ViacomCBS and Comcast Reach New Carriage Deal

Xfinity to launch CBS All Access App
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ViacomCBS said it reached a new carriage agreement with Comcast that includes retransmission consent for 23 CBS-owned TV stations, including CBS-owned CW affiliates.

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The deal covers CBS’s cable properties and will make the streaming service CBS All Access available to Comcast customers via the Xfinity X1 and Flex platforms later this year.

Financial terms were not disclosed. 

"We view the timing of the announcement--five months earlier than we had been expecting--as an indicator that the economics in the agreement are favorable for CBS," said analyst Vijay Jayant of Evercore ISI. 

"We believe that the prior carriage deal with Comcast, which was signed nearly ten years ago, was one of CBS’s most underpriced distribution agreements and expect the new deal provides for retransmission fees which much more closely resemble current market rates," Jayant said in a research note Wednesday.

The carriage deal is the first since Viacom and CBS were combined late last year. The companies’ announcement did not indicate any changes in the carriage arrangements for former Viacom cable networks.

“We are very pleased to have reached this agreement to continue to bring CBS’ industry-leading entertainment, sports and news content from the CBS Television Network, Showtime, Smithsonian Channel, Pop TV and CBS Sports Network to millions of Xfinity customers, and delighted to offer these customers access via X1 and Flex to CBS All Access for the first time,” said Ray Hopkins, President, U.S. Networks Distribution, ViacomCBS Inc. “We look forward to discussing the entire ViacomCBS portfolio with Comcast in the future.”

The agreement also includes TV Everywhere availability of programming from CBS Television Network and CBS Sports Network to Xfinity customers,

“ViacomCBS has been a great partner, and we are very pleased to have reached this agreement to provide Xfinity X1 and Flex customers with more access to their content across multiple platforms,” said Rebecca Heap, senior VP, Video and Entertainment, Comcast Cable. 

Analyst Jayant thinks the agreement sets up ViacomCBS for future. CBS had been forecasting $2.5 billion in  retrans and reverse compensation revenue by 2020.

"We think one of CBS’s primary objectives in reaching an extension with Comcast had been to align the carriage expiration schedules between the CBS assets and the legacy Viacom assets," Jayant said. "Again, with the extension reached earlier than anticipated, we now think it likely that ViacomCBS will be able to renegotiate all networks co-terminus when the new agreement expires. This dynamic should remove downside risk associated with the next Viacom / Comcast carriage renewal."

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