Viacom Says Charter Would Pay Less Under Its Proposals

Cable company could pass savings to subscribers, programmer says

Viacom, facing being kicked off Charter Communications’ cable systems when its distribution agreement expires on Oct. 15, says that under the proposals it has made Charter would pay less for Viacom’s channel than it currently pays.

"To be clear, the offers we have made would cost Charter less than they pay today, enabling them to pass these savings on to Spectrum subscribers,” Viacom said in a statement on its website Thursday.

Related: Analyst says Charter dispute puts $1.4B at risk for Viacom

Charter had no comment on Viacom’s assertion.

Charter acquired Time Warner Cable, which is larger than Charter and in general paid lower rates to programmers. Charter is reportedly seeking to lower its rates to Time Warner levels in the new agreement.

Analysts said they believe Viacom is willing to accept a lower rate in returned for carriage of its flagship networks on Charter’s most-popular tier of service. Those Viacom networks include MTV, Nickelodeon, Nick Jr., BET, Comedy Central and Spike, which will become the Paramount Network in January.

AT&T set a similar rate reset after it acquired DirecTV, which had more subscribers and paid lower rates.

“We believe this [Viacom-Charter-Time Warner Cable] price gap is notably less than the AT&T/DTV reset in 2015,” said Alexia Quadrani of J.P. Morgan.

“While price is always a key point of negotiation, the bigger dispute appears to be Charter’s unwillingness to allow Viacom to pursue a skinny package,” Quadrani added.

Viacom CEO Bob Bakish has talked about the opportunity for Viacom to stream its programming as part of a low-priced entertainment bundle that would be comprised of networks that do not have expensive sports rights.