A story in Wednesday’s Wall Street Journal reported that AT&T (NYSE:T) is considering selling DirecTV.
The telecom giant has weighed several options, the Journal reported, including breaking off DirecTV into its own company and combining DirecTV with Dish Network Corp. (NASDAQ:DISH)
However, following the Journal report, a source familiar with the matter told Reuters that AT&T and Dish were not in talks over the deal, due to regulatory issues.
"So there’s been some stories out there about the industrial logic about putting two satellite providers," said AT&T CFO John Stephens.
"That’s been tried from a regulatory perspective. It hasn’t been successful and I don’t know that there’s any change in that regulatory perspective. So understanding industrial logic, put quite frankly, it’s been tried and has been rejected."
DirecTV has been bleeding satellite TV subscribers with users shifting to cheaper online streaming services like Netflix Inc (NASDAQ:NFLX) and Amazon.com Inc’s (NASDAQ:AMZN) Prime service.
AT&T lost 778,000 premium TV subscribers, which includes DirecTV users in the second quarter, more than the 544,000 it lost in the prior quarter, and expects the video losses to continue in the current quarter.
Elliot Management, which owns a $3.2-billion stake in AT&T, has pushed the company to divest from DirecTV. AT&T is trying to circumvent pay TV with HBO Max.
The hedge fund urged the company to end its acquisition spree to focus on improving its business, while criticizing the $85 billion purchase of media company TimeWarner Inc last year and the $49 billion deal for DirecTV in 2015.
AT&T shares hiked 35 cents, or 1%, to $37.11, early Thursday, while those for Dish gathered 43 cents, or 1.2% to $36.00
