# AT&T Reportedly Seeking Final Bids for DirecTV



## Bob Coxner (Dec 28, 2005)

AT&T Reportedly Seeking Final Bids for DirecTV

AT&T (T) - Get Report is seeking final bids for its DirecTV satellite-television unit by Friday, a media report said.

The New York private-equity titan Apollo Global Management and Churchill Capital, the New York special-purpose-acquisition company, are possible buyers, knowledgeable sources told The Information.

AT&T wants to reach an accord to divest a majority stake in DirecTV by year-end, the sources told the technology news service.

DirecTV has struggled since the Dallas telecom giant paid $63 billion for it in 2015. Viewers have fled satellite and cable -- so-called cutting the cord -- in favor of streaming over the internet to view TV and other video content.

"In the years since the deal closed, AT&T has lost about a quarter of its traditional television customer base (DirecTV satellite customers and AT&T's own U-verse subscribers), with customer losses accelerating sharply recently," Morningstar analyst Michael Hodel wrote in an April report.

"About 80% of AT&T's television customers receive service via satellite, a base particularly susceptible to online competition, in our view. AT&T's online (over-the-top, or OTT) television offerings have struggled to balance growth and profitability, as competition with new entrants like YouTube and Hulu remains fierce."

Further, "AT&T has sharply curtailed promotions and increased pricing on its television offerings, which has accelerated customer losses. On its own, DirecTV could withstand significant traditional customer losses while still generating attractive [returns on invested capital]. However, paying a hefty premium for this business has left little margin of safety for AT&T."

AT&T shares recently traded at $29.02, up 0.5%. The stock has dropped 26% year to date, compared with a 13% gain for the S&P 500.


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## MysteryMan (May 17, 2010)

Once Unto the Breach...


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## krel (Mar 20, 2013)

I can't imagine why dtv is struggling with the rate increase. And I take cable and satellite cos side on that. And att customer service is the most god awful I have ever encountered


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## harsh (Jun 15, 2003)

That was a pretty disappointing rehash of questionably current information. That half of the article was quotes from an eight month old report didn't impart a great sense of currency. 

I hate rebloggers. It is bad enough that most of what we hear is speculation and then to have someone speculate on that isn't doing anyone any favors.


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## mika911 (May 2, 2006)

I wonder what would happen if DirecTV does get sold because it seems like AT&T TV and AT&T TV Now share resources with DirecTV. I feel as though the channels come out of the same building. How would all this be split?


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## harsh (Jun 15, 2003)

mika911 said:


> I wonder what would happen if DirecTV does get sold because it seems like AT&T TV and AT&T TV Now share resources with DirecTV. I feel as though the channels come out of the same building. How would all this be split?


At least one of the more recent reports suggests that they wouldn't be split at all -- the bathwater would go out with the baby.


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## James Long (Apr 17, 2003)

In this case the baby ... the system making a profit ... is DIRECTV. The systems AT&T wants to keep are the streaming. At least that is what those pressuring AT&T to sell are pushing for.

Selling part of the Entertainment Division and keeping a majority stake sounds like a shell game. The concept that AT&T could keep the clout of the total subscriber count to get contracts and keep costs low doesn't fly. AT&T is having contract issues now ... Introducing a convoluted ownership scheme doesn't make contracts easier.

I agree with you opinion on rebloggers. Quoting no source articles doesn't give credence to what one is writing. It is just clickbait.


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## NR4P (Jan 16, 2007)

Anytime a money fund buys a company, its a terrible experience for consumers. Money funds do not put money into companies to improve it, they cut costs, people lose jobs and consumers suffer. There may be an exception to this but I now from first hand experience it is generally true.


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## DirectMan (Jul 15, 2007)

> =Selling part of the Entertainment Division and keeping a majority stake sounds like a shell game. The concept that AT&T could keep the clout of the total subscriber count to get contracts and keep costs low doesn't fly. AT&T is having contract issues now ... Introducing a convoluted ownership scheme doesn't make contracts easier.


It has nothing to do with a shell game. Selling 50 odd percent is all about deconsolidating D* from ATT so that it will become an investment. That way they don't have to report revenues of D* and explain the loss of subscribers. People will again focus on their base cell telecom business. Once they write down the D* investment with the sale it will no longer be an embarrassment for current management.


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## slice1900 (Feb 14, 2013)

NR4P said:


> Anytime a money fund buys a company, its a terrible experience for consumers. Money funds do not put money into companies to improve it, they cut costs, people lose jobs and consumers suffer. There may be an exception to this but I now from first hand experience it is generally true.


What investment is required to keep Directv going at this point? They don't need new satellites, and other than minor tweaks (i.e. HR44 to HR54 / C51 to C61 type of changes) they don't need new hardware. Probably the customer losses mean they can just recycle existing hardware and will have little need to manufacture anything new anyway. It is just ongoing expenses for managing the existing fleet, billing, customer service and so forth.

Having CSRs that aren't trying to handle all of AT&T's products in addition to Directv might even make them suck less.


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## harsh (Jun 15, 2003)

slice1900 said:


> What investment is required to keep Directv going at this point?


Programming costs for one.


> They don't need new satellites, and other than minor tweaks (i.e. HR44 to HR54 / C51 to C61 type of changes) they don't need new hardware. Probably the customer losses mean they can just recycle existing hardware and will have little need to manufacture anything new anyway.


There comes a point where the cost of refurbishing equipment surpasses the cost of building new. There's getting to be a rather large installed base of DVRs that are over the average life of CE gear and you have to wonder if it makes sense to refurbish equipment when the solid state elements begin to exceed design life expectancy.

Such is not to say that they have to design anything new, but they'll need to decide how they want to move forward at some point or the end will be driven by running out of functional subscriber-side equipment. All the while there are only so many features they can scuttle to keep the experience consistent (especially if LiL disputes continue their stratospheric increase).


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## harsh (Jun 15, 2003)

James Long said:


> In this case the baby ... the system making a profit ... is DIRECTV. The systems AT&T wants to keep are the streaming.


The previous marginally credible report from CNBC on November 3rd indicated that AT&T is indeed looking at parting off the entire premium TV content line and retaining only the Uverse network infrastructure.


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## NashGuy (Jan 30, 2014)

harsh said:


> The previous marginally credible report from CNBC on November 3rd indicated that AT&T is indeed looking at parting off the entire premium TV content line and retaining only the Uverse network infrastructure.


When they refer to the "Uverse network infrastructure," they're basically just talking about AT&T's wireline network, i.e. fiber-to-the-home and fiber-to-the-node (hybrid DSL/fiber) broadband. AT&T was obviously not going to sell that stuff.

What I found surprising in that CNBC report, contradicting earlier reports/speculation, is that AT&T is supposedly planning to sell off stakes not just in DTV but also in their IP-based cable TV services: Uverse TV, AT&T TV and AT&T TV Now (the latter two of which CNBC seems to lump together under the non-existent "AT&T Now" brand). But, due to the fact that all of those services mostly (or at this point, perhaps totally) rely on the same set of underlying channel carriage contracts, perhaps it's too complicated or risky for AT&T to try to separate DTV off from the others.



DirectMan said:


> It has nothing to do with a shell game. Selling 50 odd percent is all about deconsolidating D* from ATT so that it will become an investment. That way they don't have to report revenues of D* and explain the loss of subscribers. People will again focus on their base cell telecom business. Once they write down the D* investment with the sale it will no longer be an embarrassment for current management.


Yeah, I think this pretty much sums it up. AT&T just wants Wall Street to forget about DTV. Yes, it will continue to generate cash flow for the next several years but in ever-decreasing amounts as the subscriber base inexorably shrinks. It was a bad acquisition, purchased at its most valuable point in time. Now that Stankey is gone, AT&T can take part of the inevitable loss by selling off a big chunk of it (tacitly admitting the acquisition was a mistake), and then focus on wireless, broadband and Warner/HBO Max.

There were rumors recently that AT&T is considering selling CNN too. Which kind of makes sense, given that live news doesn't really fit in with their rest of the content strategy at Warner/HBO Max. And if they're semi-retreating from cable TV distribution, then maybe they become less interested in owning their own linear cable channels. If a CNN sale came to pass, my next question would be whether we see them drop live sports on TBS and TNT after their current broadcast rights end, and sell off Bleacher Report too. At some point, I think we'll just see all of the non-sports content (and possibly the live sports content too) that's carried on their linear channels -- TBS, TNT, TruTV, Cartoon Network, Boomerang and TCM -- available at the same time on HBO Max.


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## krel (Mar 20, 2013)

slice1900 said:


> What investment is required to keep Directv going at this point? They don't need new satellites, and other than minor tweaks (i.e. HR44 to HR54 / C51 to C61 type of changes) they don't need new hardware. Probably the customer losses mean they can just recycle existing hardware and will have little need to manufacture anything new anyway. It is just ongoing expenses for managing the existing fleet, billing, customer service and so forth.
> 
> Having CSRs that aren't trying to handle all of AT&T's products in addition to Directv might even make them suck less.


i read somewhere there not selling all of it only some of it. and i also read asian telephone and telegraph still wants the control over DTV. all of this speculation is getting interesting


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## n3ntj (Dec 18, 2006)

slice1900 said:


> What investment is required to keep Directv going at this point? They don't need new satellites, and other than minor tweaks (i.e. HR44 to HR54 / C51 to C61 type of changes) they don't need new hardware. Probably the customer losses mean they can just recycle existing hardware and will have little need to manufacture anything new anyway. It is just ongoing expenses for managing the existing fleet, billing, customer service and so forth.
> 
> Having CSRs that aren't trying to handle all of AT&T's products in addition to Directv might even make them suck less.


I would think the cost of programming (carriage contracts) is the biggest expense that D*/ATT has.


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## slice1900 (Feb 14, 2013)

harsh said:


> Programming costs for one.


Programming cost is not an investment, maybe you need to take an accounting course.


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## harsh (Jun 15, 2003)

slice1900 said:


> Programming cost is not an investment, maybe you need to take an accounting course.


AT&T has made it abundantly clear that the only "vesting" they're intending to do on behalf of DIRECTV is divesting.

I submit that NFSLT is an investment. It is also one that they may divest with a year.


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## NR4P (Jan 16, 2007)

slice1900 said:


> What investment is required to keep Directv going at this point? They don't need new satellites, and other than minor tweaks (i.e. HR44 to HR54 / C51 to C61 type of changes) they don't need new hardware. Probably the customer losses mean they can just recycle existing hardware and will have little need to manufacture anything new anyway. It is just ongoing expenses for managing the existing fleet, billing, customer service and so forth.
> 
> Having CSRs that aren't trying to handle all of AT&T's products in addition to Directv might even make them suck less.


Directv's equipment is old an outdated. The HS17, their last piece of HW was a good first step product for a server but has had no advancement. Have you tried to cable industry's competing services?

Xfinity's home server the X1 box is about 1/10 the size of the HS17, has HDMI output with 4K HDMI, and the integration of streaming (Netflix, Hulu, Amazon Prime, HBO Max IIRC) is sweet with the slick voice remote. I give them compliments on the channel guide.

Then the DTV app to download and go was and continues to be a disaster.

Directv's consumer product line is an iPhone 6 is in world of iPhone 12's.


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## compnurd (Apr 23, 2007)

NR4P said:


> Directv's equipment is old an outdated. The HS17, their last piece of HW was a good first step product for a server but has had no advancement. Have you tried to cable industry's competing services?
> 
> Xfinity's home server the X1 box is about 1/10 the size of the HS17, has HDMI output with 4K HDMI, and the integration of streaming (Netflix, Hulu, Amazon Prime, HBO Max IIRC) is sweet with the slick voice remote. I give them compliments on the channel guide.
> 
> ...


So which X1 Home server box because there have been like 4? And the first two were about the same size of a HR54

the XG1 also was not made to be a standalone server like the HS17.. It is more inline with the HR54

Here is a comparison

Last I knew also the CPU in the HS17 was faster then the XG1v4 CPU also

ANSWERED: Side by side Xfinity X1 TV Box Comparison - DVR vs. Non-DVR


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## harsh (Jun 15, 2003)

compnurd said:


> the XG1 also was not made to be a standalone server like the HS17.. It is more inline with the HR54


How many subscribers and how much wiring could they have served with just the addition of a built-in Genie 4K Mini?

A direct hardware comparison ignores the vastly superior Comcast On Demand library.

As with the HS17, Comcast has also bailed on DVR expansion and CallerID.


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## compnurd (Apr 23, 2007)

harsh said:


> How many subscribers and how much wiring could they have served with just the addition of a built-in Genie 4K Mini?
> 
> A direct hardware comparison ignores the vastly superior Comcast On Demand library.
> 
> As with the HS17, Comcast has also bailed on DVR expansion and CallerID.


Do you mean a 4K Server? Because there is a 4K Genie Mini

I don't think it would have changed much since most people just move there Genie to a room that was served with something else and get rid of that

the HS17 it doesn't matter. That goes somewhere then you can get 8 4K minis scattered around the house

People clamor about the Hopper supporting 4K while ignoring the 4K Joey doesn't support HDR


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## harsh (Jun 15, 2003)

The "addition of a built-in Genie 4K Mini" only makes sense in the context of the HS17. Making it modular would cost more than having a separate piece.


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## compnurd (Apr 23, 2007)

harsh said:


> The "addition of a built-in Genie 4K Mini" only makes sense in the context of the HS17. Making it modular would cost more than having a separate piece.


I fail to see how it only makes sense in the context of a HS17 when they were initially released to work with the HR44/54 before the HS17 was even a thought


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## slice1900 (Feb 14, 2013)

NR4P said:


> Directv's equipment is old an outdated. The HS17, their last piece of HW was a good first step product for a server but has had no advancement. Have you tried to cable industry's competing services?
> 
> Xfinity's home server the X1 box is about 1/10 the size of the HS17, has HDMI output with 4K HDMI, and the integration of streaming (Netflix, Hulu, Amazon Prime, HBO Max IIRC) is sweet with the slick voice remote. I give them compliments on the channel guide.
> 
> ...


The size of the HS17 is more about making it good for wifi than because they need it to be that big. Dropping HDMI from it means you can put it where it makes the most sense for wifi, rather than where your TV is (and in a cabinet under a TV in a corner of the house is the worst possible place for wifi coverage through the rest of the house)

Not integrating streaming stuff is an obvious choice when selling TV is all you do, versus cable companies that sell internet to the large majority of their TV customers. Still, that's just software, Directv could change their mind at any time without needing to replace the HS17 hardware.


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## harsh (Jun 15, 2003)

compnurd said:


> I fail to see how it only makes sense in the context of a HS17 when they were initially released to work with the HR44/54 before the HS17 was even a thought


The HRx4 (x>3) series DVRs already have the ability to drive a TV without a client so it doesn't make sense there. I would imagine it wouldn't take a huge investment to upgrade the HR54 to add 4K (just as it wouldn't cost much to build a 4K client into the HS17).

I wonder how many wireless Genie Minis DIRECTV has been installing and whether the access point feature is getting a lot of use.


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## NR4P (Jan 16, 2007)

compnurd said:


> So which X1 Home server box because there have been like 4? And the first two were about the same size of a HR54
> 
> the XG1 also was not made to be a standalone server like the HS17.. It is more inline with the HR54
> 
> ...


Yes I was referring to the XG1V4 by Xfinity and IIRC it is licensed to other Cable Co's. Bringing up the CPU whether it is faster or not, is a techie POV but not a consumer POV. I have tried both the V4 and HS17 or HR54's etc. The V4 is a nicer product. Changes channels just as fast as the HS17 or HR54 but the Guide and On-Demand blow away Directv products. It is a server like the HS17 but has the HDMI 4K with HDR output.

I have the HS17, its big and in general few want to see it. Having to have a C61K is crazy, that puppy is slow.

I have had Directv for 25 years but as a person with a professional lifetime in consumer electronics, they stopped innovating. They haven't kept up. And the evolution of GenieGo was a disaster and the quality of downloaded recordings is awful.


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## NR4P (Jan 16, 2007)

slice1900 said:


> The size of the HS17 is more about making it good for wifi than because they need it to be that big. Dropping HDMI from it means you can put it where it makes the most sense for wifi, rather than where your TV is (and in a cabinet under a TV in a corner of the house is the worst possible place for wifi coverage through the rest of the house)
> 
> *Not integrating streaming stuff is an obvious choice when selling TV is all you do, *versus cable companies that sell internet to the large majority of their TV customers. Still, that's just software, Directv could change their mind at any time without needing to replace the HS17 hardware.


The US consumer has embraced streaming. For TV's and mobile products. Directv could change their mind at any time but seems to have decided to focus on ATT TV with development. My original point is that Directv hasn't introduced anything new in 2+ years and I suspect won't be any time soon. If a money fund company buys Directv, it won't get better. It will get worse, IMO.


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## codespy (Mar 30, 2006)

NR4P said:


> Yes I was referring to the XG1V4 by Xfinity and IIRC it is licensed to other Cable Co's. Bringing up the CPU whether it is faster or not, is a techie POV but not a consumer POV. I have tried both the V4 and HS17 or HR54's etc. The V4 is a nicer product. Changes channels just as fast as the HS17 or HR54 but the Guide and On-Demand blow away Directv products. It is a server like the HS17 but has the HDMI 4K with HDR output.
> 
> I have the HS17, its big and in general few want to see it. Having to have a C61K is crazy, that puppy is slow.
> 
> I have had Directv for 25 years but as a person with a professional lifetime in consumer electronics, they stopped innovating. They haven't kept up. And the evolution of GenieGo was a disaster and the quality of downloaded recordings is awful.


I liked the GenieGo in the past when we had the separate box. Although I agree with you the concept was kind of a joke, I could still add programs and download from any DVR, not just a Genie.

Since AT&T decided to take that feature away too (2016 I believe) and basically brick the $100 box I bought and just do GenieGo internally only for a Genie and no other DVR's, I really don't even use it anymore, except for maybe once or twice a year for two seconds. Sad. ☹


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## compnurd (Apr 23, 2007)

codespy said:


> I liked the GenieGo in the past when we had the separate box. Although I agree with you the concept was kind of a joke, I could still add programs and download from any DVR, not just a Genie.
> 
> Since AT&T decided to take that feature away too (2016 I believe) and basically brick the $100 box I bought and just do GenieGo internally only for a Genie and no other DVR's, I really don't even use it anymore, except for maybe once or twice a year for two seconds. Sad. ☹


The box was bricked before ATT rook over


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## codespy (Mar 30, 2006)

compnurd said:


> The box was bricked before ATT rook over


I'm not sure why you never find my posts credible. It was bricked on/about Nov. 10, 2016 well after ATT took over (summer 2015)- I had one, and remember that day. If you did a search, you would be able to verify that.


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## compnurd (Apr 23, 2007)

NR4P said:


> Yes I was referring to the XG1V4 by Xfinity and IIRC it is licensed to other Cable Co's. Bringing up the CPU whether it is faster or not, is a techie POV but not a consumer POV. I have tried both the V4 and HS17 or HR54's etc. The V4 is a nicer product. Changes channels just as fast as the HS17 or HR54 but the Guide and On-Demand blow away Directv products. It is a server like the HS17 but has the HDMI 4K with HDR output.
> 
> I have the HS17, its big and in general few want to see it. Having to have a C61K is crazy, that puppy is slow.
> 
> I have had Directv for 25 years but as a person with a professional lifetime in consumer electronics, they stopped innovating. They haven't kept up. And the evolution of GenieGo was a disaster and the quality of downloaded recordings is awful.


Its not a server like the HS17.. It is a server like the HR54... if it was like the HS17 it wouldnt have HDMI... I dont have any speed complaints about the C61K/HS17 Combo.. Speed wise the C61k moves just as fast as say a Tivo Mini Vox..

Size wise.. my HS17 is in my basement where no one see's it.. it is perfect. Now I do agree with you the GUI sucks... The GUI on the ATT Osprey box is actually pretty good and I dont see any reason that could not make that work on the Genie platform.. Or at least the HS17.. But that would require there software team putting in some effort I still think just removing the logos from the guide was a huge mistake


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## compnurd (Apr 23, 2007)

codespy said:


> I'm not sure why you never find my posts credible. It was bricked on/about Nov. 10, 2016 well after ATT took over (summer 2015)- I had one, and remember that day. If you did a search, you would be able to verify that.


Because they are usually wrong.. while ATT closed on the sale of Directv in Fall 2015.. Nothing changed for quite sometime.. While you are aware of the Genie Go being bricked in 11/16.. That decision was started in early that year as testing was being done on moving the platform to the Genie at the time


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## James Long (Apr 17, 2003)

AT&T's purchase closed in July of 2015.


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## lparsons21 (Mar 4, 2006)

NR4P said:


> The US consumer has embraced streaming. For TV's and mobile products. Directv could change their mind at any time but seems to have decided to focus on ATT TV with development. My original point is that Directv hasn't introduced anything new in 2+ years and I suspect won't be any time soon. If a money fund company buys Directv, it won't get better. It will get worse, IMO.


Yeah, the consumer is picking streaming more and more, but ATT is falling behind there too. Just like the DirecTV sat boxes, the ATT TV Osprey box hasn't had any real improvements or changes to it since it first came out a couple years ago.

And coupled with that, the subscription offerings haven't been rejiggered much either in that same time period. IOW, from all appearances ATT's video products are in maintenance mode other than HBO Max.


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## Phil T (Mar 25, 2002)

NR4P said:


> Yes I was referring to the XG1V4 by Xfinity and IIRC it is licensed to other Cable Co's. Bringing up the CPU whether it is faster or not, is a techie POV but not a consumer POV. I have tried both the V4 and HS17 or HR54's etc. The V4 is a nicer product. Changes channels just as fast as the HS17 or HR54 but the Guide and On-Demand blow away Directv products. It is a server like the HS17 but has the HDMI 4K with HDR output.
> 
> I have the HS17, its big and in general few want to see it. Having to have a C61K is crazy, that puppy is slow.
> 
> I have had Directv for 25 years but as a person with a professional lifetime in consumer electronics, they stopped innovating. They haven't kept up. And the evolution of GenieGo was a disaster and the quality of downloaded recordings is awful.


I had satellite TV, Both Dish and DirecTV for 23 years before switching back to cable in 2017. Satellite was innovative, alway trying new things and cheeper then cable for many years. It was also fun when you could install your own equipment. Then it began getting complicated with multiple LNB's, switches and satellites. The networks, locals and programmers did everything they could to jack up prices to the point there was no advantage over cable any more. Even to the point that self installation was not allowed.

The AT&T purchase of DirecTV brought a new level of low with offshore customer service, worse than Comcast!

Any advantage satellite had over cable was lost. As I get older I have no desire to go outside on a 20 degree day to brush snow off a dish anymore.

I have Comcast/Xfinity and the XG1v4 and Tivo's. The few interactions I have with Comcast have been fine and I always have the option of face to face interaction at their storefronts. The Tivo's were great for a couple of years but then they lost their way also. Pre-roll ads on recordings and a clutter filled guide, no more on demand and Apps that don't work. I downgraded them to the version T3 software and just use them in spare rooms now.

The XG1v4 has been stable and has good picture quality on both HD and 4K. The Apps work well and I get a discount by having a double play (internet) package. I also have a Roku and Apple TV for apps that the XG1v4 doesn't support, which I believe is Disney+ and HBO Max at this time.


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## techguy88 (Mar 19, 2015)

Phil T said:


> The AT&T purchase of DirecTV brought a new level of low with offshore customer service, worse than Comcast!


Move to an area operated by Altice USA (Optimum or Suddenlink will do) and then you will know truly horrible customer service. So horrible in fact you would consider AT&T/DirecTV and Comcast the gold standard in customer care. I know from living in a Suddenlink area then Comcast then an Armstrong area w/DirecTV.


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## compnurd (Apr 23, 2007)

techguy88 said:


> Move to an area operated by Altice USA (Optimum or Suddenlink will do) and then you will know truly horrible customer service. So horrible in fact you would consider AT&T/DirecTV and Comcast the gold standard in customer care. I know from living in a Suddenlink area then Comcast then an Armstrong area w/DirecTV.


Yeh Altice and Comcast are bad. Hello Verizon was a **** show also for the 10 months I had Fios


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## glrush (Jun 29, 2002)

From the WSJ this morning., but behind a paywall:

AT&T Enters Late Stage of DirecTV Auction, Fielding Offers Above $15 Billion - WSJ

From the article..."The auction is in a late stage and should the company reach a deal with one of the suitors, it could be completed by early next year."


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## GekkoDBS (Dec 5, 2015)

techguy88 said:


> Move to an area operated by Altice USA (Optimum or Suddenlink will do) and then you will know truly horrible customer service. So horrible in fact you would consider AT&T/DirecTV and Comcast the gold standard in customer care. I know from living in a Suddenlink area then Comcast then an Armstrong area w/DirecTV.


The bad thing about Altice and Optimum online is that the customer service reps actively lie, small example, you don't need an expensive high speed internet package, you ask for the lowest tier, they tell you it is not available, that is one of many lies I've heard from them, I've never encountered so many lies from a customer service team, they are the worst I've seen.

The lies were there before Altice bought Optimum online.

AT&T DirecTV Bids Valuing Satcaster At Over $15 Billion - Report - Deadline

Can someone explain what would be the implications if one of the groups mentioned in the article purchased Directv, I understand nobody here can predict the future but what would be the logical ending if such a deal was pulled off? What would the group do, would they run the company themselves or is this some sort of a way for an established media company to take over?


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## slice1900 (Feb 14, 2013)

If a SPAC takes it over as rumored then it could have two possible goals.

One, a short term project to stabilize/fix the business (not having headlines about how many customers are leaving every quarter would be a good start) to increase its value then take it public (i.e. an IPO)

Two, operate the business for the long term sort of like a bond until it is no longer profitable or on the verge of being no longer profitable, then see if they can find a buyer who sees more value in it than they do and if not shut it down.

AT&T will have made somewhere between $20 and $25 billion in profit from Directv during the time they've owned if it is sold in the first half of next year. That would mean a loss at sale of between $10 and $15 billion - or possibly more depending on the amount of debt it held at the time they bought it and how much debt it holds at the time of sale. They also benefited to the tune of several billion in cheaper carriage rights for Uverse TV. Since AT&T will be a majority owner of this SPAC (but not have operational control) they may end up losing more or less than that depending on how things turn out for it.

But I guess AT&T is getting some things they really want out of this: a big one is that they're unloading Uverse TV which may be the first step to selling off their copper lines in areas where they don't plan to upgrade to fiber. I assume keeping majority ownership of the SPAC is to allow them to have AT&T TV included in carriage negotiations so they continue to benefit from the size/negotiating power of Directv+Uverse TV which was one of their original reasons for buying it.

The real question Directv customers want to know is "will this make Directv better than it was under AT&T or worse?" We can't know for sure, but it would be hard for them to run it worse than AT&T... The "stabilize/fix the business to increase its value" option might be better in the short term, but after it goes IPO it is a crapshoot what happens. Operating it for the long term like a bond might be the best long term outcome, I don't see any reason it couldn't remain profitable throughout the 2020s. Hard to see any DBS satellite company having much success beyond that, once 5G has filled in almost all the country and SpaceX etc. has filled in the little gaps that remain.


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## harsh (Jun 15, 2003)

slice1900 said:


> AT&T will have made somewhere between $20 and $25 billion in profit from Directv during the time they've owned if it is sold in the first half of next year.


I know how much you like to cite these numbers, but did you consider that DIRECTV came with about $18.1 billion in debt in addition to the $49 billion purchase? Unless one of these "suitors" makes an offer that makes it look like the whole of DIRECTV is worth at least $45.1 billion, AT&T will have lost significant value and not chipped away at their $150+ billion in paper debt. Any wireless customers they gained as part of bundling deals and any value associated with what AT&T retains would have to be worth a whole lot of money.

What can a standalone DIRECTV satellite (and modest uptake streaming service?) do to stem the tide of those seeking to escape a $130+/month TV bill? Walking away from NFLST isn't going to save a lot of money and would certainly not entice the pub/tavern crowd to come back.


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## poppo (Oct 10, 2006)

slice1900 said:


> ... *once 5G has filled in almost all the country* and SpaceX etc. has filled in the little gaps that remain.


I still don't know why people think 5G is going to be the solution for rural people. We have a new AT&T 5G cell tower here and unless you are within just a couple miles of it, the speeds drop off quickly. And I don't see putting up millions upon millions of repeaters or whatever happening anytime in my lifetime.

What's worse is that I live about 2 miles (line of sight) from that tower and AT&T says I can not get their FWA. My in-laws who live just 1/4 mile close to the tower can. Go figure.


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## slice1900 (Feb 14, 2013)

harsh said:


> I know how much you like to cite these numbers, but did you consider that DIRECTV came with about $18.1 billion in debt in addition to the $49 billion purchase? Unless one of these "suitors" makes an offer that makes it look like the whole of DIRECTV is worth at least $45.1 billion, AT&T will have lost significant value and not chipped away at their $150+ billion in paper debt. Any wireless customers they gained as part of bundling deals and any value associated with what AT&T retains would have to be worth a whole lot of money.
> 
> What can a standalone DIRECTV satellite (and modest uptake streaming service?) do to stem the tide of those seeking to escape a $130+/month TV bill? Walking away from NFLST isn't going to save a lot of money and would certainly not entice the pub/tavern crowd to come back.


If you read the article you'd see the $15 billion being talked about includes all of Directv's current debt (but doesn't say how much that debt is)


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## Marvin (Sep 14, 2003)

poppo said:


> I still don't know why people think 5G is going to be the solution for rural people. We have a new 5G cell tower here and unless you are within just a couple miles of it, the speeds drop off quickly. And I don't see putting up millions upon millions of repeaters or whatever happening anytime in my lifetime.


Rural America is going to have to be happy with paying $100 a month for Starlink. Which might be better than what I have to pay for really slow 4g. my guess is if enough people use Starlink it will end up being just as bad or worse capped to make it useless for video streaming.


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## harsh (Jun 15, 2003)

slice1900 said:


> If you read the article you'd see the $15 billion being talked about includes all of Directv's current debt (but doesn't say how much that debt is)


"All of DIRECTV's debt" may well add up to more than $15 billion given that it started at $18.1 billion so I'm not sure that's an appropriate interpretation.

AT&T only recently began retiring some of its debt and the Deadline article infers that they've only erased $1 billion of the $150 million that they had at the end of 2019.


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## harsh (Jun 15, 2003)

Marvin said:


> Rural America is going to have to be happy with paying $100 a month for Starlink. Which might be better than what I have to pay for really slow 4g. my guess is if enough people use Starlink it will end up being just as bad or worse capped to make it useless for video streaming.


Starlink appears to be tardy in reporting results at this point. Starlink will have caps, it just remains to be seen how oppressive they are.

There's also likely to be some manner of service commitment that I would hesitate to enter into until I've seen whether the system will ever be able to keep up with demand. Promising how ever many launches a year has many dependencies.


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## James Long (Apr 17, 2003)

harsh said:


> "All of DIRECTV's debt" may well add up to more than $15 billion given that it started at $18.1 billion so I'm not sure that's an appropriate interpretation.


The interpretation is that the new buyer will pay $15 billion AND assume the $18.1 billion in debt to pay the creditors. Effectively paying $33.1 billion ... but the $18.1 billion would be paid to the creditors based on the normal schedule.


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## harsh (Jun 15, 2003)

James Long said:


> The interpretation is that the new buyer will pay $15 billion AND assume the $18.1 billion in debt to pay the creditors.


Which is why I think it odd that the articles don't say "$15 billion and debt". That the amount of the DIRECTV/Uverse debt may not be known shouldn't matter.


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## slice1900 (Feb 14, 2013)

harsh said:


> "All of DIRECTV's debt" may well add up to more than $15 billion given that it started at $18.1 billion so I'm not sure that's an appropriate interpretation.
> 
> AT&T only recently began retiring some of its debt and the Deadline article infers that they've only erased $1 billion of the $150 million that they had at the end of 2019.


The price is $15 billion AND assumption of Directv's debt. Just like AT&T's original purchase price was $49 billion AND assumption of Directv's debt. I know you are always trying to paint Directv in the worst possible light, but you can at least not be dishonest when doing so.


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## poppo (Oct 10, 2006)

harsh said:


> Starlink appears to be tardy in reporting results at this point. Starlink will have caps, it just remains to be seen how oppressive they are.


I never heard of them and had to Google it. From their home page:
"To see if your location is eligible for participation in Starlink's Better Than Nothing Beta program,
enter your email and service address below."

'Better than nothing' does not instill a lot of confidence.


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## Bob Coxner (Dec 28, 2005)

poppo said:


> I never heard of them and had to Google it. From their home page:
> "To see if your location is eligible for participation in Starlink's Better Than Nothing Beta program,
> enter your email and service address below."
> 
> 'Better than nothing' does not instill a lot of confidence.


They're currently only taking customers in the northern part of the US and in Canada. Reviews have actually been very good.

SpaceX Starlink has some hiccups as expected, but users are impressed


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## krel (Mar 20, 2013)

With att running dtv no way would I buy dtv as its a sinking ship. Outdated boxes the guide sucks the high cost of programming. And all of the home shopping channels and religion channels and the pillow sex toys channels dtv is not worth it anymore. Att paid 68 billion i belive and is now seeking 15 billion great business model


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## Davenlr (Sep 16, 2006)

DirecTv could be a great business if they got bought by someone who actually watches TV, and doesnt work for AT&T. Purchase the same equipment used currently to "upconvert" sports to 4K, and put all the major channels in 4K with Dolby Atmos. There would be quite a market for an all 4K service. There would be no competition at all, except perhaps streaming platforms, and I don't see them using the bandwidth it would take to do that.


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## harsh (Jun 15, 2003)

slice1900 said:


> I know you are always trying to paint Directv in the worst possible light, but you can at least not be dishonest when doing so.


DIRECTV probably didn't put themselves in the position of being a non-core element of AT&T. That said, DIRECTV won't be harmless for the experience and that doesn't even contemplate the millions of subscribers lost.


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## compnurd (Apr 23, 2007)

Davenlr said:


> DirecTv could be a great business if they got bought by someone who actually watches TV, and doesnt work for AT&T. Purchase the same equipment used currently to "upconvert" sports to 4K, and put all the major channels in 4K with Dolby Atmos. There would be quite a market for an all 4K service. There would be no competition at all, except perhaps streaming platforms, and I don't see them using the bandwidth it would take to do that.


As great as that would be. They don't have the bandwidth for that


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## James Long (Apr 17, 2003)

harsh said:


> DIRECTV probably didn't put themselves in the position of being a non-core element of AT&T. That said, DIRECTV won't be harmless for the experience and that doesn't even contemplate the millions of subscribers lost.


Who is DIRECTV? The former owners certainly are responsible for choosing to sell DIRECTV to a much larger company. But blaming the former owners does not seem productive.

The minions sold to DIRECTV don't have a lot of say in how the corporate bosses tell them to run the service. It doesn't seem to blame underlings that didn't decide to sell the company and now operate under control of their corporate masters (if they choose to remain).

From the AT&T perspective they spent billions of dollars investing in DIRECTV when they should have known which way the marketplace was headed. It was a stated goal when the offer was made for DIRECTV that they wanted the customer count to boost their negotiating power for UVERSE channels and the then future OTT offering. And they wanted NFL Sunday Ticket. The negotiating power did not pan out the way they hoped and Sunday Ticket remained a DIRECTV exclusive (not able to be spread over to UVERSE or OTT). An error in predicting the direction the industry was headed? Probably.

But pointing fingers doesn't solve any problems. They cannot go back and change past decisions. AT&T cannot undo the billions of dollars of investment made in DIRECTV and the other entertainment division properties the "bankers" have spoken out against. All they can do is not make the situation worse.


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## GekkoDBS (Dec 5, 2015)

James Long said:


> Who is DIRECTV? The former owners certainly are responsible for choosing to sell DIRECTV to a much larger company. But blaming the former owners does not seem productive.
> 
> The minions sold to DIRECTV don't have a lot of say in how the corporate bosses tell them to run the service. It doesn't seem to blame underlings that didn't decide to sell the company and now operate under control of their corporate masters (if they choose to remain).
> 
> ...


I know the TVAnswerMan site is frowned upon as a reliable source of news but he has some information about the Apollo Group, if they actually make the purchase it seems like it could be part of a larger strategy to make something of Directv, a former Time Warner CEO sits on their board or has some high level position with them, they own Redbox and just recently I saw a headline that they were trying to buy AMC theaters, I will try to find the AnswerMan link.

Update: AT&T May Soon Have DIRECTV Buyer: Report - The TV Answer Man!


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## cypherx (Aug 27, 2010)

Is this why AT&T is not releasing an HBO Max app on the Genie? Because they are going to unload it anyway so why invest the time?


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## lparsons21 (Mar 4, 2006)

cypherx said:


> Is this why AT&T is not releasing an HBO Max app on the Genie? Because they are going to unload it anyway so why invest the time?


I've read no stories indicating ATT is going to unload HBO Max.


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## compnurd (Apr 23, 2007)

cypherx said:


> Is this why AT&T is not releasing an HBO Max app on the Genie? Because they are going to unload it anyway so why invest the time?


They aren't releasing an app on the genie because it can't handle it. The software wasn't built to handle apps like that


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## James Long (Apr 17, 2003)

GordonGekko said:


> I know the TVAnswerMan site is frowned upon as a reliable source of news ...


The biggest problem is that no "media outlet" should be the "source". The article you linked used the WSJ as the source - basically, he's rewording the WSJ article. I prefer articles with actual sources ... preferably named.

Old joke: Two white house reporters are shooting the breeze speculating (with no source) about what the president will do next. They both walk away and write a story "sources in the white house are saying ...". That is how I feel about third hand unsourced news stories. Real reporting has real sources.


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## cypherx (Aug 27, 2010)

compnurd said:


> They aren't releasing an app on the genie because it can't handle it. The software wasn't built to handle apps like that


Sure it can. I have no issue with Music Choice or even other IP delivered content (cheddar). Heck, they could make a VOD page mimic the look of HBO Max and different selections just load different pages, and when you play a title it can just pull it over IP like VOD or the IP channels.


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## GekkoDBS (Dec 5, 2015)

James Long said:


> The biggest problem is that no "media outlet" should be the "source". The article you linked used the WSJ as the source - basically, he's rewording the WSJ article. I prefer articles with actual sources ... preferably named.
> 
> Old joke: Two white house reporters are shooting the breeze speculating (with no source) about what the president will do next. They both walk away and write a story "sources in the white house are saying ...". That is how I feel about third hand unsourced news stories. Real reporting has real sources.


That was not my point, my point was that TVAnswerMan is not the equivalent of CNBC or the WSJ, in this instance he was just relaying some background on the Apollo Group, the context was just because the messenger is not reputable, don't dismiss the facts.

I would have linked to the WSJ article but I could not read it because of a paywall. And yeah, I agree with you, I think most people agree, I wish more sources were named, I always view White House inside stories in a certain manner, I don't take any single inside story as gospel, however if a pattern emerges, if a certain narrative keeps getting repeated by senior White House aides, couple that with actual quotes from departing people or cabinet members that repeat the same theme, I still can't take it as the de facto truth but I think to myself, there is a good chance this is true.

To each his own in that regard.


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## James Long (Apr 17, 2003)

The discussion over the alleged impending sale of "DIRECTV" has been ongoing for years. "Facts" have been at a minimum. Most of the "facts" available were introduced at the beginning of the claim that AT&T was being pressured to sell "DIRECTV" by certain investors. There have been very few facts introduced - only rhetoric. And unfortunately even "reputable" reporters (who should never be considered sources) such as the WSJ have fallen into the trap of "I read it on the Internet so it must be true". Yes, even the brick and mortar kings of media can fall in to the trap of repeating someone else's reporting. 

We are in a new media world where writers are paid as "content creators" ... if you don't create content, you don't get paid. Write something that gets views and you'll get paid. Write something that gets a lot of views and you'll get paid more. Many sites further down the chain have turned in to click bait because the goal of new media is not accuracy or education but getting views and click throughs.

BTW: I put "DIRECTV" in quotes because when the story started it focused on selling the satellite operation separate from the other entertainment operations at AT&T. In the time since the initial story AT&T has expanded their entertainment division and those pushing for the sale of the satellite operation have also pushed to divest those newly purchased assets. The question of what is actually up for sale has only been answered by anonymous sources and speculation.

I would like to see DIRECTV satellite broken out in the quarterly reports. That way everyone could see how profitable the satellite company actually is. But being part of the mega corporation their numbers are buried in Entertainment Division results. Having one category for "Premium TV" that combines satellite, uverse and OTT "AT&T TV" separate from the "AT&T Now" product hides the subscriber loss - but it also can hide the lack of growth of premium AT&T TV. Any profitability DIRECTV satellite has is lost in the numbers reported.

I can't say that AT&T will not make the mistake of selling their satellite operations or even a larger portion of the Entertainment Division - but I can say that it would be a mistake. The "half sale" currently being discussed seems like they want the best of both worlds. Keep the profits, sell the losses. It sounds half baked.


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## harsh (Jun 15, 2003)

James Long said:


> Keep the profits, sell the losses. It sounds half baked.


I think we'll see fairly soon what the truth is and I imagine it will be a little less ridiculous than it currently appears.

I don't think I'll ever understand the idea of including debt (or a share of the debt) in a spin-off.


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## GekkoDBS (Dec 5, 2015)

harsh said:


> I think we'll see fairly soon what the truth is and I imagine it will be a little less ridiculous than it currently appears.
> 
> I don't think I'll ever understand the idea of including debt (or a share of the debt) in a spin-off.


Yes but has anyone here worked in the mergers and acquisitions side of things, if you went by many of the posts I've read here from 2020, many of them laughed off the possibility that ATT was even considering a sale, who among us has the sort of experience that could flesh out the pros and cons of selling and anything regarding debt, spinoffs, but heck if we took a Business 101 course, Chapter 1 example of AT&T losing Directv subscribers/the future of streaming/the lack of focus on the Directv product, would not Chapter 1 cite this situation as the prime example of when a company should spin off such a division?

It does not mean that if ATT spins off Directv it will turn out to be the correct decision, but are we to believe they have not run the numbers top and bottom, five million times to try to juice out the best financial position they possibly can with the Directv side of things? Is ATT bereft of financial wizards that run the situations through multiple algorithms?

It is great to read opinions but 99 if not 100 percent of the people posting here are just outside tourists, now if Jack Welch is reading this and can chime in, that would be interesting, can one of us tyros crack the code and nail down the perfect business strategy that ATT should execute, of course, but beyond a lucky intuitive thought, it would be helpful if an amateur could explain the concrete metrics as to why or why not ATT should do XYZ with Directv, do that and end up right, that would be an impressive feat.


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## jal (Mar 3, 2005)

Very insightful points. It raises this question: Is Directv technologically obsolete from a profit perspective vs streaming, or has AT&T's management handled Directv so poorly by failing to invest in it, or both?


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## makaiguy (Sep 24, 2007)

harsh said:


> .
> 
> I don't think I'll ever understand the idea of including debt (or a share of the debt) in a spin-off.


If you were trying to sell something, you'd want to sell the asset but keep the debt?


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## James Long (Apr 17, 2003)

makaiguy said:


> If you were trying to sell something, you'd want to sell the asset but keep the debt?


I believe most people think more simply ... If I sell my house I pay off my mortgage - in full. The new owner may or may not have debt (depending on if they had to borrow to buy the house) but my mortgage is gone. (If I sell my house for less than I owe I would still owe the remainder of my mortgage.)

Purchasing a company is assuming the company's assets and obligations - including debt. If the lenders are willing to allow the obligation to be transferred. Taking over the payments for the debts while paying the selling company something for their equity. The new owners would also assume other obligations such as contracts and agreements (including obligations to customers).

Getting from the mindset of selling something and cashing out to the mindset of transferring obligations can take a moment.

So - what is AT&T selling for $15 billion? I expect that they are including the debt obligations in the sale - give us $15 billion and assume all obligations. But it sounds like it will not be a 100% spin off the way it was the previous times DIRECTV was sold. Not a simple sale.


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## GekkoDBS (Dec 5, 2015)

James Long said:


> The biggest problem is that no "media outlet" should be the "source". The article you linked used the WSJ as the source - basically, he's rewording the WSJ article. I prefer articles with actual sources ... preferably named.
> 
> Old joke: Two white house reporters are shooting the breeze speculating (with no source) about what the president will do next. They both walk away and write a story "sources in the white house are saying ...". That is how I feel about third hand unsourced news stories. Real reporting has real sources.


So here is an example of dubious sources, the article quotes "people familiar with the situation", that could be anybody, that could be CNBC's Jim Cramer: AT&T is looking at selling part of DirecTV to private equity buyers


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## James Long (Apr 17, 2003)

Yep ... I know a guy named James and a guy named Gordon who are familiar with the situation. And a few unnamed sources in this thread as well.


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## krel (Mar 20, 2013)

they should just off load DTV all together and be done with it.. att already wrecked it enough. between streaming services and att horrible CSR'S and price hikes DTV is a sinking ship. no way would i even go back to DTV if att has control over it


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## slice1900 (Feb 14, 2013)

James Long said:


> So - what is AT&T selling for $15 billion? I expect that they are including the debt obligations in the sale - give us $15 billion and assume all obligations. But it sounds like it will not be a 100% spin off the way it was the previous times DIRECTV was sold. Not a simple sale.


The articles I read about this confirmed what you expect - the sale price includes all obligations including debt.

Since the buyer will assume operational control it is a simple sale. The new Directv will be an independent entity, with AT&T as a majority owner of that entity and the buyer/operator as a minority owner.

I guess it is a good thing AT&T never managed to get everyone converted over from Directv to AT&T billing. Since Directv's billing system still exists they won't have to build a new one from scratch, and it should be a lot smoother to migrate those on AT&T billing over to Directv than it was the other way around since Directv's billing system was built for Directv - though I wonder how it will work for the Uverse TV customers who will also be coming along for the ride getting shoehorned into Directv's billing system.


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## James Long (Apr 17, 2003)

So are you are suggesting that this is a split of services ... DIRECTV satellite being sold separately with AT&T TV retained? Does AT&T Now stay on the non-spinoff side of the transaction? That is what breaks the simplicity of the sale.

Contracts written with content providers that covered all services now expected to cover separate services offered by two different companies? AT&T retaining a majority stake providing some sort of permission to negotiate as one company while being controlled separately? A minority owner given operational control over some portion of the current contracted services - but who handles carriage contracts? Does AT&T|DIRECTV go through a cycle of contract renewals where the contracts are split (DIRECTV adding, renewing and dropping content separately from whatever AT&T retains)? Splitting the contracts loses the negotiating power that AT&T wanted to gain by purchasing DIRECTV. Perhaps they think they will do better without the (13 million? 14 million?) DIRECTV satellite customers bogging AT&T|DIRECTV down?

The only thing good I can say about the spin off is that it will finally reveal the actual health and value of DIRECTV satellite service. No responsible business would be bidding $15 billion plus debt if they did not believe they could turn a profit (even if that profit comes from reselling DIRECTV in a couple of years). Perhaps that is their true aim - to separate the profitable DIRECTV from the less profitable AT&T services. But with AT&T maintaining majority ownership I assume AT&T will want a majority of the profits.


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## krel (Mar 20, 2013)

slice1900 said:


> The articles I read about this confirmed what you expect - the sale price includes all obligations including debt.
> 
> Since the buyer will assume operational control it is a simple sale. The new Directv will be an independent entity, with AT&T as a majority owner of that entity and the buyer/operator as a minority owner.
> 
> I guess it is a good thing AT&T never managed to get everyone converted over from Directv to AT&T billing. Since Directv's billing system still exists they won't have to build a new one from scratch, and it should be a lot smoother to migrate those on AT&T billing over to Directv than it was the other way around since Directv's billing system was built for Directv - though I wonder how it will work for the Uverse TV customers who will also be coming along for the ride getting shoehorned into Directv's billing system.


where did you read the buyer will have operational control??? i read that AT&T still wants the control over DTV but is selling most of it off right now just to get debt off it's books. all speculation ofcourse... i am thinking that ATT is kinda hurting right now!!!


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## slice1900 (Feb 14, 2013)

James Long said:


> So are you are suggesting that this is a split of services ... DIRECTV satellite being sold separately with AT&T TV retained? Does AT&T Now stay on the non-spinoff side of the transaction? That is what breaks the simplicity of the sale.
> 
> Contracts written with content providers that covered all services now expected to cover separate services offered by two different companies? AT&T retaining a majority stake providing some sort of permission to negotiate as one company while being controlled separately? A minority owner given operational control over some portion of the current contracted services - but who handles carriage contracts? Does AT&T|DIRECTV go through a cycle of contract renewals where the contracts are split (DIRECTV adding, renewing and dropping content separately from whatever AT&T retains)? Splitting the contracts loses the negotiating power that AT&T wanted to gain by purchasing DIRECTV. Perhaps they think they will do better without the (13 million? 14 million?) DIRECTV satellite customers bogging AT&T|DIRECTV down


That's what I've read - AT&T wants to keep AT&T TV. I agree based on their record launching AT&T TV and Directv Now there's no reason they should believe those (or the streaming MVPD market as a whole) will ever be that successful, but I guess they still have the "triple play" mindset and feel they need a traditional TV product to offer.

I assume remaining majority owner of the spinoff is all about bringing AT&T TV along for the ride with the Directv/Uverse TV contracts for reasons of scale, and that they would have had their lawyers review to make sure this is within the letter of their existing contracts. Who knows, maybe this was the plan (or at least backup plan) all along and they took care to specifically add language to contracts to allow for this down the road.


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## James Long (Apr 17, 2003)

I believe AT&T's optimism when they purchased DIRECTV (over 20 million subscribers added to UVERSE's almost 6 million) did not play out. AT&T|DIRECTV has managed to lose 32% of the subscribers they had on merger day. The market changed - in a predictable way - but it changed. 17 million subscribers is better than four but I don't believe they ever got the negotiating power they thought they would get.








(The financials are probably better than the subscriber count but they are buried in "Entertainment Group" totals. The Group profit is about the same as DIRECTV made on it's own the year before the merger.)


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## codespy (Mar 30, 2006)

slice1900 said:


> The articles I read about this confirmed what you expect - the sale price includes all obligations including debt.
> 
> Since the buyer will assume operational control it is a simple sale. The new Directv will be an independent entity, with AT&T as a majority owner of that entity and the buyer/operator as a minority owner.
> 
> I guess it is a good thing AT&T never managed to get everyone converted over from Directv to AT&T billing. Since Directv's billing system still exists they won't have to build a new one from scratch, and it should be a lot smoother to migrate those on AT&T billing over to Directv than it was the other way around since Directv's billing system was built for Directv - though I wonder how it will work for the Uverse TV customers who will also be coming along for the ride getting shoehorned into Directv's billing system.


I didn't think about the billing aspect before, but that would be music to my ears if they went back to only legacy billing. I'm still on it, and I feel I have more control/functions on my account online than those morphed over to ATT billing.


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## krel (Mar 20, 2013)

codespy said:


> I didn't think about the billing aspect before, but that would be music to my ears if they went back to only legacy billing. I'm still on it, and I feel I have more control/functions on my account online than those morphed over to ATT billing.


Att billing is a PIA you can upgrade but not downgrade programming. It would be nice to have a full service online acct functions rather than having to call in waiting on hold forever and taking a chance of getting hung up on not to mention someone that knows what there doing


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## Davenlr (Sep 16, 2006)

krel said:


> having to call in waiting on hold forever and taking a chance of getting hung up on not to mention someone that knows what there doing


Can you not make changes at the AT&T store? We have like 5 of them around here.


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## krel (Mar 20, 2013)

Davenlr said:


> Can you not make changes at the AT&T store? We have like 5 of them around here.


I was always told to call dtv by my local att stores. So I dunno


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## b4pjoe (Nov 20, 2010)

What buyer, with at least half of a brain, would pay $15 billion plus assume the debt and still let AT&T be a majority owner? That is crazy talk right there.


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## krel (Mar 20, 2013)

b4pjoe said:


> What buyer, with at least half of a brain, would pay $15 billion plus assume the debt and still let AT&T be a majority owner? That is crazy talk right there.


i wouldn't want anything that att controls. looks like they screw everything up not just DTV


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## slice1900 (Feb 14, 2013)

b4pjoe said:


> What buyer, with at least half of a brain, would pay $15 billion plus assume the debt and still let AT&T be a majority owner? That is crazy talk right there.


The rumor says AT&T would keep majority ownership but NOT have operational control. Probably done via two share classes in the new 'Directv' entity.

Given that Directv is still generating about $4 billion a year in profit, a $15 billion price should reach payback in about five years, and profit thereafter.


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## harsh (Jun 15, 2003)

slice1900 said:


> Given that Directv is still generating about $4 billion a year in profit, a $15 billion price should reach payback in about five years, and profit thereafter.


Remember that whomever buys into this endeavor is only getting their portion of this profit (presumably in accordance with their share). Expecting more than $2 billion a year for a large minority stake (or a small majority stake) may be the best they could hope for. Include the portion of the debt that the suitor must assume ($9 billion give or take?) and the payback may go out 12-15 years or longer.

If the organization that operates DIRECTV (whether it is AT&T or the prospective buyer) doesn't right the ship quickly, the revenues will continue to fall as customers jump ship and with that, DIRECTV's purchasing power going forward.


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## James Long (Apr 17, 2003)

We don't know all of the details of the deal being offered. They could easily write a deal that would give the buyers more than their share based share of the profits (especially since they are apparently offering controlling shares to the buyer while maintaining a non-controlling majority share for AT&T).


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## krel (Mar 20, 2013)

AT&T, Just Take the Offer for DirecTV Already | The Motley Fool


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## slice1900 (Feb 14, 2013)

harsh said:


> Remember that whomever buys into this endeavor is only getting their portion of this profit (presumably in accordance with their share). Expecting more than $2 billion a year for a large minority stake (or a small majority stake) may be the best they could hope for. Include the portion of the debt that the suitor must assume ($9 billion give or take?) and the payback may go out 12-15 years or longer.


You really don't know the first thing about business or finance, do you?

The $15 billion is the valuation, i.e. what it would be priced at if 100% of the business was sold. AT&T will sell a minority, and therefore receive a check for only that portion of the $15 billion.


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## James Long (Apr 17, 2003)

slice1900 said:


> The $15 billion is the valuation, i.e. what it would be priced at if 100% of the business was sold. AT&T will sell a minority, and therefore receive a check for only that portion of the $15 billion.


If DIRECTV is only worth $15 billion in total then AT&T has really lost their shirts on the deal. Based on what I read, they were expecting to collect $15 billion for the portion they are selling. Which could be a good deal. (AT&T gains $15 billion in cash, loses $17? billion in debt and maintains an ownership interest worth ... $15-$20 billion?)

We will have to see what the actual deal turns out to be. If one is ever made.


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## krel (Mar 20, 2013)

Serves att right to loose there shirts. With the worst customer service I have ever experienced in my life along with the outrageous price hikes every year i blame that on the channel owners as well


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## harsh (Jun 15, 2003)

slice1900 said:


> You really don't know the first thing about business or finance, do you?


I know enough not to confuse the evaluation with revenue generating potential.


> The $15 billion is the valuation, i.e. what it would be priced at if 100% of the business was sold. AT&T will sell a minority, and therefore receive a check for only that portion of the $15 billion.


If the partner's bid is $15 billion (plus around half the $17 billion debt?), that pretty much has to be for whatever portion the partner gets, no?

That AT&T has only whittled down the debt from $18 billion to $17 billion in three years informs me that they aren't nearly as profitable as you've been asserting.


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## James Long (Apr 17, 2003)

harsh said:


> That AT&T has only whittled down the debt from $18 billion to $17 billion in three years informs me that they aren't nearly as profitable as you've been asserting.


Or AT&T has spent the DIRECTV profits on less profitable parts of the Entertainment Group.


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## slice1900 (Feb 14, 2013)

harsh said:


> That AT&T has only whittled down the debt from $18 billion to $17 billion in three years informs me that they aren't nearly as profitable as you've been asserting.


No, it means the debt is long term so they aren't paying down the principal much. In the first year you own your house a 30 year mortgage is paid down by less than 1%, does that mean you haven't been making nearly as much money as you claimed to the bank? No, it means you have been spending your income on other things, investing it elsewhere, or simply letting it sit in a saving account as an emergency fund.

Corporations don't have any more reason to pay down debt early than you do to pay down your mortgage early. Especially when interest rates are at record lows.


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## slice1900 (Feb 14, 2013)

James Long said:


> If DIRECTV is only worth $15 billion in total then AT&T has really lost their shirts on the deal. Based on what I read, they were expecting to collect $15 billion for the portion they are selling. Which could be a good deal. (AT&T gains $15 billion in cash, loses $17? billion in debt and maintains an ownership interest worth ... $15-$20 billion?)
> 
> We will have to see what the actual deal turns out to be. If one is ever made.


They paid $49 billion for it, but have collected over $20 billion in profit from it during the time they've owned it. In addition they've probably saved a few billion on lower carriage fees for their Uverse TV customers vs what they were paying before the acquisition. So like I said in my previous post, that means they've lost $10 to $15 billion on it if sold at a valuation of $15 billion. As I said at the time and always say about any large acquisition, acquisitions with a value over $10 billion almost never pay off. Doesn't matter what market you're talking about. Nvidia buying ARM being the most recent example of an acquisition I predict will not pay off.

AT&T won't get $15 billion in cash if they are only selling a minority share. For example, if they sold 40% of it they'd get $6 billion in cash. All $17 billion (or whatever) in debt would come off their books - that's what really matters to them rather than the cash infusion as Wall Street has been punishing them for their high debt ratio due to the Directv and Warner acquisitions. They'd maintain an ownership interest worth $9 billion, and collect 60% of future profits (around $2.4 billion a year at its current profitability)


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## harsh (Jun 15, 2003)

slice1900 said:


> Corporations don't have any more reason to pay down debt early than you do to pay down your mortgage early.


Given how much bad press AT&T's debt is getting, I would think they would want to address it out of concern for the stock value (that is already remarkably low).

Some debt is quite desirable, but too much debt reflects badly on a business if it doesn't have the cash to back it up.


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## slice1900 (Feb 14, 2013)

harsh said:


> Given how much bad press AT&T's debt is getting, I would think they would want to address it out of concern for the stock value (that is already remarkably low).
> 
> Some debt is quite desirable, but too much debt reflects badly on a business if it doesn't have the cash to back it up.


They will eliminate all the Directv debt with this deal, but also eliminate some equity so it probably won't help all that much with their debt/equity ratio. If they were worried about their debt they shouldn't have bought Time Warner right after buying Directv.


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## harsh (Jun 15, 2003)

slice1900 said:


> AT&T won't get $15 billion in cash if they are only selling a minority share.


That depends on whether your questionable assertion that AT&T is evaluating the entire DIRECTV operation at $15 billion or if the $15+ billion is the price of whatever share is being sold. This becomes even more important if the DIRECTV sale includes the Uverse customers or more as some of the reports have suggested.

It is hard to believe (though we ultimately find that it is true) that DIRECTV is worth less than a third of what it was when AT&T took over. AT&T has only lost 1/3rd of the customer base since the takeover if my math is right and 2/3rds of the purchase price would be a more than double the bid.


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## harsh (Jun 15, 2003)

slice1900 said:


> If they were worried about their debt they shouldn't have bought Time Warner right after buying Directv.


They arguably shouldn't have purchased DIRECTV either but the were going full Ferengi.


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## James Long (Apr 17, 2003)

slice1900 said:


> AT&T won't get $15 billion in cash if they are only selling a minority share.


They will if the buyer is willing.

As stated: We will have to see what the actual deal turns out to be. If one is ever made.


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## krel (Mar 20, 2013)

hopefully once it's sold off. whoever gets it gets better CSR'S!!!!


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## krel (Mar 20, 2013)

James Long said:


> They will if the buyer is willing.
> 
> As stated: We will have to see what the actual deal turns out to be. If one is ever made.


wasn't DTV going broke before att bought them out i heard they were???? all speculation...


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## James Long (Apr 17, 2003)

krel said:


> wasn't DTV going broke before att bought them out i heard they were???? all speculation...


Nope. A very profitable business with billions in revenue. They had debt, but they could have paid off all the debt and still had money.


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## krel (Mar 20, 2013)

James Long said:


> Nope. A very profitable business with billions in revenue. They had debt, but they could have paid off all the debt and still had money.


just think what a big dinosaur DTV is going to be if starlink takes off like people think it will. as att has always gotten a bad rap for rual areas


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## harsh (Jun 15, 2003)

krel said:


> just think what a big dinosaur DTV is going to be if starlink takes off like people think it will. as att has always gotten a bad rap for rual areas


Just imagine how disappointed the Starlink hopeful are going to be if it doesn't perform the way they hoped and/or the data caps make it unsuitable for streaming. There are many variables and most of them will probably not be favorable.

Testing results from a few hundred well-informed customers don't typically translate to thousands of normal (unconditionally demanding) customers.


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## glrush (Jun 29, 2002)

AT&T disappointed with offers for DirecTV (nypost.com)


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## harsh (Jun 15, 2003)

I'm still bothered by the "$15B including debt" phrase.


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## James Long (Apr 17, 2003)

glrush said:


> AT&T disappointed with offers for DirecTV (nypost.com)


"Sources said buyout proposals in the $15 billion range call for the purchaser to pay something close to $3.75 billion in exchange for a 49 percent stake in the company, with AT&T keeping a slightly larger sum to maintain a majority interest. The remaining $7.5 billion would be financed by new debt."

Must be new math.


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## harsh (Jun 15, 2003)

James Long said:


> Must be new math.


One should never confuse the Science of Mathematics with the High Art of Finance.

The fact that all of the numbers are nice even multiples of each other is suspicious.


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## b4pjoe (Nov 20, 2010)

harsh said:


> I'm still bothered by the "$15B including debt" phrase.


If you read the article it says "Other participants include Apollo Global Management, which, according to sources, offered less than $15 billion *including* debt". That to me sounds like they offered less then $15 billion for both DTV and the debt while earlier it was suggested AT&T was asking for bids over $15 billion for DirecTV plus taking DirecTV's debt.


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## James Long (Apr 17, 2003)

b4pjoe said:


> If you read the article it says "Other participants include Apollo Global Management, which, according to sources, offered less than $15 billion *including* debt".


More recent reports suggested the new bid was higher that $15 billion. But still not where AT&T wants it to be, hence the extension.

Just over five years ago AT&T purchased DirecTV for $49 billion, or $67.1 billion including debt. That deal was structured as DIRECTV shareholders receiving 1.892 shares of AT&T common stock, in addition to $28.50 in cash, for every share they held of DIRECTV. The thought that AT&T is now worth only $15 billion and some company could pay $3.75 billion for 49% of the company AND operational control? I can see why AT&T is holding out for a better deal ... a MUCH better deal.


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## lparsons21 (Mar 4, 2006)

While AT&T may be holding out for a better deal, I frankly don’t see one in the offing.


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## compnurd (Apr 23, 2007)

lparsons21 said:


> While AT&T may be holding out for a better deal, I frankly don't see one in the offing.


Agreed. There only shot is if at some point they stop the customer bleeding


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## harsh (Jun 15, 2003)

lparsons21 said:


> While AT&T may be holding out for a better deal, I frankly don't see one in the offing.


Further, the longer they wait, the longer any possible recovery will take. Every quarter represents more than $100 million in revenues gone.


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## glrush (Jun 29, 2002)

I don't know anything about accounting rules, but at some point doesn't AT&T have to write off the investment if the value has fallen so much ?


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## harsh (Jun 15, 2003)

glrush said:


> I don't know anything about accounting rules, but at some point doesn't AT&T have to write off the investment if the value has fallen so much ?


No.

If the asset is a piece of equipment, they could depreciate it. If the asset is an operating division, you take your lumps and push the losses around to offset gains elsewhere.

You write off things that have been entirely depreciated or otherwise gone to zero value so you don't have to keep track of them anymore.


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## krel (Mar 20, 2013)

lparsons21 said:


> While AT&T may be holding out for a better deal, I frankly don't see one in the offing.


Agree if att runs it i don't want anything to do with it.. the monthly rates sure don't compute in my mind with such crap csrs


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## compnurd (Apr 23, 2007)

krel said:


> Agree if att runs it i don't want anything to do with it.. the monthly rates sure don't compute in my mind with such crap csrs


Yup we got it.


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## Teetertotter (Jul 23, 2020)

The suspense in the possible AT&T DTV, etc. sale, is killing me.  But, I am hanging in there!


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## slice1900 (Feb 14, 2013)

harsh said:


> No.
> 
> If the asset is a piece of equipment, they could depreciate it. If the asset is an operating division, you take your lumps and push the losses around to offset gains elsewhere.
> 
> You write off things that have been entirely depreciated or otherwise gone to zero value so you don't have to keep track of them anymore.


There are mark to market rules, but determining the "market value" of a division is guesswork - at least until you put it on the block and see what the market thinks it is worth.

I'm sure they wouldn't have any objection to a massive writedown of Directv, they would net billions in tax refunds and future tax avoidance.


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## carlsbad_bolt_fan (May 18, 2004)

harsh said:


> No.
> 
> If the asset is a piece of equipment, they could depreciate it. If the asset is an operating division, you take your lumps and push the losses around to offset gains elsewhere.
> 
> You write off things that have been entirely depreciated or otherwise gone to zero value so you don't have to keep track of them anymore.


Might some entity be able to buy the assets of DirecTV and leave the debt/liabilities to AT&T?

That's what happened to the company I work for (in the craft beer space), but it definitely wasn't on the scale of DirecTV/AT&T.


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## harsh (Jun 15, 2003)

carlsbad_bolt_fan said:


> Might some entity be able to buy the assets of DirecTV and leave the debt/liabilities to AT&T?


This doesn't make much sense given that AT&T is only selling part of the operation. Partners pretty much have to share both the assets and the liabilities.


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## harsh (Jun 15, 2003)

slice1900 said:


> at least until you put it on the block and see what the market thinks it is worth.


It seems pretty clear that nobody has met the reserve in this auction.


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## krel (Mar 20, 2013)

harsh said:


> It seems pretty clear that nobody has met the reserve in this auction.


if AT&T still has some control over it who would want it. AT&T has been screwing up alot latley and not just with DTV either. i would not want anything that att has there hands in


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## glrush (Jun 29, 2002)

AT&T's Reluctance to Sell DIRECTV Is a Bright Red Flag (fool.com)


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## lparsons21 (Mar 4, 2006)

krel said:


> if AT&T still has some control over it who would want it. AT&T has been screwing up alot latley and not just with DTV either. i would not want anything that att has there hands in


Yep, ATT has not done a good job with TV on all fronts. Part of it is showing up with their lack of any developements on the hardware front for either DirecTV and ATT TV (and Now). Been quite some time since anything has been done with the DirecTV hardware, and the ATT Osprey box for streaming is almost exactly the same as when it shipped about 3 years ago.

Add in the declining subscriber count across all their TV offerings and I can't think of a good reason that anyone would want to buy a part interest in any of it. The first sign of a positive buy will be when someone comes along and says they want it all and get ATT out of it altogether IMO.


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## James Long (Apr 17, 2003)

I would love to see a complete and accurate breakdown of the past five years. Revenue, profit and subscribers for just DIRECTV - separated from the AT&T Entertainment Group. If DIRECTV is sold we should see current numbers. But the more I read the messier the situation seems to be. It sure is a lot easier when a business is sold as a complete unit.


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## harsh (Jun 15, 2003)

James Long said:


> But the more I read the messier the situation seems to be.


Given how little new information there is, everyone seems to be putting their spin on the NY Post stories. The newspaper version of reblogging.


> It sure is a lot easier when a business is sold as a complete unit.


Assuming that AT&T doesn't bundle DIRECTV with some other excess AT&T baggage. The Motley Fool article tries to pin down how many DIRECTV customers are left and that seems to be new but I'd like to see an ARPU figure as I expect it will be shockingly high.


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## James Long (Apr 17, 2003)

The Motley Fool article added enough research and insight to rise above the usual "reblogging". There was an earlier article where they also went into depth to give a reasonable approximation of the value of DIRECTV within AT&T - doing the math the same way I would do the math. Based on DISH Network's more open figures and other industry indicators for MVPDs.

Over the past five years DISH's ARPU has varied ending up slightly higher - $91.79 vs $87.91 when AT&T closed the deal with DIRECTV in 2015. DIRECTV's last reported ARPU was $109.93 ($22 higher than DISH). Assuming no drop in ARPU and that the current "Premium TV" number reflects no losses from the last reported UVERSE subscriber count that would work out to $4.4 billion per quarter in revenue. AT&T "Video" revenue was $6.9 billion last quarter. $4.4 billion would still be considerably less than the $6.7 billion DIRECTV last reported in 2Q 2015 ... but it would represent nearly 2/3rds of AT&T's Video revenue (and 44% of the Entertainment Group revenue).

DIRECTV was running around 20% profit before AT&T - at the time DISH was posting 10% profit. DISH's profits (as a percentage) are about the same so one could assume that DIRECTV was still running a decent profit ... 20% of $4.4 billion is $880 million - too high since the entire Entertainment Group only made $779 million last quarter. Unless the profits from DIRECTV are erasing losses from the rest of the group. To be kind lets say DIRECTV dropped to 10% profit and is only making $440 million per quarter.

So DIRECTV could be pulling $4.4 billion in revenue and $440 million in profit. That leaves $5.6 billion in revenue for the rest of the group making $339 million in profit. Perhaps AT&T would be better off keeping DIRECTV? They would probably report it as $7.8 billion in revenue and $559 million in profit - which looks slightly better. (Last quarter was bad for AT&T so it probably isn't the best one to use for the math.)

All that to say that if selling DIRECTV will help AT&T financially then they really have run the service into the ground.


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## krel (Mar 20, 2013)

James Long said:


> The Motley Fool article added enough research and insight to rise above the usual "reblogging". There was an earlier article where they also went into depth to give a reasonable approximation of the value of DIRECTV within AT&T - doing the math the same way I would do the math. Based on DISH Network's more open figures and other industry indicators for MVPDs.
> 
> Over the past five years DISH's ARPU has varied ending up slightly higher - $91.79 vs $87.91 when AT&T closed the deal with DIRECTV in 2015. DIRECTV's last reported ARPU was $109.93 ($22 higher than DISH). Assuming no drop in ARPU and that the current "Premium TV" number reflects no losses from the last reported UVERSE subscriber count that would work out to $4.4 billion per quarter in revenue. AT&T "Video" revenue was $6.9 billion last quarter. $4.4 billion would still be considerably less than the $6.7 billion DIRECTV last reported in 2Q 2015 ... but it would represent nearly 2/3rds of AT&T's Video revenue (and 44% of the Entertainment Group revenue).
> 
> ...


it seems that att runs everything into the ground not just DTV. they have so many complaints on them it's crazy. makes me wonder if they will be around in 10 years


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## krel (Mar 20, 2013)

lparsons21 said:


> Yep, ATT has not done a good job with TV on all fronts. Part of it is showing up with their lack of any developements on the hardware front for either DirecTV and ATT TV (and Now). Been quite some time since anything has been done with the DirecTV hardware, and the ATT Osprey box for streaming is almost exactly the same as when it shipped about 3 years ago.
> 
> Add in the declining subscriber count across all their TV offerings and I can't think of a good reason that anyone would want to buy a part interest in any of it. The first sign of a positive buy will be when someone comes along and says they want it all and get ATT out of it altogether IMO.


att needs to get out of the video business all together. att ran DTV into the ground no new hardware with innovative tech no more sports channels for the sports nuts piss poor CSR'S from another planet it's rare that you get one that knows what there doing. they don't disclose everything in the fine print wich most people don't read. as i lost my promo and deals 5 months after i lowered my package. that's when i told em to shove it when they said to bad i can't have my discounts back!!! the installers are just as bad as the CSR'S it took me 8 tries to get a genie 2 installed it got to the point to where i got a rep in america after multible phone calls of dealing with complete idiots. he made a note that if the last installer didn't install the genie 2 then they would be fired!!! i would never subscribe to there streaming service i will never subscribe to anything att again because of my horrific experience with them. the only way i would go back to directv is id att didn't own it and it had better CSR'S in america that are well trained like the old days of DTV. they should just offload all of DTV in my book its only gonna keep sinking. i'll stick with spectrum i can change my package if i want to and not loose the discounts and promo's CSR'S are in america and there well trained!!! getting rid of DTV was the best choice i made!!! i love DTV but it would have to be out of ATT hands before i ever thought of going back. i sure in the hell will never figure out what they call lease fee's that can go into hundreds of dollars fast for junk you don't own sounds like greed to me..


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## krel (Mar 20, 2013)

glrush said:


> AT&T's Reluctance to Sell DIRECTV Is a Bright Red Flag (fool.com)


i think they should just offload all of it and be done with it


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## harsh (Jun 15, 2003)

There's a great analysis on Seeking Alpha by Max Greve regarding what he sees as a likely purchase by Churchill IV.

He also leaves the door open to the deal including AT&T TV and Uverse.

https://seekingalpha.com/article/43...ound-directv-buyer-churchill-iv-is-overpaying


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