Fitch Ratings has examined the long-term debt for pay-TV broadcaster DirecTV. The downgrade is modest (at BB from BB+) but the result could make further borrowing slightly more costly. DirecTV is owned by AT&T and TPG (the former Texas Pacific Group).

Fitch says: “The downgrade reflects secular pressures resulting in increased uncertainty around industry valuations. The Issuer Default Rating (IDR) reflects the company’s scale as one of the largest multi-channel video programming providers in the US, its strong cash flows and its conservative leverage profile. Concerns include the continued, industry-wide secular pressure on providers of traditional linear television as consumers have shifted a material portion of their video consumption to a variety of OTT streaming services.”

Fitch specifically addressed the declining industry trends, saying: “Secular pressures have resulted in declining subscribers of traditional linear television, including satellite pay TV, due to shifting consumer preferences and technology changes. The video industry has rapidly evolved over the last few years, with direct to consumer (DTC) platforms such Netflix, Amazon and Disney+ amassing significant subscribers. This has led to material subscriber losses in traditional video distributors. In addition, the growth in broadband accessibility and speeds makes it easier for OTT platforms to provide streaming services.”

“Declining revenue due to subscriber losses has placed pressure on margins over the past several years. Management continues to implement cost cuts to offset these declines and newer product offerings have lower expenses, but Fitch expects EBITDA margins to be pressured through the forecast,” says the ratings report.

“DirecTV’s video subscriber base is the third largest traditional multi-channel video programming distributor (MVPD) in the US with about 8.8 million subscribers at the end of 2Q25. It follows Charter Communications, Inc. with about 12.6 million and Comcast with about 11.5 million video subscribers. All three have materially less scale than five years ago. DirecTV remains the largest on a video-only revenue basis but has no broadband or other operations like its peers. Scale is crucial for MVPD operators as it provides greater negotiating power with content providers and TV broadcasters, helping to manage costs amid secular pressures,” Fitch adds.

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