DirecTV Adds Fox Nation, Fox Weather Streaming Services

AT&T-owned DirecTV March 21 announced it has added Fox News Media’s subscription streaming video service, Fox Nation, across the satellite TV distributor’s platforms.

Conservative-leaning Fox Nation will now be available on DirecTV as a premium add-on, which began yesterday with plans to expand availability to DirecTV Stream this summer. Additionally, Fox Weather, the free ad-supported streaming television (FAST) weather service, is scheduled to debut on DirecTV Stream beginning March 29.

“We want to empower our customers with more capabilities in how they choose to watch the content they care about most,” Rob Thun, chief content Officer at DirecTV, said in a statement.

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The move comes after DirecTV dropped One America News Network (OANN), which critics contend has streamed conspiracy theories about the COVID-19 pandemic and the 2020 election.

DirecTV subscribers can add Fox Nation for $5.99 per month, which includes a 60-day free trial. Featuring nearly 5,000 hours of original content, Fox Nation’s range of programming includes original series (“Tucker Carlson Today,” “Tucker Carlson Originals,” “COPS,” “Crime Stories with Nancy Grace,” and “What Made America Great with Brian Kilmeade”) and curated programming featuring original and acquired content (the upcoming “Yellowstone One-Fifty” hosted by Kevin Costner, “Grateful Nation,” “Keep the Faith,” “Clint Eastwood: American Outlaw,” “Fox Justice,” “All American Christmas”). Additionally, subscribers will have access to Fox News Channel’s primetime shows on demand the next day with “Fox News Primetime All the Time,” as well as signature opinion programming such as “The Dan Bongino Show.”

Additionally, DirecTV Stream, plans to add Fox Weather beginning March 29 before Fox Nation joins its lineup in the coming months. Fox Weather launched in October 2021 with a team of more than 120 meteorologists. The service features a comprehensive suite of weather products with local, regional, and national reporting, in addition to live programming.

Utilizing multiple radar systems, including an immersive mobile 3D radar, Fox Weather offers viewers an innovative approach to forecasting, including coverage surrounding all weather patterns, from immediate to long-term.

Dish CEO Ergen (Again) Says DirecTV Merger ‘Inevitable’

On the heels of losing nearly 600,000 pay-TV subscribers in 2021, Dish CEO Charlie Ergen again advocated for his satellite TV operator’s business to merge with rival DirecTV Stream. Dish and DirecTV attempted to merge 20 years ago, but federal regulators cited the potential for a monopoly as a reason for their rejection.

But that was before over-the-top video, i.e., Netflix, Amazon Prime Video, Hulu and Disney+, turned the pay-TV ecosystem on its ear. Dish ended 2021 with 8.2 million subscribers, about the same number of subs Dish had operating as EchoStar Communications in 2002. That was down from more than 8.8 million subs at the end of 2020. At its peak, Dish had more than 15 million subs.

Speaking on the Feb. 24 fiscal call, Ergen reiterated his view that a renewed merger with DirecTV makes a lot of sense in today’s pay-TV market.

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“I think it’s inevitable that Dish and DirecTV go together,” Ergen said. “Otherwise, both companies will just melt away, and there’ll be no service for customers. The regulatory reasons to not allow it, don’t exist anymore.”

AT&T, majority owner of DirecTV, a year ago spun off a minority stake/majority control of the business, including AT&T TV and U-verse pay-TV services, to private investment group TPG Capital for $16.25 billion. Merging the two platforms could result in $1 billion in cost savings.

Report: Dish, DirecTV Merger Getting Second Wind

U.S. satellite-based pay-TV operators Dish and DirecTV have oft been the speculation of a merger, with politics and government regulation impeding a deal. But with the satellite TV market continuing to decline due to ongoing consumer migration toward over-the-top video, the competing companies reportedly are keen again to consummate an agreement.

Indeed, DirecTV has seen a 40% drop in subscribers to 15 million from 25 million subs in 2017. Dish ended its most-recent fiscal period with 8.4 million subs — down from almost 9 million subs in the year-ago period.

DirecTV parent AT&T last year spun off a minority stake (and operational control) of the satellite operator, online platform AT&T TV and cable service U-verse to private equity firm TPG Capital for $8 billion. The consolidated companies were then rebranded DirecTV Stream.

“TPG is driving the conversations. They want their investment back,” a source close to the negotiations told The New York Post.

Dish founder/CEO Charlie Ergen has long advocated for a merger of the two companies — albeit on his terms.

“In terms of DirecTV and Dish, I mean obviously I think that those two companies go together, that’s inevitable,” he said on Dish’s most-recent fiscal call.

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Ergen believes that in the current market, regulatory concerns have been minimized due to the continued rollout of broadband nationwide and ongoing competition from programmers themselves launching streaming platforms. In 2020, the DOJ reportedly quashed a merger between DirecTV and Dish, citing 5G’s sputtering rollout nationwide.

The next-generation wireless format is seen as a competitive alternative against any possible satellite TV market control DirecTV and Dish might wield.

“I think it’s a timing issue more than anything else,” said Ergen, who reportedly wants a seat at the head of the table of the merged distributors.

Regardless, with satellite distribution dying in the U.S., a combined DirectTV/Dish unit would be preferred, especially for rural and RV customers dependent on satellite service.

“The FCC and DOJ would likely both conclude that having one strong satellite competitor is better than none at all — and the future is not terribly bright even together, but especially alone,” Craig Moffett, analyst with MoffettNathanson, told The Post.

Amazon Prime Video Eyeing NFL’s ‘Sunday Ticket’ Rights

With week one of the 2021-22 NFL season almost in the books, Amazon reportedly is in the hunt to expand upon its “Thursday Night Football” exclusive rights. After wresting the mid-week game rights from Fox, Amazon now wants “Sunday Ticket,” the out-of-market game package DirecTV has sold to subscribers for the past 27 years.

With AT&T spinning off DirecTV to a private equity group, and the satellite TV operator’s latest NFL agreement set to expire in 2022, the league is shopping the rights to interested parties for a reported $2.5 billion annual fee. DirecTV currently pays $1.5 billion a year.

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Few companies have the fiscal resources Amazon has entertain such as price tag. The e-commerce behemoth earlier this year agreed to pay the NFL $1 billion annually for 11 years for exclusive rights to “Thursday Night Football” on Prime Video. Other media giants expressing interest in “Sunday Ticket” include Apple and Disney-owned ESPN.

NBCUniversal’s Peacock streaming service is not expected to make a bid, according to CNBC, which originally broke the story. NFL Commissioner Roger Goodell told the network last week that the league was looking for unified streaming partner that would also be willing to invest in the league-owned NFL Network and NFL RedZone, the latter switching to live action when any team on offense is close to scoring.

Amazon has not officially commented on the negotiations, which remain ongoing.

DirecTV to Officially Switch to ‘DirecTV Stream’ Aug. 26 as Dish Merger Scuttlebutt Grows

Satellite TV operator DirecTV beginning Aug. 26 will officially switch its brand name to DirecTV Stream. The distributor, which AT&T sold a controlling minority stake of to private equity group TPG Capital earlier this year, is looking to capitalize on the streaming video phenomena birthed by Netflix, Amazon Prime Video and Hulu, and now driven as well by Disney+, HBO Max, Paramount+ and online TV.

“AT&T satellite, streaming or IP video customers will automatically keep their video service, any bundled wireless, Internet or HBO Max services, and associated discounts with no action needed,” Bill Morrow, CEO of DirecTV, said in a statement.

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The newly branded DirecTV Stream will become the single brand for video streaming services previously launched by AT&T, with the exception of HBO Max.

Regardless of the name change, media chatter about a merger between satellite operators Dish Network and DirecTV continues to gain steam. Dish Chairman Charlie Ergen contends that with AT&T unloading DirecTV to a private party, regulatory concerns about the two companies combining operations would appear to lessen.

“In terms of DirecTV and Dish, I mean obviously, I’ve said it the last year, I think that those two companies go together, that’s inevitable,” Ergen said on the most-recent fiscal call. “From a regulatory point of view, it is less objection to it because [of the] hundreds of billions of dollars of broadband deployment and continued competition from the programmers themselves in the marketplace.”

Both Dish and DirecTV have been hemorrhaging pay-TV subscribers for years as consumers migrate to over-the-top video alternatives. Dish saw its net sub base (including online platform Sling TV) dip below 10 million for the first time in the most recent quarter. AT&T pay-TV subs dropped 13% to 15.7 million.

“We’ll just have to wait and see whether there is a desire on their[TPG]  part to do that, but I think it’s a timing issue more than anything else,” Ergen said.

AT&T Closes DirecTV Spinoff, Video Services Branded DirecTV Stream

AT&T and TPG Capital have closed their transaction establishing a new company named DirecTV. The new company will own and operate the DirecTV, AT&T TV and U-verse video services previously owned and operated by AT&T.

The newly branded DirecTV Stream will become the single brand for video streaming services previously launched by AT&T, excluding HBO Max. The transition will happen later this month. As a part of the deal, AT&T satellite, streaming or IP video customers will automatically keep their video service, any bundled wireless, internet or HBO Max services, and associated discounts with no action needed.

Not included in the transaction are WarnerMedia’s HBO Max streaming platform and regional sports networks, both of which are part of the pending WarnerMedia-Discovery transaction; Vrio (AT&T’s Latin American video operations, which are being sold to Grupo Werthein); U-verse network assets; and AT&T’s Sky Mexico investment. DirecTV will continue to offer HBO Max to subscribers along with any bundled wireless or broadband services and associated customer discounts.

DirecTV had approximately 15.4 million premium video subscribers at the end of the second quarter of 2021.

AT&T contributed its U.S. video business unit to the new entity in exchange for preferred units as well as a 70% interest in the common units of DirecTV. TPG contributed approximately $1.8 billion in cash to DirecTV in exchange for preferred units and a 30% interest in common units of the new company.

The DirecTV board will include Bill Morrow, CEO of DirecTV, and voting board members Steve McGaw and Thaddeus Arroyo, appointed by AT&T; and David Trujillo and John Flynn, appointed by TPG.

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“This is a watershed moment for DirecTV as we return to a singular focus on providing a stellar video experience,” Morrow said in a statement. “Building on our recent momentum, we are well-positioned to bring unparalleled choice and value to all of our customers under one iconic brand, whether they beam it or stream it.”

At close, AT&T received $7.1 billion in cash ($7.6 billion net of approximately $470 million cash on hand) and transferred approximately $195 million of video business debt.

Walmart Expands Board With Ex-AT&T Boss Randall Stephenson Appointment

NEWS ANALYSIS — Walmart has named former AT&T CEO Randall Stephenson to its board of directors, effective March 3, expanding the board to 12 members. Stephenson, who retired less than 12 months ago with a reported $270,000 monthly pension and benefits after 13 years as CEO of AT&T, is being sought for his “leadership skills and insights in finance, technology, retail and brand management,” according to Greg Penner, chairman of the Bentonville, Ark.-based retail behemoth’s board.

“We look forward to working with him as we drive Walmart’s strategy forward and continue providing effective governance for all our stakeholders,” Penner said in a statement.

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Stephenson will join a board whose annual compensation per member ranges from $260,000 to Penner’s $500,000 — with virtual meetings occurring as often as determined to be “necessary or appropriate.”

No doubt Stephenson has experience at the highest levels within corporate America. He also has a fiscal legacy some might question as less than effective. When the 60-year-old Stephenson departed AT&T, he left the telecom-turned-Hollywood player saddled with a staggering $180 billion in debt — a fiscal burden AT&T continues to labor downsizing to manageable levels.

The bulk of that debt was incurred following two high-profile Stephenson-led acquisitions: The 2014 purchase of DirecTV for $67 billion, including the assumption of satellite TV operator’s debt; and the 2016 acquisition of Time Warner for $85 billion, plus assumption of the media giant’s outstanding debt. Time Warner properties Warner Bros., HBO (and HBO Max), and Turner operate under the WarnerMedia umbrella.

Following closure of the Time Warner deal former President Trump’s Justice Department tried to derail, citing antitrust issues, activist hedge fund Elliott Management sent a letter to Stephenson and the board questioning why AT&T needed to own a movie studio, and wondering if the telecom could pay off its debt, among other issues. Elliott later sold all of its 5 million AT&T shares.

Indeed, no sooner had the ink dried on the DirecTV deal than the pay-TV operator began hemorrhaging subscribers to over-the-top video competitors such as Netflix — a common theme within linear TV. Subsequent efforts to hitch a ride to online TV via DirecTV Now failed. The platform is now called AT&T TV Now, with AT&T announcing a $10 monthly rate hike, effective in April. AT&T’s legacy pay-TV platforms lost a combined 617,000 subscribers in 2020.

Through Dec. 31, 2020, AT&T wrote off $15.5 billion for the DirecTV business. That came in addition to a $13.8 billion AT&T fiscal loss in the fourth quarter and a $5.2 billion loss for the fiscal year. In February, AT&T spun off 30% of DirecTV in a $8 billion cash deal with private equity group TPG to to create “New DirecTV,” encompassing satellite, online TV and cable service U-verse.

“The AT&T deal with TPG is good, it will keep investors, workers, customers and executives happy,” analyst Jeff Kagan wrote in a March 1 blog post.

AT&T Spinning Off Pay-TV Units in $8 Billion Cash Deal

As expected, AT&T Feb. 25 announced a $8 billion cash deal with private equity group TPG to create a new company, dubbed New DirecTV, encompassing satellite TV operator DirecTV, online TV platform AT&T TV and cable service AT&T U-verse.

The telecom giant said it would use the funds to pay down debt accrued in its $85 billion acquisition of Time Warner in 2016, in addition to focusing company interests on WarnerMedia, HBO Max and 5G.

Under terms of the transaction, which is expected to close in the second half of the year, New DirecTV will be jointly governed by a board of directors with two representatives each from AT&T and TPG, as well as a fifth seat for the CEO, which at closing will be Bill Morrow, CEO of AT&T’s U.S. video unit. Following the close of the transaction, AT&T will own 70% of the company and TPG will own 30%.

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AT&T expects to receive $7.8 billion ($7.6 billion in cash and the assumption from AT&T of $200 million of existing DirecTV debt). TPG will contribute $1.8 billion in cash to New DirecTV in exchange for preferred stock units.

“[The deal] supports our deliberate capital allocation commitment to invest in growth areas, sustain the dividend at current levels, focus on debt reduction and restructure or monetize non-core assets,” CEO John Stankey said in a statement.

AT&T has for some time tried selling off its pay-TV units, with little success. The premium TV business is shrinking as consumers gravitate toward over-the-top video services, including online TV. The company reported a loss of 617,000 subscribers in the most-recent fiscal quarter. It ended 2020 with 16.5 million combined DirecTV, AT&T TV and U-verse subs, down from 19.5 million at the end of 2019.

That AT&T TV is included in the deal underscores the telecom’s ongoing challenges in the niche market — as well as offering TPG a stake in an online TV ecosystem led by Disney-owned Hulu+Live TV with more than four million subscribers.

“As video consumption habits evolve, the new DirecTV will continue investing in its offering to provide value to its customers, including through next-generation streaming pay-TV services,” said David Trujillo, partner at TPG.

Redbox Owner in Talks to Buy AT&T’s DirecTV Business

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.

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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.”

 

AT&T Ups Effort to Sell DirecTV, Xandr and Crunchyroll

After years of acquisitions, AT&T is on a sales mode. The telecom’s on-again, off-again love affair with satellite pay-TV distribution appears to be off again. The company has reportedly hired a major investment banker to help unload DirecTV, which it acquired in 2015 for $48.5 billion just as online TV and subscription streaming video-on-demand was flourishing.

AT&T is also looking to offload anime-based streaming service/publisher Crunchyroll and Xandr, the online advertising unit launched just two years (following the $1.8 billion acquisition of AppNexus), but has struggled to gain traction due to a variety of issues in the rapidly changing digital ecosystem.

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With nearly $180 billion in debt following the $85 billion purchase of Time Warner (now WarnerMedia), AT&T has been looking to cut non-core assets. The debt is now down to $152 billion, and despite repeated denials from senior executives over the years, DirecTV appears to be on sales block.

The Wall Street Journal reports AT&T is working with Goldman Sachs to find a buyer willing to pay around $20 billion for 50% stake in the El Segundo, Calif.-based pay-TV operator. The sale is challenged by ongoing secular changes in home entertainment underscored by the loss of 7 million combined DirecTV/AT&T U-verse video subs in the past year.

As subscription streaming video-on-demand services such as Netflix, Amazon Prime Video and Hulu proliferate, AT&T has attempted to straddle traditional linear TV distribution with over-the-top video. The company has now moved much of its content distribution future into HBO Max, the $15 monthly SVOD platform, which plans to offer an ad-supported tier in 2021.

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“To the extent that we’re able to get those [pay-TV] customers engaged with us on those [streaming] platforms, then we’re in a good place, and we’re OK with that,” CEO John Stankey told CNBC in July. “And if that takes us down a path that says satellite delivery is less important, so be it.”

A possible merger with rival Dish Network is a favorite proposition for Dish founder/CEO Charlie Ergen, but some observers say the idea would trigger anti-trust issues from the government.

Xandr, which generated about $2 billion in revenue in 2019, had hoped to capitalize on the burgeoning digital ad market focusing on non-video displays. That strategy has apparently backfired as online video ads dominate and online TV publishers were reluctant to sell their ad inventory through Xandr due to AT&T’s competing HBO Max platform, The Journal reported, citing sources familiar with the situation.

Crunchyroll, which AT&T acquired in its purchase of Otter Media, is on the block for a reported $1.5 billion with interested suitors including Sony Corp.