AT&T Mulls $40 Billion Acquisition of DirecTV: Report

AT&T, DirecTV Deal? Report of Potential

AT&T has approached DirecTV about acquiring the satellite giant in a deal that could cost at least $40 billion, according to a report in The Wall Street Journal published late Wednesday.

Such a pact would create a pay-TV behemoth that would rival the size of another juggernaut: Comcast, which is hoping to clear regulatory hurdles in pursuit of Time Warner Cable. While that MSO combination could total as many as 30 million subscribers, an AT&T-DirecTV pairing would amount to 26 million–nearly 6 million coming from AT&T’s own pay-TV service, U-Verse.

While DirecTV-AT&T would be a different kind of deal considering it would bring together two different varieties of TV distributors, the sheer size of the deal would likely also face regulatory scrutiny.

The pact comes as some surprise, though nearly every permutation of pay-TV giant has been bandied about in recent months as consolidation is all but sure to reconfigure the business in the face of challenges from the tech sector. AT&T and DirecTV already partner in some businesses, which makes the combination realistic, although there had been far more speculation that DirecTV and Dish Network would come together to form a super-sized satellite service.

Neither AT&T nor DirecTV commented in WSJ’s story.

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  1. The telecommunications industry is becoming a big oligopoly. There is already an implicit understanding between AT&T and Verizon to not compete aggressively in the same markets. Now, if AT&T acquires DirecTV, there will be even less choice. Further, the FCC is in the process of dropping ‘net neutrality’, the principle that an Internet provider could charge you for higher speeds but could not charge you more for particular content. That’s about to go away. Be prepared for much higher prices for Internet

  2. Joe McG says:

    While I’m not happy that my DirecTV could be gobbled up by AT&T, I have to admit, it’s a bold move! AT&T is in no position to fight a “land war” with Comcast, TimeWarner Cable, Charter, or the others for local franchise territories rights, so going with DirecTV would allow them to abandon wires and claim the whole country (or the whole world) as their territory. I’m not in favor of this, but I do admire their thinking, and it would help AT&T move away from less-profitable wired businesses and become completely wireless.

  3. Interesting I have Direct TV & love it.

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