Viacom And AT&T Reach New Carriage Deal, Avert Blackout

(RTTNews) - Viacom Inc. (VIAB, VIA) and AT&T Inc. (T) said Monday they have reached a new carriage deal, averting a programming blackout that would have left AT&T's more than 24 million pay-TV customers without Viacom channels such as MTV, Comedy Central, Paramount and Nickelodeon.

The renewed agreement will keep these Viacom channels on AT&T's DirectTV and U-verse pay TV services. Shares of Viacom are rising more than 4 percent in the regular trading session following the announcement.

"We are pleased to announce a renewed Viacom-AT&T contract that includes continued carriage of Viacom services across multiple AT&T-DirectTV platforms and products. The deal brings AT&T customers more choice and improved value for Viacom content," the two companies said in a joint statement.

The earlier contract between AT&T and Viacom expired at midnight Friday, March 22. Despite missing the deadline, the companies continued to negotiate. As of Sunday, Viacom's channels were still on the air as the two companies continued to negotiate.

Viacom had enlisted stars such as Trevor Noah, Pauly D and Lindsay Lohan to urge viewers on their social media channels to contact AT&T as well as DirecTV to ensure continued carriage of the Viacom channels.

Last week, Viacom had accused AT&T for its unwillingness to engage in constructive negotiations, noting that AT&T's action could force a disruption in service. Further, the company said AT&T was abusing its new market position by favoring its own content, which according to Viacom, "significantly underperformed" its own content.

"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. Especially troubling, AT&T-DirecTV is marginalizing diverse audiences in its new DTV packages and threatening to do the same with their existing products," Viacom said.

Cable and satellite television providers enter into agreements with programmers to carry their content. On expiry of these contracts that typically run for a number of years, they enter into new agreements, with programmers trying to renegotiate their agreements at a higher price.

In December 2018, Verizon and Walt Disney Co. (DIS) reached a broad-based distribution agreement prior to the expiry of their contract on December 31, avertingd a blackout and enabling Verizon Fios customers to continue watching ESPN, Disney Channel, ABC and other channels owned by Disney.