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Viacom Prepares to Get Dropped By Dish Network

Viacom says it is disappointed that Dish is not negotiating a carriage renewal in a "serious" way and is informing viewers who are Dish subscribers they could lose the channels in the near future.

"Dish has made demands that are designed to be impossible to meet in order to take our negotiations public and likely force our programming off the air," Viacom said.

Viacom's carriage agreement with Dish ended earlier this year. Viacom has granted multiple extensions while negotiations continue.

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Dish said that Viacom unilaterally elected to terminate an indefinite contract extension Wednesday night. It said Viacom was seeking millions of dollars woth of increases despite declining ratings.

Dish said it will continue to negotiate in good fath.

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Dish is a key distributor for Viacom and losing its 11 million subscribers would be damaging financially. Viacom stock has been among the poorest performing media stock in part because investors are concerned about the impact should networks like MTV, Comedy Central and Nickelodeon get dropped.

In midday trading Tuesday, Viacom stock was down 9%.

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Viacom cannot afford to lower its rates to satisfy Dish because "most favored nation" clauses in its other distribution contracts would force it to lower the rates it charges other distributors. But Viacom said it has offered Dish terms as good as larger distributors, with additional services and features for their customers.

Viacom has started to run crawls under its networks' programming letting viewers know about the state of negotiations.

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The programmer says that this is "par for the course for Dish, which has deliberately derailed ten renewal negotiations since last year by engaging in unproductive discussions and contentious public battles."

Viacom said Dish's approach "is a clear example of DISH's disregard for their customers, who will be subjected to another unnecessary disruption in service. In addition to depriving our fans of our networks and programming, Dishis further undermining their fundamentally disadvantaged business by driving their subscribers to switch to a different provider."

In a statement Dish said: "We regret that Viacom has chosen to involve customers in a business negotiation when time remains to reach an agreement."

The satellite company said that "Viacom is asking hundreds of millions of dollars in increases, despite the changing landscape  that includes drastically reduced viewership of Viacom channels and wide availability of their content across multiple platforms, frustrating consumers who don't want to pay twice for the same content."