AT&T to Acquire DirecTV for $48.5 Billion in Stock, Cash Deal
May 18, 2014 7:48 PM
comment(s) - last by
The deal would give AT&T a an additional 20 million TV subscribers
Just as the
are trying to grapple with the scope of
Comcast’s $45 billion purchase of Time Warner Cable (TWC)
; AT&T is making waves with a huge acquisition of its own. AT&T announced today its intentions to purchase satellite TV provider DirecTV for $48.5 billion.
The deal, which will be comprised of both stock and cash,
was first rumored early this month
and isn’t too terribly surprising as AT&T and DirecTV currently work together to
provide bundled phone, internet, and TV service
According to the
, AT&T currently has 5.7 million customers on its homegrown TV service,
; but the DirecTV acquisition would give it an additional 20 million TV subscribers. For comparisons sake, the combined Comcast-TWC would have 30 million TV customers.
[Image Source: Fox News]
If the deal is approved, AT&T would offer bundled high-speed internet, TV, phone, and mobile services though all of its 2,300 branded retail stores and its numerous authorized dealers.
“This is a unique opportunity that will redefine the video entertainment industry and create a company able to offer new bundles and deliver content to consumers across multiple screens – mobile devices, TVs, laptops, cars and even airplanes,” said AT&T CEO Randall Stephenson. “At the same time, it creates immediate and long-term value for our shareholders.”
Other details about the merger include AT&T’s intentions to abide by the
FCC’s net neutrality rules
for three years following the deal’s approval. AT&T has also made it clear that it plans to expand its broadband service to 15 million customers (mainly in rural areas). In addition, AT&T will offer standalone broadband speeds of “at least 6 Mbps” to customers who are currently served by its wireline IP broadband service and don’t wish to partake in the company’s TV service offerings.
AT&T expects to complete the transaction within 12 months following regulatory approval.
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RE: For Comparison's Sake....
5/19/2014 12:25:45 PM
When no Netflix user has the option to choose between them, how are they competitors for Netflix's users?
It's not like Netflix can expect a Comcast customer to switch to TWC here. Because they don't exist together in any market, they do not compete against each other for users.
Where as millions of people will likely lose a television provider option if the DirecTV deal goes forward.
RE: For Comparison's Sake....
5/19/2014 3:39:27 PM
The difference is that since Comcast had say 20% of users, they had more leverage to charge Netflix more money - basically like an old school protection racket pay us money so we don't slow down your connection. TWC also only had say 15%, and did not have as much clout. You put the 2 together and they have alot more clout to offer even more "protection" to Netflix.
Since Netflix now has to shell out billions of dollars in "protection" they raise rates for all users (regardless of their provider) so everybody with netflix helps subsidize ComWarners profits whether they can actually use them or not. I think it would be best if Netflix turned around and raised prices just on users on Comcast/TWC to pay the bill Comcast is charging instead of on everybody, but I am sure that will not happen.
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