AT&T wants to be big in entertainment, but first it has a $49 billion problem to fix
Drew FitzGerald
5 hrs ago When AT&T Inc. took over DirecTV in 2015, a group of executives from the two companies gathered at Fleming’s steakhouse in El Segundo, Calif., to celebrate the deal. Toward the end of the dinner, DirecTV chief Mike White stood up, drew a lightsaber and handed it to an executive of AT&T, saying it might help in future negotiations with channel owners.
Today the telecom company, nicknamed the Death Star by detractors, isn’t scaring so many. Acquiring satellite-TV provider DirecTV, which cost $49 billion, was supposed to catalyze AT&T’s transformation into a media and entertainment giant. Instead, it has become one of the biggest casualties of the rise of Netflix Inc. and other streaming-video services.
DirecTV has lost 1.4 million satellite customers since its peak of 21 million-plus about two years ago. Analysts expect news of roughly 300,000 more defections when AT&T reports quarterly results on Wednesday. AT&T is bracing for cancellations this year that would cut into its 2019 operating profits by $1 billion.
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