Viacom and DIRECTV come to terms


DirecTVA long term agreement said to run seven years will restore 17 Viacom basic cable channels and an additional nine HD versions to satellite MVPD DIRECTV. As per usual, terms of the deal were kept under wraps.

At least one analyst called the deal a likely win for DirecTV.

The channels include Nickelodeon, Comedy Central, MTV, BET, CMT, Logo, Spike, TV Land, MTV2, VH1, VH1 Classic, Palladia, Nick Jr., Nicktoons, TeenNick, Tr3s and Centric, will return to DIRECTV’s channel lineup immediately. DirecTV also has an option to carry Viacom’s EPIX, a movie channel run in cooperation with Lionsgate and MGM. Further, DIRECTV subscribers will have access to the Viacom programming over various wireless devices.

Viacom said in a statement that it “is extremely pleased to bring its programming back to DIRECTV subscribers, and thanks everyone affected by the disruption for their patience and understanding during this challenging period.”

DIRECTV wasn’t quite so upbeat. EVP Derek Chang said, “It’s unfortunate that Viacom took the channels away from customers to try to gain leverage, but in the end, it’s clear our customers recognized that tactic for what it was.” He called for an end to blackouts as a negotiating tactic.
Marci Ryvicker of Wells Fargo said that the key to the deal may have been EPIX – keeping it optional likely means that it will not be part of a basic package, and leaving it out is estimated to amount to a savings of $500M for the satcaster.

The bottom line is that the cessation of hostilities is good for both companies, again with the Wells Fargo edge awarded to DIRECTV. Viacom in particular has already been taking ratings hits and is probably facing a round of makegoods.