Viacom Shares Spike 14 Percent After Carriage Deal With Dish
The two companies averted a blackout by announcing a deal several hours past the deadline.
Viacom’s beleaguered stock got a 14 percent jolt on Thursday from news that 18 of its channels would remain on Dish Network for several more years.
Viacom’s deal with Dish was set to expire at midnight, when its channels would go dark, likely never to return. The two companies averted such a scenario by announcing a deal several hours past the deadline.
While most financial details of the new relationship are being kept under wraps, some analysts figure Dish is paying at least $3 per month for the Viacom channels.
The two did reveal Thursday that the new deal will include Comedy Central, Spike, MTV and some others also being available on Sling TV, the satellite provider’s skinny bundle that is available online.
At the end of trading on Thursday, Viacom shares were up $5.18 to $42.56, but the stock remains 35 percent lower than it was a year ago.
While Viacom has successfully negotiated new agreements with AT&T, Mediacom, Frontier Communications and Charter Communications, it failed in its attempts with Suddenlink and Cable One, and some analysts predicted a massive downswing for the stock if the conglomerate also lost Dish.
On Thursday, Jefferies analyst John Janedis called the Viacom-Dish deal a victory for all owners of content. “The balance of power has completely swung in favor of the distributors to being more balanced,” he said.
Drexel Hamilton analyst Tony Wible said that if Viacom had lost Dish, $800 million in annual revenue and profit would have disappeared, which he says would have been “catastrophic” for the stock.
“We believe this removes a very big overhang for Viacom stock and should relieve concern over future affiliation deals,” Wells Fargo analyst Marci Ryvicker said Thursday.
Dish stock, which also has been under pressure, rose 1 percent Thursday and is off 30 percent compared to a year ago.