Trading volume was initially lighter than average, but shares ranged between $26.50 and $27 as investors reacted to the new contract. The upward momentum is a relief to Viacom partisans after some recent trading sessions when the companys 52-week low of $23.31 has not been out of reach.
AT&T shares slipped a fraction to $30.88, in line with moderate declines in the overall markets.
Investors are registering their relief at the avoidance of a blackout across 24.5 million households that get DirecTV, DirecTV Now, AT&T Watch and U-Verse cable. Viacom had been girding for battle ahead of Fridays deadline, with about $1 billion in carriage fees hanging in the balance. The company issued a pointed statement accusing AT&T of abusing its enhanced reach after its acquisition of Time Warner (AT&T responded by calling Viacom a “serial bad actor” in negotiations.) Viacom soon started running ads across Comedy Central, Nickelodeon and other networks warning viewers about the looming deadline. While an impasse would have been damaging for Viacom, AT&T also risked exacerbating recent subscriber losses across its pay-TV portfolio, which could have increased investor concern about its market position.
“We are pleased to announce a renewed Viacom-AT&T contract that includes continued carriage of Viacom services across multiple AT&T platforms and products,” the companies said in a joint statement.
Programmers like Viacom, Discovery, AMC Networks and A+E Networks have faced challenges in the re-bundling pay-TV landscape, given that their content is not generally watched live. That means linear ratings have flagged and advertising revenue for many companies have softened. The week before the Viacom deadline on DirecTV and U-Verse, AT&T made news by announcing a new two-tier structure for internet-delivered skinny bundle DirecTVRead More – Source