AT&T Chicago store (interior 001)

Following the news that Sprint is considering buying T-Mobile comes word of another major acquisition. The Wall Street Journal is reporting that AT&T has approached DirecTV to begin possible buyout talks. The deal, the outlet says, could be worth over $40 billion in cash, stock and other assets.

Between DirecTV’s satellite business and AT&T’s U-verse arm, the move would result in a combined 26 million TV subscribers—which would be second only to the hypothetical Comcast/TWC combination, should that deal go through. So essentially, the two companies would hold most of the market…

Here’s the scoop from the Journal:

 AT&T has approached DirecTV about a possible acquisition of the satellite-TV firm, say people familiar with the situation, the latest sign of a possible shake-up in the television industry. A combination of AT&T with satellite-TV firm DirecTV would create a pay television giant close in size to where Comcast Corp. will be if it completes its pending acquisition of Time Warner Cable. TWC +0.09%

DirecTV is the second biggest pay TV operator, serving about 20 million customers, while AT&T’s landline-based TV business serves about 5.7 million. The nearly 26 million subscribers served by the combined company would compare with Comcast which—with TWC—would serve close to 30 million subscribers. A deal would likely be worth at least $40 billion, DirecTV’s current market capitalization, a fraction of AT&T’s $185 billion market capitalization.

It’s quite possible that DirecTV is looking to make a deal. The Journal says that the company recently approached its competitor Dish Network over a possible merger, but a tie-up with AT&T might make more sense. The two sides are already partners in markets for TV, phone and Internet packages.

Of course, even if the acquisition is made official, it’ll have to get the approval of federal regulators. We don’t have much of an idea right now of how they feel about Comcast’s proposed merger with Time Warner Cable, but we can’t imagine they’d be in a hurry to approve to major cable operator deals.

AT&T’s particular track record garnering regulatory approval isn’t very good. In 2011 the carrier’s T-Mobile buyout deal was blocked by the FCC, forcing it to pay $4 billion in breakup fees.

So what do you make of this possible AT&T-DirecTV deal?

  • Darnel Seaton

    I don’t give a crap about TV/Satellite providers but we need to see federal support for internet providers so as to increase competition and better service!!!

  • dencimm

    “federal support?” in what form?

    money? HELL NO! don’t give my tax dollars to “help” certain companies. The whole idea is anti-capitalist.

  • Eddiepradom

    Just another way for the rich to become richer

    • dencimm

      It’s called Capitalism.

  • Jacob S

    Who cares about Direct TV and U-Verse? Both sux!!!

  • Blip dude

    Hah!!! Getting rid of DirecTV was of the best decisions ever made in our household. I can’t stand it whenever I go to best buy and the employees start manipulating me into getting DirecTV again even after I tell them that I already told DirecTV to F*** off!! after U-verse internet is the only thing we need for our entertainment (Hulu+, Netflix, Crunchyroll, Ultraviolet/iTunes, etc).

  • crAppleKilla

    I can’t believe people actually pay for cable/satellite. I been pirating my cable service for the last 14 years and there is never anything but GARBAGE on TV. If I had to pay for this crap I’d just stick to streaming movies/tv online.

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