Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Catch up on the day's biggest business stories
Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
Sign up for Axios NW Arkansas
Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters
Photo: AaronP/Bauer-Griffin/GC Images
AT&T is spinning off three of its video services, including its satellite TV brand DirecTV, to create a new standalone video company called New DIRECTV.
Details: The company will be jointly owned by AT&T and private-equity giant TPG. AT&T will retain a 70% stake and TPG will own 30% of the firm.
- The new company will also include AT&T's digital skinny bundle service "AT&T TV" and its internet-based TV service "U-Verse."
- The business will be operated as a standalone and is expected to be removed from AT&T’s corporate financial statements, according to a statement announcing the deal.
- New DIRECTV will be jointly governed by a board of five people. Two board members will be representatives from AT&T and two from TPG. A fifth seat will go to the CEO of the new company, which at closing will be Bill Morrow, CEO of AT&T’s U.S. video unit.
Why it matters: Activist investors have pressured AT&T to sell DirecTV, which the company bought for $49 billion in 2014. The satellite TV business has been in secular decline for years as viewers switch to streaming.
By the numbers: The deal will value the three units combined at an implied enterprise value of $16.25 billion, about 1/3 of what AT&T bought DirecTV for 7 years ago.
- Upon close of the transaction, AT&T will receive around $7.8 billion in cash to pay down debt. Nearly $6 billion of that will come from money that the new company will borrow from banks and pay AT&T back.
- TPG will pay $1.8 billion in cash for its 30% stake.
Be smart: AT&T has been selling smaller assets for months in an effort to offload debt from its $85 billion acquisition of Time Warner in 2018. AT&T said in a statement that it will use the proceeds from the DirecTV transaction to pay down its debt.