AT&T eats a $15.5 billion impairment cost as DirecTV debacle continues

A man with an umbrella walking past a building with an AT&T logo.

Enlarge / A person walks with an umbrella outdoors of AT&T company headquarters on March 13, 2020, in Dallas, Texas. (credit score: Getty Pictures | Ronald Martinez)

AT&T misplaced 617,000 clients from DirecTV and its different TV companies within the ultimate quarter of 2020, capping a yr wherein it misplaced almost three million clients within the class, AT&T reported right this moment.

AT&T right this moment additionally knowledgeable the Securities and Change Fee that it has taken “noncash impairment fees of $15.5 billion” associated to its ongoing DirecTV debacle. AT&T mentioned the $15.5 billion fees replicate “adjustments in our administration technique and our analysis of the home video enterprise… together with our choice to function our video enterprise individually from our broadband and legacy telephony operations.” This operational choice “required us to establish a separate Video reporting unit and to evaluate each the recoverability of its long-lived belongings and any assigned goodwill for impairment,” AT&T mentioned.

AT&T mentioned it additionally logged “fees of roughly $780 million from the impairment of manufacturing and different content material stock at WarnerMedia, with $520 million ensuing from the continued shutdown of theaters in the course of the pandemic and the hybrid distribution mannequin for our 2021 movie slate.”

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AT&T might hold majority possession of DirecTV because it closes in on closing deal

A DirecTV satellite dish mounted to the outside of a building.

Enlarge / A DirecTV satellite tv for pc dish seen exterior a bar in Portland, Oregon, in October 2019. (credit score: Getty Photographs | hapabapa)

AT&T is reportedly closing in on a deal to promote a stake in DirecTV to TPG, a private-equity agency.

Sadly for patrons hoping that AT&T will relinquish management of DirecTV, a Reuters report on Friday mentioned the pending deal would give TPG a “minority stake” in AT&T’s satellite-TV subsidiary. However, a private-equity agency seeking to wring worth out of a declining enterprise would not essentially be higher for DirecTV prospects than AT&T is.

It is also doable that AT&T might cede operational management of DirecTV even when it stays the bulk proprietor. CNBC in November reported on one proposed deal wherein “AT&T would retain majority financial possession of the [DirecTV and U-verse TV] companies, and would keep possession of U-verse infrastructure, together with vegetation and fiber,” whereas the client of a DirecTV stake “would management the pay-TV distribution operations and consolidate the enterprise on its books.”

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AT&T loses one other 600,000 TV prospects because it seeks purchaser for DirecTV

AT&T's logo and stock price displayed on a monitor on the floor of the New York Stock Exchange in January 2019.

Enlarge / AT&T’s emblem and share worth displayed on a monitor on the New York Inventory Trade on Tuesday, Jan. 22, 2019. (credit score: Getty Pictures | Bloomberg)

AT&T misplaced 627,000 TV prospects in Q3 2020, an enchancment over earlier quarters as the corporate continues its try to promote its failing DirecTV division.

In earnings outcomes reported immediately, AT&T mentioned it misplaced 590,000 “Premium TV” prospects, a class that features DirecTV satellite tv for pc, U-verse wireline TV, and the net service generally known as AT&T TV. AT&T additionally misplaced 37,000 prospects from AT&T TV Now, the streaming service previously generally known as DirecTV Now.

The Premium TV lack of 590,000 prospects in Q3 is the very best outcome since AT&T misplaced 544,000 subscribers in Q1 2019. AT&T’s Premium TV losses ranged from 778,000 to 1.16 million prospects per quarter from Q2 2019 via Q2 2020. AT&T presently has 17.1 million Premium TV prospects, down from over 25 million in early 2017.

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AT&T reportedly making an attempt to promote DirecTV after huge buyer losses

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AT&T is reportedly making an attempt to promote DirecTV to private-equity traders simply 5 years after shopping for the satellite tv for pc supplier. The negotiations with potential consumers come after tens of millions of shoppers ditched DirecTV over the previous two years, and will worth DirecTV at a lot lower than the $49 billion AT&T paid for it.

“AT&T is in search of private-equity traders to purchase nearly all of its DirecTV satellite-television enterprise, serving to it deal with a significant drag on its operations, in accordance with folks aware of the scenario,” Bloomberg wrote yesterday. AT&T and its advisers at Goldman Sachs “have been in talks with private-equity suitors in regards to the satellite tv for pc TV unit,” with potential bidders together with Apollo International Administration and Platinum Fairness, The Wall Road Journal reported.

AT&T might find yourself promoting DirecTV for much lower than it paid 5 years in the past. “Any deal for the satellite tv for pc TV service can be sizable however seemingly a far cry from the $49 billion AT&T paid for it in 2015,” the Journal wrote, quoting sources aware of the talks as saying that “a deal might worth the enterprise under $20 billion.”

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Cities sue Netflix, Hulu, Disney+, declare they owe cable “franchise charges”

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4 cities in Indiana are suing Netflix and different video firms, claiming that on-line video suppliers and satellite-TV operators ought to need to pay the identical franchise charges that cable firms pay for utilizing native rights of method.

The lawsuit was filed in opposition to Netflix, Disney, Hulu, DirecTV, and Dish Community on August four in Indiana Industrial Court docket in Marion County. The cities of Indianapolis, Evansville, Valparaiso, and Fishers need the businesses to pay the cable-franchise charges established in Indiana’s Video Service Franchises (VSF) Act, which requires funds of 5 p.c of gross income in every metropolis.

The lawsuit relies on an uncommon authorized argument and does not appear more likely to succeed. Basically, the cities are claiming that Netflix and comparable suppliers use the general public rights of method just by providing video streaming companies over the Web:

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AT&T’s epic DirecTV losses mount as one other 954,000 video prospects flee

A DirecTV satellite dish mounted to the outside of a building.

Enlarge / A DirecTV satellite tv for pc dish seen outdoors a bar in Portland, Oregon, in October 2019. (credit score: Getty Pictures | hapabapa)

AT&T misplaced practically 1 million TV prospects in Q2 2020, persevering with a speedy exodus of customers from DirecTV and different AT&T-operated video providers.

Within the three months ending June 30, AT&T reported a web lack of 954,000 video prospects in earnings outcomes launched in the present day. That features an 886,000-customer web loss from AT&T’s “Premium TV” providers, a class that features DirecTV satellite tv for pc, U-verse wireline service, and the AT&T TV on-line service that mimics cable TV. One other 68,000 prospects left AT&T TV Now, a separate streaming service previously often known as DirecTV Now.

Greater costs helped drive the shopper losses. Because it has in previous quarters, AT&T stated its observe of giving out fewer promotional-pricing offers contributed to the shopper losses for AT&T TV Now. AT&T stated the Premium TV loss was “attributable to competitors in addition to decrease gross provides from the continued deal with including higher-value prospects.” As prospects depart the older DirecTV and U-verse providers, any positive aspects from the AT&T TV premium streaming service clearly have not been excessive sufficient to offset the exiting satellite tv for pc and wireline prospects.

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