, is losing video subscribers to less-expensive over-the-top video platforms such as Netflix, Disney+, Hulu and Amazon Prime Video. AT&T is staking much of its future on streaming video through the launch of HBO Max and separately as a major distributor of high-speed Internet.
Speaking Dec. 8 on a virtual investor event, AT&T CEO John Stankey said that he is pleased with the company’s progress in managing costs and corporate structure and overhead and will continue these efforts. He said a focus on corporate efficiency has resulted in lower distribution costs even as volumes continue to improve and that the coronavirus pandemic has further accelerated a move to digital customer engagement that was already underway. Stankey reiterated that AT&T continues to take a deliberate and thorough approach to monetizing non-core strategic assets such as DirecTV.
“We still have opportunities to do some things around rejiggering our portfolio,” Stankey said. “We’ll continue to force ourselves to look at those hard decisions.”