![Viacom](https://cdn.statically.io/img/deadline.com/wp-content/uploads/2019/01/rexfeatures_7882396a-1-e1557534651345.jpg?w=681&h=383&crop=1)
UPDATED with closing prices. Shares in Viacom, which have had an up-and-down 2019, jumped 4% to close at $26.32 on the news in the pre-dawn hours that the company reached a new carriage deal with AT&T.
Trading volume was more than twice the normal average, with shares generally ranging between $26.50 and $27 as investors reacted to the new contract. The upward momentum is a relief to Viacom investors after some recent trading sessions when the company’s 52-week low of $23.31 has not felt entirely out of reach.
AT&T shares, meanwhile, slipped 1% to $30.77.
Investors are registering their relief at the avoidance of a blackout of 23 Viacom networks 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 Friday’s deadline, with an estimated $1 billion in carriage fees hanging in the balance.
As part of the usual jousting over carriage renewals, 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 then 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 DirecTV Now. The basic tier sheds networks owned by Viacom and other companies.
Viacom’s controlling shareholder, National Amusements, also controls CBS Corp. While National Amusements agreed in a legal settlement last year not to initiate merger talks until 2020, Viacom and CBS are expected by most Wall Street analysts to resume discussions soon, which they are permitted to do of their own volition. CBS is currently focused on finalizing its permanent CEO selection, while Viacom is working on its turnaround, more than two years after its CEO, Bob Bakish, took the helm.
Carriage deals like the one just reached with AT&T have been a major priority for Bakish, given the deterioration of relationships with distributors under his predecessor, Philippe Dauman. Viacom also acquired PlutoTV, a free, ad-supported streaming bundle that gives it another long-term platform where it can emphasize not only programming but direct-to-consumer distribution.