Dish Network Corp. and Viacom Inc. reached an agreement on new payment terms that will keep channels such as Comedy Central, MTV and Nickelodeon on the satellite-TV service and make them available on Dish’s online Sling TV service.
The companies came together on a deal after an extended negotiation, according to a statement Thursday, averting a threatened blackout for Dish’s 14 million subscribers. The agreement covers all 18 Viacom channels, including VH1, Spike, BET, CMT, TV Land, Nick Jr. and Nicktoons. Financial terms weren’t disclosed.
Viacom’s networks will also be carried on Dish’s Sling TV streaming services in the coming months, the companies said.
“The deal certainly takes away the most major bear case on this name,” Stifel Nicolaus & Co. analyst Benjamin Mogil said in a research note. He has a buy rating on the stock.
Disputes between pay-TV providers and media companies over subscriber fees have intensified in recent years. Program suppliers seek higher carriage fees to offset rising production costs and sluggish ad revenue. TV distributors such as Dish have been battling rising content costs that drive customer bills higher and push subscribers to cheaper alternatives such as streaming videos from Netflix and Amazon.com.
In its threat to pull its channels, New York-based Viacom said its shows account for about 20 percent of viewership on Dish and that the satellite service would suffer more customer losses as viewers find the programs on other outlets.
“Neither side can afford not to do a deal,” said Doug Creutz, an analyst at Cowen & Co., who has a market perform rating on the stock, the equivalent of a hold.
Viacom will be at risk in future negotiations if it doesn’t improve the performance of some of its channels, Creutz said.
Dish Chairman Charlie Ergen said Wednesday that he saw a path to an agreement and threatened to black out Viacom channels permanently if a deal wasn’t reached.
