Divesting DirecTV Might Cost AT&T 13% or So of Free Cash Flow

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. 

source: ValueWalk

source: AT&T

DirecTV contributes perhaps half of AT&T’s total free cash flow of perhaps $15 billion to $16 billion. 

source: Bloomberg