AT&T to Sell DirecTV Stake as Part of Groundbreaking Pay-TV Merger

AT&T has announced it is selling its 70% stake in DirecTV, marking a significant development in the satellite television industry. This move will create the largest pay-TV provider in the U.S. as DirecTV prepares to merge with Dish Network, owned by EchoStar Corp. As part of the agreement, Dish will be acquired for $1, along with the assumption of approximately $9.75 billion of Dish's debt. This transaction hinges on Dish’s bondholders accepting a reduction of at least $1.568 billion in the principal debt.

DirecTV is co-owned by AT&T and TPG Inc., and as part of the deal, TPG will purchase the remaining 70% stake in DirecTV from AT&T for $7.6 billion. AT&T originally acquired DirecTV for $67 billion in 2015.

This isn’t the first time DirecTV and Dish have considered merging. U.S. regulators blocked a previous attempt in 2002. However, with the media landscape evolving significantly over the last two decades, the merger is now seen as crucial for the survival of both companies, particularly as the rise of streaming services such as Netflix and Amazon Prime Video continues to disrupt the traditional pay-TV industry.

According to DirecTV CEO Bill Morrow, the merger is a strategic necessity, giving the combined entity more negotiating power with content providers. Morrow emphasized the unique position of the newly merged company, describing it as “the only pure-play, video-focused entity that’s content agnostic.”

The companies expect to realize at least $1 billion annually in cost savings as a result of the merger. DirecTV, which currently has around 11.3 million subscribers, will retain the DirecTV name post-merger while continuing to market the Dish and Sling TV brands. Dish has 6.1 million satellite customers and an additional 2 million subscribers to its Sling TV online streaming service.

In support of the deal, TPG, along with co-investors and DirecTV, will provide $2.5 billion in financing to refinance Dish's debt due in November 2024. The deal is expected to close by the fourth quarter of 2025, pending regulatory approvals.