×
You will be redirected back to your article in seconds

Viacom, DirecTV Make Progress in Contract Talks, No Blackout After Deadline Passes

UPDATED: Viacom and DirecTV executives went down to the wire Friday on a combative contract renewal negotiation with high stakes for both sides. The companies stayed in talks past the midnight Eastern contract expiration and the channels stayed up on AT&T’s platforms. Sources indicated early Saturday that the threat of a blackout had been averted.

A team of Viacom executives led by Tom Gorke, exec VP and head of distribution and business development, have been parked in DirecTV’s El Segundo headquarters since Wednesday. The companies are wrangling over a carriage renewal pact for Viacom’s 23 cable channels.

On Tuesday afternoon, Viacom launched an aggressive PR campaign to warn viewers that Nickelodeon, MTV, Comedy Central, BET, VH1 and other channels could go dark as of Saturday if the sides can’t come to terms. Viacom enlisted a number of stars across its channels to pitch the companies case in short digital videos spread via YouTube and others.

Viacom needs to get a healthy renewal deal from AT&T’s DirecTV, the nation’s largest MVPD with about 24.5 million subscribers (including U-verse), in order to provide stability for its future earnings. If DirecTV slashes Viacom’s rates and the volume of channels carried, Viacom would take a huge hit and face similar rollbacks from rival MVPDs such as Comcast and Charter. Viacom, in the midst of a turnaround after a long slump, can’t afford to shoulder that kind of setback. DirecTV and streaming bundle DirecTV Now at present carry 17 of Viacom’s channels; its U-verse sibling carries the full freight of 23 (or 24 depending on who’s counting).

DirecTV, meanwhile, has every incentive to push Viacom hard on a rate reset because the satcaster is grappling with a shrinking subscriber base, coupled with AT&T’s need for reliable earnings to shoulder its $170 billion-plus debt load that spiked last year with the $85.4 billion purchase of Time Warner. DirecTV’s performance has been flagging since AT&T bought the satcaster for $49 billion in 2015.

DirecTV has a number of big renewals with top programmers in the months ahead, including CBS, Viacom’s corporate sibling under the Redstone umbrella, and the newly enlarged Disney. There’s no doubt the company wants to send the message in the Viacom talks that it intends to hammer down at programming cost increases amid the gyrations in the pay-TV marketplace.

DirecTV has leverage with its status of serving viewers nationwide and Viacom’s reliance on an estimated $1 billion in annual licensing revenue that it receives from the satcaster. At the same time, a lengthy blackout of staples such as Nickelodeon, MTV, Comedy Central and BET would raise hackles with subscribers and would likely accelerate DirecTV’s steady quarterly subscriber losses. DirecTV and Viacom previously went through a nine-day blackout in a renewal standoff in 2014.

More to come

 

More TV

  • Prince Albert II of Monaco (C),

    Jessica Alba, Gabrielle Union's 'L.A.’s Finest' Opens Monte Carlo TV Festival

    Prince Albert II of Monaco opened the 59th Monte Carlo Television Festival on Friday at a glittering ceremony at the principality’s Grimaldi Forum attended by Gabrielle Union and Jessica Alba. The Hollywood actresses presented the French premiere of their action cop series “L.A.’s Finest,” which has just been renewed for a second season. “You typically [...]

  • Gabrielle Union and Jessica Alba'L.A.'s Finest'

    Jessica Alba, Gabrielle Union Speak About Horrific 'L.A.’s Finest' On-Set Accident

    Actresses Gabrielle Union and Jessica Alba spoke about how the horrific accident on the set of their action cop series “L.A.’s Finest” affected them and the crew at the 59th Monte Carlo Television Festival Saturday. They also paid tribute to the main victim of the incident, executive producer/co-showrunner Brandon Sonnier, whose leg was amputated below [...]

  • Emmys: How a Social Media Campaign

    How a Social Media Campaign to Game the Emmys Led to This Week's 'Block Voting' Scandal

    The Television Academy’s “block voting” controversy has quickly become the talk of Emmy season — and that appears to have been the org’s point. According to multiple insiders, the number of people disqualified from voting in this year’s competition is believed to be small, only around three members (out of nearly 25,000 members overall). But [...]

  • No Merchandising. Editorial Use Only. No

    TV News Roundup: Hulu Drops Trailer for 'Veronica Mars' Revival (Watch)

    In today’s roundup, Hulu dropped the official trailer for the “Veronica Mars” revival and HBO revealed more cast members for “Lovecraft Country.” FIRST LOOKS Hulu has dropped the official trailer for its revival of “Veronica Mars,” set to premiere on July 26. The series will bring back most of the original cast, including Kristen Bell, Jason [...]

  • Dan Stevens

    'Legion' Star Dan Stevens Says His Character Would Fight Thanos, 'Wreak Havoc' in MCU

    Dan Stevens said his powerful, telepathic mutant Legion would do some serious damage if he ever crossed over from the eponymous FX series into the Marvel Cinematic Universe. “Legion would wreak havoc. He’d probably take on Thanos, let’s see that,” he told Variety on the red carpet at the premiere of the trippy, mind-bending superhero series [...]

  • Viacom CEO Bob Bakish

    Bob Bakish Talks Pluto TV, Netflix and CBS-Viacom Merger Rumors

    Viacom CEO Bob Bakish knows that a lot of his peers are in the original content space in streaming, but he believes the company’s ad-supported free service Pluto TV is better off relying on Viacom’s library of content. “We can debate a lot of things about the future, but in the near term, the opportunity [...]

More From Our Brands

Access exclusive content