AT&T exploring Deal to sell off DIRECTV. (6 Viewers)

Juan

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I was reading up on private equity firms and what they do. It looks like they buy companies to make the better to make a profit off them. I guess the firm could make DTV better by contracting out new boxes and have a new guide? Maybe even launch a new Satellite? Why would they want to invest that money if Internet streaming is the future?
Better meaning more profitable...not from a consumer point of view
 
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comp9

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I was reading up on private equity firms and what they do. It looks like they buy companies to make them better and make a profit off them. I guess the firm could make DTV better by contracting out new boxes and have a new guide? Maybe even launch a new Satellite? Why would they want to invest that money if Internet streaming is the future?
You got a real thing for guides.... as Juan pointed out they make them better as more profitable. Which means cutting more expenses and milking every customer they have left until they get there money back and make a profit.
 
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navychop

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But to be fair. Even with a bitter taste in our mouths, Vulture Capitalists do sometimes save companies that would otherwise go under. Fewer jobs, but still some jobs.

Ain’t NOBODY gonna make new STBs for DTV. No money in it
 

ncted

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Better meaning more profitable...not from a consumer point of view
More profitable for the firm, not necessarily for the company itself. Private equity isn't about saving companies. Their involvement often, but not always, results in fundamental changes that ultimately lead to mergers or divestitures that mean the original company really no longer exists, and certainly the employees, customers, suppliers, and partners of the original company tend to lose out in the process. It is about as appealing to be a part of as IT off-shoring.
 

Juan

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More profitable for the firm, not necessarily for the company itself. Private equity isn't about saving companies. Their involvement often, but not always, results in fundamental changes that ultimately lead to mergers or divestitures that mean the original company really no longer exists, and certainly the employees, customers, suppliers, and partners of the original company tend to lose out in the process. It is about as appealing to be a part of as IT off-shoring.
Bingo.. more profitable for share holders
 

slice1900

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A pure investor like a VC wants to maximize return. That means not cutting all costs to maximize profit and let the asset go bankrupt in a few years, but trying to maximize its return over the life of the asset. If they need to make some investments to make Directv viable for the full 10 years I estimate satellite has left before it is no longer a good business model there are some limits to the costs they can cut.

Don't look for them to launch any new satellites though CSM - especially because Directv has no need for any additional satellites. I mean they COULD do that, just like they COULD introduce a new SD only receiver. But I don't think they will.
 

Juan

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A pure investor like a VC wants to maximize return. That means not cutting all costs to maximize profit and let the asset go bankrupt in a few years, but trying to maximize its return over the life of the asset. If they need to make some investments to make Directv viable for the full 10 years I estimate satellite has left before it is no longer a good business model there are some limits to the costs they can cut.

Don't look for them to launch any new satellites though CSM - especially because Directv has no need for any additional satellites. I mean they COULD do that, just like they COULD introduce a new SD only receiver. But I don't think they will.
No..its usually a 5 year plan...they dont plan ahead any further than that...face facts...subscriber ( cable & Satellite) tv is dying..future is iptv...nobody is going to invest in a dead technology ( 0 growth..losing subs)... they want to liquify every penny out of it
 
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CSM

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No..its usually a 5 year plan...they dont plan ahead any further than that...face facts...subscriber ( cable & Satellite) tv is dying..future is iptv...nobody is going to invest in a dead technology ( 0 growth..losing subs)... they want to liquify every penny out of it
So do you think DTV only has five years left? The T14, T15 and T16 would last until 2035. Would Dish buy those and their broadcast centers? Or would the private equality firm just let them waste away in orbit until their fuel runs out?
 

Juan

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So do you think DTV only has five years left? The T14, T15 and T16 would last until 2035. Would Dish buy those and their broadcast centers? Or would the private equality firm just let them waste away in orbit until their fuel runs out?
Not at all...probably a loong time left...technolgy doesn't just die
 

NYDutch

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So do you think DTV only has five years left? The T14, T15 and T16 would last until 2035. Would Dish buy those and their broadcast centers? Or would the private equality firm just let them waste away in orbit until their fuel runs out?
If the sats are not generating income, they could always de-orbit them and cut their loses.
 
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slice1900

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Then THEY too sell it.
Yep, if you think something isn't making enough money, but is making SOME money then it is worth something to someone else. You don't simply shut it down unless it is losing money badly enough that no one is interested in buying it even for $1 in the hopes of turning it around.

Some businesses can end up "asset stripped" if they own a lot of valuable assets but Directv wouldn't be attractive for that unless/until it started losing money. The satellites don't have a ton of resale value since they are fairly specific to US frequency brands and the CONUS footprint of the US. The broadcast centers have some value but the list of potential buyers who would 1) need something like that and 2) don't already have something like that wouldn't be very long.

All that fiber they have probably has some value, but I wonder if AT&T might keep that when they sell Directv, and create long term leases for that capacity. Depends on whether AT&T can use additional fiber capacity where Directv has it.
 

Juan

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Yep, if you think something isn't making enough money, but is making SOME money then it is worth something to someone else. You don't simply shut it down unless it is losing money badly enough that no one is interested in buying it even for $1 in the hopes of turning it around.

Some businesses can end up "asset stripped" if they own a lot of valuable assets but Directv wouldn't be attractive for that unless/until it started losing money. The satellites don't have a ton of resale value since they are fairly specific to US frequency brands and the CONUS footprint of the US. The broadcast centers have some value but the list of potential buyers who would 1) need something like that and 2) don't already have something like that wouldn't be very long.

All that fiber they have probably has some value, but I wonder if AT&T might keep that when they sell Directv, and create long term leases for that capacity. Depends on whether AT&T can use additional fiber capacity where Directv has it.
Directv leases their fiber
 

Juan

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No, Directv owned one of the largest fiber networks in the country before AT&T bought them.
Nope...they operated one...it would be really stupid and unprofitable to install your own fiber when thousands of miles of fiber are already installed and ready to lease...as far as I know..directv never employed any fiber maintenance crews
 

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