‘TV Anywhere’ Is the Main Reason AT&T Bought DirecTV

Matt Rourke/AP
Matt Rourke/AP

The clamor for TV-anywhere was the driving force behind AT&T’s willingness to pay $48.5 billion for DirecTV.

In a call with analysts a day after their acquisition deal was announced, the chief executives who shook hands after weeks of negotiations — AT&T CEO Randall Stephenson and DirecTV CEO Mike White – envisioned Monday various scenarios in which their customers can watch live-TV on tablets in their backyard or on family road trips.

With DirecTV’s 20 million customers under AT&T’s umbrella and its ability to beam satellite TV to just about anywhere in the U.S., AT&T will look to integrate the technology with its own portfolio of a nationwide wireless network and landline Internet and TV businesses that currently have a more limited reach.

“We need to be scaled on video,” Stephenson said. “We think we landed on the best video player out there.”

DEAL: AT&T buys DirecTV for $48.5 billion

ANALYSIS: Why AT&T wants to buy DirecTV

AT&T has offered to pay $95 for each DirecTV share. But with a daunting regulatory approval process ahead and analysts’ still questioning AT&T’s motive in buying a company that lacks spectrum assets and expertise in broadband Internet, investors remained skeptical Monday morning. DirecTV shares fell 1.95% to $84.50.

Shares of AT&T fell 1.3% to $36.26.

DirecTV has won legions of fans with its NFL Sunday Ticket – live airing of all NFL games – and 195 high-definition channels, more than its competitors. And Stephenson, who has come to know DirecTV’s business well over the years through their joint distribution agreement, said he believed DirecTV has the industry’s “best video customer base” and “the best content arrangement” that will boost AT&T’s video options.

The significance of DirecTV’s exclusive contract with the NFL is huge. The contract expires after the end of the upcoming season, and other content providers, including reportedly Google, are interested in replacing DirecTV. White said he’s confident they will have a renewed deal by the end of the year.

But AT&T has an option to walk away from the merger if DirecTV can’t renew “substantially on the terms discussed between” the two companies, according to a filing AT&T made with the Securities and Exchange Commission Monday.

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Source: USA Today | Roger Yu

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