You guessed it: Viacom and Time Warner settle

January 2, 2009

Who was the big winner in the Time Warner Cable-Viacom dispute? A few newspapers, it seems, since they got a little extra holiday cash when Viacom decided to take out some advertisements and take their fight with the cable operator public.

Otherwise, the outcome is what many expected: the two sides reached a deal and nobody missed a single episode of “The Hills” or “Dora the Explorer.”

Indeed, here’s what Bernstein analyst Michael Nathanson predicted on New Year’s Eve, just when the fight between Viacom and Time Warner over fees was really heating up:  “As has been the norm, we would expect a settlement — terms undisclosed — in a relatively quick manner, as both sides may not want to see if this battle results in mutually assured destruction, as Viacom loses ad dollars and Time Warner loses subscribers.”

So what happened after a buildup that included advertisements splashed across newspapers like The New York Times and LA Times, leaflets passed out in Times Square, several increasingly snarky press releases from the companies accusing one another of being stubborn?

Nothing much, frankly.

The two sides reached a deal and issued this statement and a quote from their respective CEOs. “Time Warner Cable and Viacom jointly announced this morning that they have reached an agreement in principle to renew carriage for Viacom’s MTV Networks. The companies expect to finalize the details of the agreement over the next several days.”

But all this doesn’t mean that the disagreement wasn’t a big deal. Just the opposite. That Viacom and Time Warner would go to such lengths to make their fight public indicates just how much is at stake right now — both in terms of dollars and precedent — in these deals. Expect more to come.

Keep an eye on:

  • U.S. album sales slid for a seventh time in eight years in 2008 as growth in the digital arena, one of the few bright spots in the ailing music industry, slowed (Reuters)
  • Newspapers have increasingly sought to mitigate  staff cuts with alliances and partnerships with former rivals (Editor & Publisher)

(Reuters photo of spectators watching as a Dora the Explorer balloon floats in the Macy’s Thanksgiving Day Parade)

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