DirecTV vs Viacom Dispute is Over

After a feud lasting nine days, Viacom and DirecTV finally managed to reach an agreement last Friday, and thus restoring several popular channel to subscribers, including Nickelodeon, Comedy Central and MTV.

The full details of the new financial deal were not released to the press, but industry sources claim that Viacom managed to gain an increase of more than 20% in the fees paid by DirecTV, raising the amount that Viacom stands to gain to over $600 million each year.

Financial analysts have also said that the new seven year deal brought the fees paid by DirecTv in line with the current market standards. In a statement released earlier this week, DirecTv said that Viacom had actually demanded a 30% increase in fees, while Viacom retorted that their original rates were simply below market standards and that they only asked for a fair deal.

Following this new contract, Viacom shares went up three cents, to $46.68, while DirecTV stock dropped nine cents, to $48.86.

The executive vice president of content strategy and development for DirecTV, Derek Chang, was quoted saying that the sole purpose of this new deal was to obtain market-based rates for DirecTv.

Moreover, the new contract does not stipulate that DirecTv need to provide the Epix movie channel, which is partly owned by Viacom.

One of the main reasons why previous negotiations had reached an impasse was that the mass media giant demanded Epix to be included in DirecTv's offer, although Viacom suggested that different solutions, with or without Epix, had been discussed.

Industry analyst, David Bank, remarked that if Viacom had managed to obtain the inclusion of Epix in DirecTv's lineup, it would have been an "unequivocal victory" on their part. The current deal, however, enables DirecTv to include Epix in their lineup only under specifically negotiated terms.

Viacom Chief Executive Philippe Dauman released an internal memo Firday morning, in which he said that "even the strongest partnerships occasionally hit rough patches... it is important that our distribution agreements reflect the value of our content." The company also released an official statement, which said that "Viacom is extremely pleased to bring its programming back to DirecTV subscribers".