Charter Communications and Viacom have agreed to a short-term carriage extension, avoiding a blackout upon the expiration Sunday of their current deal.
Viacom released a statement saying that the cable operator “has agreed to a short-term extension of our renewal deadline with Charter while we work to reach a mutually beneficial deal.”
Charter declined comment.
Meanwhile, an analyst note from Telsey Advisory Group's Tom Eagan, obtained by Multichannel News, warned that any price cuts agreed to by Viacom could trigger so-called "most favored nation" clauses in other contracts the media conglomerate has with pay-TV operators.
“By early this week, we expect the contract will be renewed,” Eagan said in a note to investors. “But, we also expect it will be renewed at lower rates and for fewer channels. We expect this deal will translate to lower domestic affiliate revenue and a lower value for Viacom equity holders.”
Struggling mightily in the SVOD age, Viacom has found a little momentum under new CEO Bob Bakish. But an impasse with the No. 2 cable operator in the U.S., which controls around 16.6 million video subscribers, threatens to set the media conglomerate back.
Viacom controls MTV, BET, Spike TV, Nickelodeon, VH1 and Comedy Central, among other linear channels.
Last week, the conglomerate began running messages on its channels in Charter homes, informing viewers that Viacom channels will be taken down unless the cable company agrees to what it says are its very reasonable program licensing terms.
Bakish, meanwhile, said in a company memo that Charter is putting the screws on programmers who sign programming deals with virtual MVPDs in an effort to thwart the nascent distribution trend.