Is AT&T selling DirecTV? What a split could mean for viewers

Edward C. Baig

USA TODAY

Published 5:32 AM EDT Sep 20, 2019

As the question of whether AT&T really is considering breaking up with DirecTV remains without an answer, subscribers probably have their own questions. Namely, what about us? 

AT&T isn’t commenting on the report, which The Wall Street Journal attributed to unnamed “people familiar with the matter.” According to the WSJ, AT&T could spin DirecTV off into its own separate public company or merge its assets with satellite TV rival Dish Networks. 

If DirecTV were to actually hook up with Dish, it would elevate its rival to the No. 1 spot among satellite providers, with a combined subscriber base (including Dish-owned Sling TV) of about 30 million.

The odds of this union are no better than 50-50 with no guarantee the government will bless the marriage, says industry watcher Philip Swann, editor and publisher of TVAnswerman.com, who has followed DirecTV since its launch in 1994. 

But let’s play out the possibilities. 

Could subscribers see a price break? 

However this plays out, the reality is there’s nothing static about the state of today’s TV scene. Disney and Apple are poised to join a congested streaming and video-on-demand service market that includes Netflix, Hulu, CBS All Access and Amazon Prime.

AT&T is getting in the game, too, through the HBO Max service coming in the spring from the company’s WarnerMedia division.

Such competition could positively affect consumer pricing. Apple made a bold statement by announcing that it is giving away its upcoming Apple TV+ service for a year to customers who buy a new iPhone or other products.

The flipside of all these choices is that they may introduce a wave of confusion in terms of where to find what you want to watch.

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If that turns out to be football, DirecTV still has a crown jewel in NFL Sunday Ticket.

Such expanded options may not hit every viewer equally. 

“I think a Dish-DirecTV merger would reduce choice for rural residents, particularly those who don’t have access to high-speed internet service,” Swann says. “They now depend on DirecTV or Dish for basic and/or premium TV service.”

Why would they break up in the first place? 

The landscape for TV viewing has changed quite a bit since AT&T acquired DirecTV in 2015 in a deal valued at $67 billion. A wave of streaming services and cord-cutting caused some static, even when giving customers unprecedented viewing options.

DirecTV has lost about 2 million customers during that span, and “the continued subscriber losses, coupled with outside calls for change, “will force AT&T to take some action,” Swann says. 

Though cord-cutting is most definitely a factor, Swann also points to complaints surrounding the company’s customer service and price hikes. AT&T barely made a dent with its DirecTV Now live TV service for phones, which was renamed AT&T TV Now in July.

In a pending class-action complaint, it’s alleged that AT&T pushed sales reps to create fake DirecTV Now accounts to juice subscriber numbers, which AT&T vigorously denies. 

“We plan to fight these baseless claims in court,” the company said in a statement.

Though The Wall Street Journal’s story didn’t rule out DirecTV staying put – sources told CNBC that AT&T isn’t focused on getting rid of it – the possibility of a split certainly looms, especially while AT&T is under pressure from activist investors that want the company to focus on its core business and the rollout of next-generation 5G wireless networks.

How will the plot turn? As they’ve been saying in TV land for years, stay tuned.

Email: ebaig@usatoday.com; Follow @edbaig on Twitter

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