DirecTV Plans to Cut Spending, Hiring to Prepare for Any Economic Slowdown

Considering Cheaper Channel Bundles with No Sports Networks

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DirecTV Credit: AP

DirecTV, the largest U.S. satellite-TV provider, will cut back on spending in 2012 to prepare for any slowdown in the economy, CEO Michael White said.

"We're tightening our belts in terms of spending," Mr. White said in an interview. "We'll cut back on overhead, hiring and programming."

The European debt crisis and U.S. presidential election make it difficult to predict the level of economic expansion, causing DirecTV to "slow our growth rate," Mr. White said. Cutbacks won't affect DirecTV's spending on strategic initiatives, such as the development of TV Everywhere products, which allow users to watch TV programs on mobile devices such as tablets, he said.

DirecTV is considering offering channel bundles that don't include sports networks to customers looking to save money, according to Mr. White. As DirecTV's programming costs increase about 10% each year, the best way of preventing rising cable bills is to give customers more choice, including scaled-down packages with fewer channels, he said.

The second quarter was DirecTV's worst on record for U.S. customer gains, according to Bloomberg data, with only 26,000 net additions. That accelerated to 327,000 in the third quarter, after DirecTV gave a year of its NFL Sunday Ticket football package for free to customers who signed two-year contracts. Mr. White declined to say if the same promotion will be offered in 2012.

The company had about 20 million U.S. customers at the end of September, and about 16,000 employees as of the start of the year.

-- Bloomberg News --

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