AT&T completed a big component of its wholesale restructuring by finalizing the spinoff of DirecTV, which returned to being a separate company on Monday.
The new entity combines DirecTV, AT&T, and U-verse to offer a wide range of channels including ESPN, Fox Sports, MLB Network, NBA TV, TBS, and TNT.
The latter two’s NBA broadcasts were key to WarnerMedia’s strong second quarter. AT&T is in the process of spinning off WarnerMedia in a $43 billion merger with Discovery.
- AT&T received $7.1 billion in cash from the DirecTV spinoff, including $1.8 billion from private equity firm TPG. TPG took a 30% stake in the new DirecTV. AT&T owns the other 70%.
- DirecTV borrowed $5.8 billion as part of the transaction. Previous reports said that the company was selling $3.1 billion in junk bonds to facilitate the spinoff.
The move ends a saga that began with AT&T’s $48 billion acquisition of DirecTV in 2015. Since then, the service lost 40.8% of its subscriber base, which dropped from 26 million six years ago to 15.4 million today.
AT&T is already making moves to establish a different role in the content provider space. In July, it inked a deal worth at least $5 billion to be Dish Network’s primary network services provider.