AT&T, loaded with debt from its DirecTV deal, sells part of its TV business to a private equity firm.

Under the terms of the deal with TPG, ATT will own 70 percent of the new stand-alone company, which will go by DirecTV, and TPG will own 30 percent. The board of the new entity will include two representatives from each company and the chief executive of ATT’s video unit, Bill Morrow.

The companies hope to fix challenges facing DirecTV — namely a subscriber base that has been bleeding customers faster than most pay-TV services. Annual sales at the DirecTV group fell 11 percent last year to $28.6 billion, and operating profit decreased 16.2 percent to $1.7 billion. The company is also counting on growth of ATT TV, the company’s new service that streams TV over the internet to a set-top box.

“We certainly didn’t expect this outcome when we closed the DirecTV transaction in 2015, but it’s the right decision to move the business forward,” said John Stankey, ATT’s chief executive, who as an executive at WarnerMedia led both the DirecTV and Time Warner deals.

TPG has ample experience with corporate partnerships, including taking a joint stake in Intel’s McAfee computer security unit and teaming up with Humana in its deal for the hospice provider Kindred. It has owned parts of Spotify, Creative Artists Agency, the cable provider Astound Broadband, and Entertainment Partners, which provides software to the entertainment and video industry.

ATT has not ruled out more divestitures.

Article source: https://www.nytimes.com/2021/02/25/business/att-tpg-directv.html