Viacom Shares Fall on Analyst Report

Citi’s Bazinet says salad days over, and stock falls 6%

Viacom stock took a hit Monday after Citigroup media analyst Jason Bazinet slapped a “sell” rating on the stock, adding that carriage problems for the programmer will continue.

According to reports, in a note to clients Monday, Bazinet reduced his rating on the stock, adding that he believes the programmer will face “acute” headwinds in its upcoming carriage negotiations with Charter Communications. In his note, Bazinet predicts that Charter will either drop or “significantly curtail” its carriage of Viacom channels.

Viacom shares traded as low as $25.37 in early trading Oct. 9, down 6.6% or $1.78 each and a seven-year low for the stock. The shares rebounded slightly to finish the day at  $25.42 each, down $1.73 each (6.4%).  

Viacom owns about two dozen networks, including MTV Networks, Comedy Central, Nickelodeon, BET, and the recently renamed Paramount Network (formerly Spike TV). In February, Viacom announced a plan to focus on six core channels (MTV, Nickelodeon, Nick Jr., Comedy Central, BET and Paramount).

Charter has tweaked Viacom’s nose on in the past on carriage matters. It reportedly placed the networks on its priciest tier for new customers earlier this year. Viacom CEO Bob Bakish has said he was talking to the distributor about that practice. Charter also began testing a non-sports bundle that also did not include Viacom channels, which Bakish has said he will not contest in court.

But Viacom also has managed to regain carriage in some deals. In May it struck a long-term agreement with Altice USA, whose Suddenlink Communications unit had done without Viacom channels for three years.