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Dauman: DirecTV Deal Better for Viacom

8/03/2012 1:54 PM Eastern

Although they ended their nine-day stand-off weeks ago, DirecTV and Viacom continue to trade barbs over their July 20 carriage deal.
DirecTV and Viacom were no strangers to trading insults during the height of their negotiations - Viacom even blocked Internet access to some of their shows during the impasse after DirecTV began marketing the Web as an alternative to watch the programming giant's shows. They reinstated them less than a week later. And after the dust cleared and a deal was reached, it appeared that the two sides had kissed and made up.
That apparently is not quite the case.
DirecTV fired the first - albeit vaguely tempered - first shot shortly after the deal was reached, claiming it held fast to its plan to pay a fair rate, adding that although the first year of the multi-year deal included a higher than usual increase it was mainly because DirecTV was paying below market rates in its old deal. The remainder of the seven-year deal, according to DirecTV executive vice president of content strategy and development Derek Chang included moderate increases that were lower than Viacom had offered anyone else.
At the time, Sanford Bernstein media analyst Todd Juenger estimated that the deal included a 20% increase in the first year and 5% increases thereafter.
On Friday, Viacom CEO Philippe Dauman added his two cents, basically refuting DirecTV's claim that the agreement was favored toward the satellite giant.
"In the current quarter we successfully completed a challenging renewal negotiation with DirecTV, tracking a long- term agreement with an initial rate increase of significantly more than 20% and healthy annual increases in excess of those we had in the expired deal for the remainder of the seven year term," Dauman said on a conference call with analysts to discuss fiscal third quarter results. "In fact the deal we ultimately signed was materially better for Viacom than the deal that was on the table at the time DirecTV made the unfortunate decision to drop our networks."
DirecTV called shenanigans on Dauman, claiming his characterization was off the mark.
"Those comments are false on both fronts," DirecTV said in a statement. "The final deal we made was better for DirecTV than anything Viacom previously put on the table and it is indeed Viacom who shut off our receivers for each Viacom channel and sent us a letter telling us to take the channels down or face legal action. Those in the industry who followed the dispute know the truth. DirecTV will continue to fight aggressively for our customers against greedy, and in this case, untruthful content providers, who use the unnecessary and failed tactic of taking their content away from their own viewers as means to extract more money from consumers' wallets, which is deplorable during tough economic times."

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