Viacom is not planning to sue Charter Communications for moving some of the Viacom networks onto less popular tiers.
During Viacom’s earnings conference call, analyst Rich Greenfield of BTIG Research, noted that Charter's action, and its decision to launch a non-sports tier without Viacom networks, had depressed Viacom stock. Greenfield noted that Viacom hadn’t sued Charter and asked if Viacom CEO Bob Bakish’s predecessor had signed a contract that actually allowed the Viacom networks to be moved.
Bakish replied that Viacom has a “strong point of view they don’t have the contractual right to tier our service the way they have” and that the documents have been reviewed by outside counsel.
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But Bakish added, “I don’t fundamentally believe suing big customers is the way to solve problems. I think the better way to solve it is through engagement and exploring ways we can create value together. And that’s what we’re focused on.” At this point, Bakish said he doesn’t see the situation getting resolved until the current deal with Charter expires and a new deal is negotiated.
Greenfield said he thought that the deal expired at the end of the year, but Viacom executives declined to confirm that.
“Rest assured we’re focused on it because we understand it has caused consern, which has likely affected the value of our stock,” Bakish said.
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Viacom chief financial officer Wade Davis added that Viacom reserves the right to try to enforce the current contract.
Greenfield asked if in a consolidating TV world if Viacom and its owners would reconsider merging with CBS to gain clout with distributors, but Bakish said that was not his call to make.
Bakish pointed to a more positive dealing with distributors by noting that under a new agreement with Altice, Viacom networks would be returning to the Suddenlink systems that Altice acquired this month. Bakish said he expected the Viacom network to penetrate about 90% of Suddenlink subscribers.
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