AT&T is selling part of its TV business, which consists of the DirecTV, AT&T TV and U-verse brands, to private equity firm TPG in a spinoff deal as it looks to shed assets to deal with a burdensome debt load and focus on its mobile telephone and streaming businesses.
The deal, which will give TPG a minority stake, values the TV business at $16.25 billion -- about one-third of the $48.5 billion AT&T paid just for DirecTV in 2015.
AT&T carries $157 billion of debt as of December, the result of megadeals including its purchases of DirecTV and Time Warner, which it paid $85.4 billion for in 2018. The entertainment industry has been disrupted by Netflix and an array of competitors fighting for viewers' attention, complicating plans for DirecTV, which lost more than 3.2 million subscribers in 2020, and for HBO, considered the crown jewel of Time Warner's business.
The companies hope to fix challenges facing DirecTV -- namely a subscriber base that has been bleeding customers faster than most pay-TV services.
"We certainly didn't expect this outcome when we closed the DirecTV transaction in 2015, but it's the right decision to move the business forward," said John Stankey, AT&T's chief executive.