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AT&T, Viacom Strike Contract Renewal And Avoid Potential Blackout

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AT&T, Viacom Strike Contract Renewal And Avoid Potential Blackout

Viacom, Inc. (NASDAQ: VIA) and AT&T Inc. (NYSE: T) reached an agreement Monday morning to extend a carriage deal after the prior contract ended Friday.

What Happened

Viacom and AT&T continued to negotiate over the weekend carriage of Viacom's networks on AT&T's DirecTV, U-verse and WatchTV platforms, Deadline reported. Despite the prior contract expiring Friday at midnight, Viacom's channels were still running as normal and Viacom stopped running a crawl on its networks cautioning its customers of a potential blackout in the near term.

A crisis was averted as the two companies reached an agreement that would give AT&T customers "more choice" and "improved value," according to Deadline's Peter White. As part of the agreement, all of Viacom's channels will continue broadcasting uninterrupted on AT&T's multiple services. It's unclear if the agreement includes AT&T's skinny bundle, DirecTV Now.

Why It's Important

A blackout would have had negative consequences for Viacom who continues to struggle with rating declines and leadership problems. But on the other hand, the deal reportedly involves a reduction in the $1 billion of fees AT&T pays Viacom to carry its content

The two companies said in a statement additional details will be announced in the "near future."

Viacom's stock traded higher by 4.5 percent to $26.49 per share Monday morning.

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