Viacom Channels Could Go Dark On DirectTV

Source: William Launder / Market Watch / The Wall Street Journal

Viacom Inc. (VIA, VIAB) channels could go dark for DirecTV Group Inc. DTV -0.78% subscribers at midnight in one of the more-significant recent standoffs over television carriage fees.

The pending blackout further highlighted mounting pressure on Viacom, which has seen its ratings fall off in recent months for top shows like Nickelodeon’s “SpongeBob SquarePants” and MTV’s “Jersey Shore.”

Viacom class A shares fell 2% Tuesday to $49.98, while DirecTV shares slid 0.5% to $48.77.

Viacom is seeking an increase of 30%, or more than $1 billion, in carriage fees, DirecTV said in a statement on its website Tuesday. The country’s second-largest pay-television operator, reaching about 20 million households in the U.S., said it is still “working diligently on a new agreement” to keep Viacom channels available for its subscribers.

In a separate blog post, Viacom said DirecTV is benefiting from “way below market rates” in its 7-year-old deal with the content company, a contract that is “ancient by the standards of the ever-evolving media industry.” According to Viacom, DirecTV has offered a rate that is lower than Viacom receives from any other TV distributor.

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