A possible move by AT&T to divest DirecTV--a move favored by many financial analysts--could have huge consequences for AT&T’s free cash flow.
Consider that since the third quarter of 2015, the video business has produced 66 percent to 72 percent of AT&T’s fixed network consumer revenue, and possibly $8 billion to $9 billion of free cash flow.
Granted, AT&T’s total cash flow contributor is the mobility business, at about 48 percent. DirecTV and the consumer internet access business represent about 15 percent of free cash flow.
DirecTV contributes perhaps half of AT&T’s total free cash flow of perhaps $15 billion to $16 billion.