Viacom Cuts $500 Million Content, Advertising Deal with Microsoft

Viacom struck a broad agreement with Microsoft which will see the companies team up on advertising, content distribution, event promotions and games over the next several years.

The agreement came just a few hours after Viacom’s MTV Networks unit announced the formation of an MTV Games video game studio with powerhouse Hollywood producer Jerry Bruckheimer.

Viacom said the deal has a projected base value of approximately $500 million in financial considerations and business services between the two companies over the initial five-year length of the agreement. The agreement includes a combination of revenue sharing provisions, guarantees and content licensing agreements.

The Viacom deal with Microsoft will see the software giant license long and short-form TV and theatrical content from MTV, Comedy Central, BET and Paramount Pictures for use on Microsoft properties such as MSN and Xbox 360.

Viacom said Microsoft’s Atlas division will become the ad server for its U.S Web sites, with Microsoft landing exclusive rights to sell remnant display advertising inventory on Viacom Web sites.

In exchange, Microsoft agreed to buy advertising on Viacom broadcast and online networks over a five-year period. Viacom said the companies will develop promotions and sponsorships for MTV Networks and BET Networks awards shows.