AT&T Might Unload Regional Sports Networks To Reduce Debt
Zacks Investment Research | Jul 02, 2019 09:03PM ET
AT&T Inc. (NYSE:T) is mulling over a sale of its four regional sports networks in a bid to reduce its heavy-debt balance sheet, per Bloomberg. The move is part of the telecom giant’s ongoing efforts to trim up to $8 billion in liability by the end of 2019. Although, no official announcement has been made by the company about this deal.
The wireless service provider is actively working out ways to honor its de-leveraging goals with healthy free cash flow and asset sales. At the end of first-quarter 2019, AT&T had $6,516 million in cash and equivalents with $163,942 million of long-term debt. It remains committed toward managing its debt portfolio and is on track to achieve its target of 2.5x debt-to-EBITDA range by 2019.
Reportedly, the company’s regional networks could bring in around $1 billion as sale proceeds. These comprise AT&T SportsNet Pittsburgh, AT&T SportsNet Rocky Mountain (available in Utah, Nevada and Colorado), AT&T SportsNet Southwest (areas of Texas and Louisiana), and Root Sports Northwest (Alaska, Washington and Oregon).
Moving on, Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) , which in May decided to buy 21 Fox regional sports networks from The Walt Disney Company (NYSE:DIS) for $9.6 billion, could be among the probable buyers. In this context, Sinclair’s purchase of the Fox networks is still awaiting approval from the Department of Justice and the FCC.
AT&T expects to continue its growth momentum through 2019 and beyond as it is well positioned to benefit from the impending 5G technology and extended LTE coverage. Over the past five years, the company has invested about $145 billion in wireless and wireline networks, including capital investments and acquisitions of wireless spectrum and operations. Its fiber network is one of the nation’s largest and connects more Internet of Things devices compared to any other provider in North America.
In addition, AT&T has been raising cash by divesting holdings, including its stake in Hulu and its offices in New York. Together, the deals procured $3.6 billion. The company is spending heavily on a number of projects, including expansion of its 5G wireless network. However, it is likely to benefit from the solid momentum in its wireless business and 5G deployments in multiple U.S. cities.
Further, the company is building networks that will likely enable fiber-based connectivity and LTE to work efficiently in parallel with 5G solutions, making the most of business transformation alongside opportunities to enhance revenues and reduce operating expenses.
AT&T has long-term earnings growth expectation of 4.5%. Driven by diligent execution of operational strategies, the stock has rallied 18.6% compared with the Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.