3 Reasons AT&T Should Sell DirecTV

Five years ago, AT&T (NYSE: T) bought DirecTV for $49 billion to become the largest pay TV provider in the U.S. and the world. At the time, AT&T believed it could bundle DirecTV's satellite TV channels into its pay TV and wireline businesses. AT&T also launched DirecTV Now, a streaming bundle of channels meant to challenge Netflix (NASDAQ: NFLX) and other OTT platforms.

But today, DirecTV is a dead weight on AT&T's struggling pay TV business, and investors have reportedly been pushing it to sell or spin off the unit, with a merger with Dish Network (NASDAQ: DISH) being a possible exit strategy.

AT&T repeatedly declared it had no plans to sell DirecTV, but a recent Fox Business report claimed it was facing fresh pressure to divest the unit to cut costs. A deal might not ever happen, especially as the COVID-19 crisis forces companies to conserve their cash -- but AT&T's investors should hope it eventually sells DirecTV, for three simple reasons.

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Source Fool.com