DIRECTV Fielding Final Buyout Offers

For the past couple years, it’s been no secret that AT&T has been looking to unload DIRECTV. They famously purchased it in 2015 for $49B and after the initial honeymoon period, seems like it was all irreconcilable differences thereafter. DIRECTV was arguably the biggest and best TV brand at the time (remember all those fun and catchy commercials?). Well, sadly, over the past handful of years it’s a been a gradual demotion of the service and brand within AT&T’s ecosphere of products. Fact is, AT&T is a huge company and trying to pair it with another major brand was always a difficult task. They gave it a solid try (hey, for the kids right), but it is probably in everyone’s best interest for someone else to take the reigns. DISH is one of the suitors but there are plenty of others — expect a final decision to be made by early 2021. Let’s take a look at the potential suitors and the possible ramifications for current and prospective DIRECTV customers…

If DISH buys them out, expect a ton of synergy

Charlie Ergan, DISH’s longtime CEO, has a knack for unlocking value. He’s grown DISH from just about nothing to one of the largest telecom players, all in the span of a few decades. He also has his eyes set on becoming a major wireless carrier, bringing a whole new suite of mobile and entertainment solutions under one roof. DISH hasn’t officially put out a bid for DIRECTV yet, but Ergen has publicly stated numerous times that he anticipates a merger between DIRECTV and DISH to be “inevitable”. Of course, such a move used to ruffle a few congressional antitrust feathers but with the advent of streaming and other TV options, the potential union is more than likely to get green lit.

For DIRECTV customers, it would likely all be positive. DIRECTV would get priority status back, technologies and synergies between the two companies would improve all facets of the service for the better…and likely happen quickly. As Ergen has mentioned once or twice, these days, the major competition between telecom companies isn’t really amongst one another, it’s mainly against the production studios that keep hiking distribution rates at contract renewal. You’ve probably noticed temporary blackouts of occasional channels during those times — eventually one side or the other concedes, both sides move on and the channel(s) go back on air. A united DIRECTV/DISH company would give them a ton of additional negotiating leverage, likely reducing distribution costs and hopefully reducing the prices customers pay for their plans.

Private equity firms have put forth the highest bids so far

Option two for AT&T would be to sell to the highest bidder. Private equity firms Churchill Capital and Apollo Global have both submitted formal bids. Both are for around $15B. Neither company has a real stake in the TV industry, so their primary motivation would be profit. Of course, that could either be good or bad, just depends on how it’s managed. They could also eventually transfer control or sell most or all of the company to DISH in time. At this point, anything is possible but we have very little doubt DISH will eventually merge with DIRECTV… it’s just a question of when. Ergen is a patient guy and often lets his interest be known, and waits until deals come to him. Tends to result in the best terms but might take a bit longer to materialize.

Wrapping up

We’ve always been huge DIRECTV fans. Not just due to the NFL but we watched it grow into one of the most well-loved brands in the country. So, it’s been a bit of a bummer to see it de-prioritized. It still has a great DVR (Genie), an awesome program guide and most of all, an iconic brand. So, current and new subscribers are still getting plenty of value but once it moves on, we look forward to following and covering its rebirth.

About the author

George Levint

George is the senior editor at DigitalFind and an expert in how technology at home impacts our lives. From funky analog radios to AI devices that try to out-think you, he's usually unfairly critical until proven otherwise. He also enjoys spending the occasional weekend off-grid to keep Skynet guessing.

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