2019 is going to be a critically year for AT&T. And what it comes down to is the company's debt. They are the most heavily leveraged non-financial firm in the world, and they're gonna have to pay that down and maintain their pretty hefty dividend. And if they don't do that, they risk cutting the dividend and that is gonna be a load of trouble for AT&T.
I'm Jennifer Saba, I'm a columnist with Breakingviews in New York. All right, so why 2019 is such a risky year for AT&T is because they've done a lot of acquisitions in the past couple of years and that includes DirecTV. Basically, what's happened with DirecTV is that subscribers have been declining.
And their new product, which is a direct-to-consumer video kind of skinny bundle called DirecTV Now is not getting enough subscribers that are paying the same kind of money that they did for the satellite service. And then on top of that you have Time Warner. AT&T paid $85 billion to buy Time Warner and they're trying to transform from a phone company into a media and entertainment company.
>> But here we are.>> Chief Executive Randall Stephenson has to pay a lot of pipers and he has to pay attention to a lot of different aspects of the business. AT&T has a lot of plates in the air that they have to keep spinning. And one of the things that they're gonna have to do is invest in content, TV, programs and films, because Netflix is spending like a drunken sailor.
You have Disney and Fox that are ramping up for their video product to consumers. So there's a lot of competition there. They also have to invest in their network because Verizon and possibly Sprint and T-Mobile are going to be doing that. And then they also have to keep up their dividend, they have to find money to keep those increases going.
One corollary to look at is General Electric, which was a huge company, and they had to cut the dividend to make their debt payments. And that was a catastrophic mistake for GE. And they had to do it, but what happened was the stock has been spiraling down ever since.
Now, I'm not saying AT&T would be in this position, but there's certainly a risk if they cut the dividend that the stock will fall and that could be a real problem.