The constant shifts in the pay-TV landscape have kept the various service providers on edge. AT&T Inc (NYSE:T) is one among the many companies looking for ways to survive in the fast-changing business worldwide. Streaming businesses have been on the rise lately, and that pulls along with cord-cutting.
Difficult times face DirecTV
DirecTV is struggling as the service providers continue looking for ways to remain relevant in the fast-shifting business climate. AT&T has been operating its video business for many years, but circumstances are forcing it to make some difficult choices. The business took to selling out a minority stake of this business to TPG, which happens to be a private equity firm. AT&T TV, DirecTV, and U-Verse have been sold out at a combined price of $16 billion.
Market experts have termed the deal an ill-timed one, as the company strives to get in terms with the whole cord-cutting saga.
MoffettNathanson, who happens to be a telecom analyst, has spoken about the latest changes, terming the merger between the two companies a nonsensical one. Moffett says that no one should pretend that he/she didn’t see the danger that lay ahead.
Establishing new company
However, the important thing is to make some progressive plans for the future. AT&T and TPG embark on the creation of a new company which they are naming “New DirecTV..” The terms of the deal stipulate that AT&T will be enjoying a 70% stake in the latest venture. The company sees this as a good thing, and that is from the perspective, it might serve as a source of “future value creation opportunities.”
One AT&T spokesperson has spoken about how the business has been going about matters, and he started talking about the acquisition of DirecTV. This spokesperson disclosed that they channeled a whopping $60 billion in the US video business, hoping things would work out well.
He agrees that some of the company’s transactions have been disappointing because they didn’t work out according to plan. As an example, he points out how matters played out with the US’s TV households. According to the official, the number declined significantly because of as a result cord-cutting.