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The DirecTV Death Spiral Isn’t Going to Stop

DirecTV

It’s been known for many years that DirecTV has been bleeding subscribers, even more than most pay-TV outlets. It got to the point where parent company AT&T has announced plans to spin off the satellite broadcaster.

According to an SEC filing by AT&T, as cited by Yahoo Finance, AT&T lost 2.3 million video subscribers year over year, ending up with 15.412 million, representing a 13 percent drop. AT&T’s video division consists of DirecTV, as well as AT&T TV and AT&T U-verse

That said, the loss in the second quarter was lower than the last several quarters-the lowest, in fact, since late in 2018. AT&T lost 473,000 subscribers, but it had lost 887,000 in the second quarter of 2020, at the height of the pandemic.

The filing came ahead of AT&T’s planned release of quarterly earnings, on July 22.

Multiple Spinoffs

AT&T’s long process of seeking to sell off a stake in DirecTV finally came to fruition in February, when AT&T agreed to spin off DirecTV into a separate company, with private equity giant TPG owning a stake. AT&T will control 70 percent of the new company, with TPG owning the other 30 percent.

The deal is expected to close later this year.

“This agreement aligns with our investment and operational focus on connectivity and content, and the strategic businesses that are key to growing our customer relationships across 5G wireless, fiber and HBO Max. And it supports our deliberate capital allocation commitment to invest in growth areas, sustain the dividend at current levels, focus on debt reduction and restructure or monetize non-core assets,” AT&T CEO John Stankey said when the TPG agreement was announced.

A couple of months later, in a deal that came together much more quickly, AT&T announced another spinoff, announcing that WarnerMedia would be combined with Discovery Networks and spun off into a separate company. According to The Verge, the new company will be called Warner Bros. Discovery.

Discovery President & CEO David Zaslav will lead the combined company, AT&T and Discovery said in the release back in May, although executives from both companies will remain involved.

“With a library of cherished IP, dynamite management teams and global expertise in every market in the world, we believe everyone wins…consumers with more diverse choices, talent and storytellers with more resources and compelling pathways to larger audiences, and shareholders with a globally scaled growth company committed to a strong balance sheet that is better positioned to compete with the world’s largest streamers,” Zaslav said in a statement at the time of the merger.

 Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Written By

Stephen Silver is a journalist, essayist, and film critic, who is also a contributor to Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review, and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

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