TiVo shares surge on Verizon settlement

Anticipated $250 million cash infusion gives company bump

TiVo shares surged Monday on an anticipated $250 million cash infusion from Verizon after the two companies settled simmering patent litigation. Deal makes it more likely TiVo will participate in Verizon’s new Redbox Instant service, set to roll out later this year.

TiVo stock rose more than 9% in early trading after TiVo announced the telco will dish out a hefty $100 million upfront, followed by recurring quarterly payments totaling $150.4 million through July 2018. If the two opt to work together by mid-December “on certain commercial projects,” Verizon would get a $29.4 million credit. Pact also calls for Verizon to pay monthly license fees through July 2018 for each Verizon DVR subscriber in excess of certain pre-determined levels.

TiVo said it and Verizon and are exploring a deal that would make content distributed via Redbox Instant — a venture between Verizon and Coinstar’s Redbox — part of the linear and broadband-delivered content available to users of TiVo’s retail DVRs.

As part of the settlement, TiVo and Verizon agreed to dismiss all pending litigation between the companies and signed a deal to cross license their respective patent portfolios in advanced television.

“We are pleased to reach an agreement with Verizon which underscores the significant value our distribution partners derive from TiVo’s technological innovations and our shareholders derive from our investments in protecting TiVo’s intellectual property,” said TiVo CEO Tom Rogers.