DirecTV completes spinoff from AT&T, will turn AT&T TV into DirecTV Stream
So long, AT&T TV... hello again, DirecTV.
Eli BlumenthalSenior Editor
Eli Blumenthal is a senior editor at CNET with a particular focus on covering the latest in the ever-changing worlds of telecom, streaming and sports. He previously worked as a technology reporter at USA Today.
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DirecTV's spinoff from AT&T is now official. After first being announced in February, on Monday afternoon DirecTV announced that it has completed the transaction which will see the telecom giant own 70% while private equity firm TPG holds 30%.
The new company, which was referred to as New DirecTV during the spinoff process, will simply be called DirecTV going forward and consist of the DirecTV satellite service, AT&T TV streaming cable offerings as well as U-Verse TV, AT&T's cable television service. The company had 15.4 million customers at the end of the second quarter.
Bill Morrow, who took over the role of CEO of DirecTV in February, will continue to lead the standalone company, which was valued at $16.25 billion earlier this year.
"DirecTV, if you just think about the words that's involved in that, it's still relevant," Morrow told CNET about the decision to keep the DirecTV name. "And the brand actually does have some intangible value out there," he continued, noting that the company has a history of being a challenger starting from its roots as an alternative to cable television providers.
Even as the company continues to build out its streaming side, Morrow isn't giving up on the satellite business and said that people have been "overstating" the death of the industry.
"I don't see this thing going away in the next 10 years," he said, conceding that "maybe in two decades... I'd call it in the second decade from now, I think there'll be a few questions" about its survival.
Morrow also hasn't ruled out a possible tie-up with rival satellite TV provider Dish, though he said that "at this point" his company is "not in any sort of discussions about emerging or consolidating anything," adding that "it's not unreasonable to think about how that might look in the future."
The end of the (brief) AT&T era
The spinoff deal was initially set to net AT&T $7.8 billion, a far cry from the $48.5 billion (not including debt) that it paid to acquire DirecTV when that original deal was announced in 2014. In Monday's announcement, AT&T disclosed that it received $7.1 billion at the close of the deal in cash, with the transaction having a net value of $7.6 billion when factoring in cash on hand.
The DirecTV transaction is just one of two major media shake-ups at AT&T, which is in the process of restructuring itself after spending billions of dollars acquiring media companies in recent years.