Viacom, Dish Reach Carriage Agreement

Multi-year deal avoids blackout of 14M Dish customers, includes Sling TV carriage
Dish logo  400x300.jpg

Hours after its official midnight deadline expired, Viacom and Dish Network said they have reached a multi-year carriage agreement, avoiding a blackout of the satellite TV company's 14 million subscribers.  The deal also includes carriage of select Viacom networks on Dish's over-the-top service Sling TV, which was a key part of the negotiations.

"We appreciate Viacom's willingness to continue with us on our journey as we work to deliver the best, most innovative television services available," Dish chairman and CEO Charlie Ergen said in a statement. "This creative, bold and consumer-friendly approach extends a nearly 20-year-old relationship."

Viacom networks were scheduled to go dark at 11:59 p.m. last night. The deadline passed without a deal but the two companies continued to talk, hammering out an agreement just hours later. There was no loss of service to Dish customers during the negotiation.  

Ergen had hinted during Dish's first quarter confernce call that a deal could be close, adding that he saw a "path to carriage" this week that he hadn't seen in prior negotiations. While pricing was an initial sticking point in the deal, Ergen said on the call that if the final negotiations came down to merely dollars and cents issues, he would rather do business with more "forward looking" companies.

That seemed to mean that Sling TV carriage would be a key part of the talks. In naming forward thinkers on the call, Ergen pointed to Disney and Fox Networks Group, each which have deals with the OTT service.

Viacom networks, including Comedy Central, BET, Spike, MTV, Nick Jr. and many others, will be available on Sling TV's single-stream and multi-stream services in coming months. Specific packaging details were not announced.

The renewal applies to the 18 Viacom channels Dish currently carries, including Nickelodeon, Comedy Central, MTV, VH1, Spike, BET, CMT, TV Land, Nick Jr., and Nicktoons.

"Today's agreement ensures Viacom's number one family of networks will continue to be available to our millions of fans on Dish and underscores the value of our programming across platforms," said Viacom Executive chairman, president, and CEO Philippe Dauman in a statement. "Dish has historically been and remains an important partner for Viacom, and as part of our commitment to entertain audiences wherever they are, we are pleased to offer select Viacom networks as part of Dish's Sling TV product. Today's renewal, together with several additional affiliate agreements announced over the past year, will enable Viacom to drive growth and deliver better, more engaging viewer experiences for years to come."

News of the deal should give Viacom shareholders relief. The stock was up about 5% on Wednesday after Ergen's comments and soared 9% ($3.41 per share) to $40.70 each in early trading Thursday. Analysts had feared that losing Dish for any length of time would affect future carraige deals with other distributors and set the stage for continued pushback against other content companies concering the high cost of programming. 

Dish was also incented to do a deal after losing about 23,000 pay TV customers in the first quarter, a loss that was tempered by gains in the Sling TV service. MoffettNathanson principal and senior analyst Craig Moffett estimated that Dish lost about 158,000 satelliteTV customers in the quarter, offset by a gain of 135,000 Sling TV subscribers. Som analaysts had predicted that losing Viacom could result in as many as one-third of Dish customers heading for alternative providers.