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Why AT&T’s Carriage Deal Is Important for Viacom

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AT&T-Viacom contract

AT&T (T) and Viacom (VIAB) have renewed their programming contract to air around 23 Viacom channels including MTV, BET, Comedy Central, and Nickelodeon, on AT&T’s DIRECTV platform. Their earlier contract expired on March 22, where AT&T’s DIRECTV and streaming service DIRECTV Now carried 17 of Viacom’s channels, while its U-verse service had all 23 Viacom channels. Earlier in 2014, DIRECTV suffered a blackout of Viacom channels for nine days.

Impact on Viacom

The renewal deal with AT&T was significant for Viacom, which is struggling to produce consistent earnings. AT&T is Viacom’s largest distributor and has a total video subscriber base (including U-Verse subscribers) of 24.5 million. AT&T has also contributed nearly 15% of the company’s 2018 annual revenues. AT&T has reportedly been paying about $1 billion as carriage fees for Viacom channels.

In 2017, Viacom also settled a carriage fee dispute with Charter Communications (CHTR) and renewed the contract with a 15% decline in rates. However, as per reports, Viacom’s board was seeking to merge with CBS (CBS) in a distribution contract if AT&T and Viacom did not reach a deal.

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