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AT&T agreed to sell a stake of its pay-TV unit to private equity firm TPG, per The Wall Street Journal. TPG is paying $1.8 billion in cash for a 30% stake.
The deal will merge DirecTV and AT&T TV services into one entity that TPG and AT&T jointly operate. The new company is valued at $16.25 billion with around $6.4 million in debt.
In 2015, AT&T acquired DirecTV for $48.5 billion, but cord-cutting caused the value of the satellite-based service to plummet, forcing the company to pivot its business strategy.
DirecTV’s NFL Sunday Ticket has been integral in that fall from grace, racking up $2.5 billion in losses.
The service has around 2 million subscribers but has lost significant momentum since its launch in 1994. With packages costing up to $399, the service has lost buy-in from fans who can find more affordable viewing options.
AT&T is near the end of an eight-year, $12 billion exclusive rights package for Sunday Ticket that expires in 2022 along with other NFL TV deals. There is no clear indication on whether AT&T will extend the partnership.
Disney and the NFL reportedly reached a media rights agreement today that will keep “Monday Night Football” on ESPN and bring the Super Bowl to ABC for the first time in over 15 years.
“We don’t negotiate through the media,” an NFL spokesperson told Variety.
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