Viacom, hardly the most popular programming content provider among small U.S. cable operators, is spending $757 million to buy a little love on the other side of the ocean.
The owner of MTV and Comedy Central, among other cable channels, said in a press release it would fork out more than three quarters of a billion dollars to acquire Channel 5 Broadcasting, "one of British television's biggest brands and the only commercial public service broadcaster to consistently grow viewership share in recent years."
Viacom has been in the news--and not in a positive way--in the U.S. recently after cutting a new programming deal with the National Cable Television Cooperative (NCTC), the buying group for small cable operators. The terms of the deal led some small operators--led by Cable One--to drop Viacom channels. Viacom in turn blocked Cable One subscribers from accessing its channels online.
Viacom enters the U.K. market without that baggage and with the opportunity to perhaps expand its British-built content back across the Atlantic to U.S. consumers.
"This deal will dramatically increase Viacom's investment in content produced in the U.K. which has a widely admired public service broadcasting culture and a globally influential production sector," Viacom President-CEO Philippe Dauman said in the press release. "We look forward to partnering with local producers to introduce more U.K.-created content to global audiences and will continue to explore opportunities in the U.K. both in the free-to-air and pay television markets."
Concurrent with the acquisition, Viacom also announced fiscal second quarter earnings revenues of $3.17 billion; a 1 percent year-over-year increase that the company said reflected "higher affiliate fees and advertising revenues."
"Our media networks remain in high demand, commanding a premium position with advertisers and achieving significant continued growth with both traditional and emerging distribution partners," Dauman said in an earnings press release.
The company did not break out earnings attributable to affiliate fees, but did note that a 3 percent increase in operating income to $872 million was attributable "primarily to higher media networks revenues."
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