Viacom and Charter Communications said they have reached an agreement in principle that will prevent Viacom's cable channels from being blacked out on the nation's second-largest cable operator.
"Viacom and Charter have reached an agreement in principle. Spectrum subscribers will continue to have access to Viacom’s networks, without disruption, while we finalize terms," the companies said in a statement Tuesday evening.
With their previous agreement due to expire Sunday, the two sides said they reached a temporary extension.
There was no early word on how many of Viacom's cable channels will continue to be widely distributed by Charter. Or how how much Viacom will be receiving in carriage fees.
Last week, Viacom's stock got hammered as the deadline approached and it appeared possible that Charter would stop carrying the Viacom channels, which include Nickelodeon, MTV, BET and Comedy Ceentral.
One analyst estimated that losing Charter carriage would cost Viacom about $1.4 billion annually in subscriber fees and advertising revenue. Other analysts said getting dropped was unlikely because Viacom's networks are watched by a big share of cable subscribers.
Viacom has said that under its proposal Charter would pay less for the Viacom channels. Charter was seeking a lower fee because it acquired Time Warner Cable. Time Warner Cable had more subscribers than Charter and was able to secure a better rate. Charter had been seeking a rate similar, if not lower than, Time Warner Cable's rates.sports
According to analysts, another sticking point in the negotiations was that Viacom wanted to be able to include its channels in a low-cost skinny bundled of entertainment netowrks that would be free of the networks that carry sports.
Achieving more constructive relaionships with its distributors was a key part of the new Viacom CEO Bob Bakish's turnaround plan for the struggling media company. Bakish has also focused on trying to turn around the ratings story, particluarly at what he calls the company's six flagship networks.
Lower viewership at the networks has translated into lower ad revenue and lower earnings at Viacom for the past couple of years.
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