Viacom channels remain on Dish Networks as negotiations continue

Dish Network and Viacom Inc. executives continued negotiations late Wednesday night to try to reach a new carriage agreement for such popular channels as MTV, VH1, Comedy Central, BET and Nickelodeon.

No deal had been reached by the Wednesday night deadline, but talks continued into the night. Viacom channels remained on Dish’s satellite TV system that serves nearly 14 million customer homes nationwide.

“Negotiations continue,” said one person close to the situation.

Earlier Wednesday, Dish Networks Chairman and Chief Executive Charlie Ergen said his company was prepared to live without Viacom’s 18 TV channels -- permanently. But Ergen also sounded a positive note, saying that he saw “a path” to a deal and that the two sides had made some progress in their talks since last weekend.

Dish has nearly 500,000 customer homes in the Los Angeles region.

Wall Street has been keenly interested in the situation because the stakes are high for both companies. The battle could test whether a major pay-TV distributor, in this case Dish, was serious about dropping a group of well-known TV channels -- risking customer defections.

For Viacom, the threat of a Dish blackout has been hanging over the company for months.

Viacom has become more vulnerable in recent years because of declining ratings at its marquee networks, including Comedy Central, MTV and Nickelodeon. (The children’s channel has improved its performance in recent quarters.)

Viacom’s stock has fallen 45% in the last year, and the company could ill afford to lose one of its biggest pay-TV partners.

Wells Fargo Securities media analyst Marci Ryvicker, in a report Wednesday, said Viacom could lose as much as $700 million in annual revenue if Dish were to drop the channels permanently.

Dish would also suffer from a lengthy outage. “We estimate Dish could lose 330,000 to 660,000 subscribers,” Ryvicker wrote.

Earlier Wednesday, during a conference call to discuss his company earnings, Ergen said that Dish was simply trying to hold the line on programming costs that have been rising steadily. Consumers are frustrated by the size of their pay-TV bills.

“We try to protect our customers from two things: One, needless price increases, and two, paying for product that they are viewing other places,” Ergen said.

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Twitter: @MegJamesLAT