AT&T’s DirecTV has said it was going to play hardball when negotiating what it pays to TV networks to carry their channels. And apparently it is living up to its word. In its recent deal with Viacom, the owner of MTV, Comedy Central and Nickelodeon agreed to take less money. The haircut was a percentage rate as high as the high teens, according to The Wall Street Journal.
The cut shows how hard it is for entertainment companies without live sports and news to get paid for their networks as more people cancel their cable and satellite subscriptions. Despite the price cut, Viacom reaffirmed it would see growth in revenue from distributors this year, largely due to the creativity of its CEO Bob Bakish, who has managed to sign new types of deals for Viacom, such as one recently with T-Mobile.
Investors certainly will have more questions about this tomorrow during Viacom’s earnings call. But even more so, they will want to know what this news could mean for negotiations between CBS and Viacom, which are expected to merge.