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Viacom and AT&T early Monday said they have reached a new carriage deal after their negotiations had led to a war of words late last week.
The agreement will keep such flagship Viacom networks as MTV, Nickelodeon and Comedy Central on AT&T’s DirecTV and U-Verse pay TV services. While the companies didn’t disclose much detail on the new deal’s terms, Viacom’s stock was up 5.5 percent in pre-market trading as investors took the agreement as a sign that the company’s young-skewing networks are worth carrying for pay TV giants. AT&T’s stock was up 0.3 percent before the market open.
“We are pleased to announce a renewed Viacom-AT&T contract that includes continued carriage of Viacom services across multiple AT&T platforms and products,” the companies said in a joint statement. “The deal also brings AT&T customers more choice and improved value for Viacom content.”
The companies added: “We expect to announce additional details in the near future.”
Viacom, led by CEO Bob Bakish, has focused on six flagship networks and looked to stabilize its ratings as its young audiences have flocked to alternative entertainment options in recent years. It has reached carriage with key pay TV distributors in recent years despite the ratings challenges.
AT&T, meanwhile, has been looking to battle the continuing increase in carriage fees distributors have had to pay content providers.
The new deal was reached after rhetoric had heated up last week ahead of the expiration of the companies’ previous deal. Viacom talent, including Lindsay Lohan, Trevor Noah, Abbi Jacobson and Pauly D, encouraged people on their social media channels to call DirecTV and AT&T to try to ensure continued carriage of the company’s channels.
“Unfortunately, AT&T is abusing its new market position by favoring its own content — which significantly underperforms Viacom’s — to stifle competition,” Viacom said in a statement Thursday about the negotiations. “AT&T-DirecTV’s behavior is also consistent with a recent pattern of gouging their customers by charging them higher prices for an inferior product with fewer channels.”
In its own statement, AT&T said at the time, “We’re disappointed to see Viacom put our customers in the middle of their negotiations. We are on the side of customer choice and value and want to keep Viacom’s channels in our customers’ lineups. We hope to avoid any interruption to the channels some of our customers care about.”
Added AT&T: “The facts speak for themselves: several of Viacom’s channels are no longer popular. Viacom’s channels in total have lost about 40 percent of their audience in the past six years.”
BTIG analyst Richard Greenfield in the title of a note to investors last week asked: “Does AT&T-DirecTV Really Want to Find Out What Dropping Viacom Does to Sub Losses?” He highlighted in his note that “DirecTV dropped Viacom networks back in 2012, and it did not end well for DirecTV, with competitors seizing on the opportunity to capture market share at DirecTV’s expense. The multi-week Viacom drop ended in a long-term carriage deal between DirecTV and Viacom.”
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