AT&T, Viacom’s largest distributor, opined that Viacom’s channels are no longer as popular as they once were; AT&T was responsible for 15% of Viacom’s 2018 revenues. Although the terms of the deal have been disclosed, it would not be very far fetched if Viacom had to pay a tidy premium to renew the contract.
In a development that bodes well for DirectTV watchers, Viacom Inc has renewed its carriage contract with AT&T Inc thus avoiding a blackout of Comedy Central, MTV, and Nickelodeon.
According to sources familiar with the matter at hand, Viacom had to resolve the AT&T contract before considering any other strategic moves, including a potential tie-up with CBS Corp.
With the news reaching the market, shares of Viacom rose nearly 4% to $26.30 before the opening bell; AT&T’s shares were also marginally higher.
“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,” said both companies.
Although the initial deadline to arrive at a new contract was March 22, negotiations continued past the deadline.
Such conflicts have become increasingly common with viewers shifting from traditional pay TV services to streaming services such as Netflix Inc and Amazon’s Prime Video.
Case in point: in November 2018, AT&T-owned premium cable network HBO stopped being carried on Dish’s satellite television service after failing to reach a new agreement. Last week, Viacom had accused AT&T of abusing its powers after buying Time Warner Inc.
AT&T has said Viacom’s channels are no longer as popular as they once were, and accused them of being a “serial bad actor” in contract renewal negotiations.
AT&T is Viacom’s largest distributor, representing 24.5 million total video subscribers, and was responsible for about 15% of Viacom’s 2018 revenue.