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DirecTV, Viacom Avert Blackout After Marathon Negotiation

DirecTV and Viacom have agreed on a carriage renewal pact covering a raft of Viacom’s cable channels after a marathon negotiation over the weekend.

In a joint statement early Monday, the companies said: “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 deal also brings AT&T customers more choice and improved value for Viacom content.”

AT&T is the nation’s single-largest MVPD, with DirecTV, DirecTV Now, Watch TV and U-verse platforms adding up to 24.5 million subscribers. The renewal was make-or-break for Viacom as the company tries to add to its turnaround momentum. DirecTV in recent years has paid Viacom an estimated $1 billion a year in carriage fees — and nearly the same amount in advertising expenditures for AT&T and DirecTV.

“I’m very happy to share that we’ve just announced a renewed and expanded Viacom/AT&T-DirecTV partnership that includes continued carriage of Viacom services across AT&T-DirecTV’s platforms and products,” Viacom CEO Bob Bakish said in a note to staff. “As a result, our programming will continue to be available to AT&T-DirecTV subscribers without disruption. We expect to announce additional details of our partnership in the coming weeks, and I will of course keep you posted.”

DirecTV had most of the leverage, but the satcaster couldn’t afford to alienate more subscribers by dropping cable staples like Nickelodeon, MTV, Comedy Central and BET at a time when it is facing fierce competition for low-cost pay-TV services from streaming platforms and new forms of skinny bundles from cable rivals. DirecTV parent company AT&T is also under pressure to deliver consistent earnings in the near term to help the company shoulder its $170 billion debt load.

Viacom’s previous contract expired at midnight ET March 22. Executives from Viacom, led by distribution chief Tom Gorke, camped out at DirecTV’s El Segundo headquarters as of March 20 to hammer out a deal, but not before launching an aggressive PR campaign against DirecTV to warn viewers of the potential for the channels to go dark. The sides were in negotiations for hours on Friday night into Saturday morning. They resumed later on Saturday and Viacom dropped the crawl graphic warning of the possible shutoff that popped up on the DirecTV feeds for Viacom channels in the afternoon of March 19.

The tension around the Viacom-DirecTV carriage reflects the broader strain in the traditional pay-TV ecosystem as consumers flock to low-cost streaming alternatives such as Netflix, Hulu and Amazon.

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