Cablevision Sues Viacom On Antitrust Violations

Cablevision Systems Corporation (NYSE:CVC) has filed a lawsuit against Viacom, Inc. (NASDAQ:VIAB) (NASDAQ:VIA) claiming antitrust violations. The lawsuit was filed in a Manhattan court. The details of the complaint were not immediately available because of a sealing order requested by Cablevision.

Cablevision Sues Viacom On Antitrust Violations

The story originates from Bloomberg. According to a statement from Cablevision Systems Corporation (NYSE:CVC), the company seeks a voiding order on an agreement it made with Viacom, Inc. (NASDAQ:VIAB) (NASDAQ:VIA) in December of last year. The agreement concerned the alleged force used by Viacom in order to secure the broadcast of some of its less popular television channels.

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Cablevision Systems Corporation (NYSE:CVC) says that the channels in question are not demanded by its customers, but Viacom made the carriage of its less popular channels a condition of the availability of its major networks. According to Cablevision, the company acted improperly, forcing it to take content it did not want.

Viacom, Inc. (NASDAQ:VIAB) (NASDAQ:VIA) disputes the antitrust case. In a statement the company said that it offers discounts to cable providers who agree to offer more of its channels for broadcast. The firm’s spokesman, Jeremy Zweig, said that the suit was a transparent attempt by Cablevision to renegotiate the contract.

Cablevision says that they seek to a court order that would allow them to carry the core and ancillary products from Viacom while negotiating a new agreement on it. The firm also seeks damages from Viacom, Inc. (NASDAQ:VIAB) (NASDAQ:VIA) and legal fees. The resolution of the case may be important for the future of the cable industry as it shifts to a new focus.

This is not the first instance of litigious blood between the two companies. In June of 2011 Viacom, Inc. (NASDAQ:VIAB) (NASDAQ:VIA) sued Cablevision Systems Corporation (NYSE:CVC) over a mobile application that allowed users to watch content on the go. Viacom alleged that the application violated its distribution agreements. The companies solved that issue outside of the court room.

This may just be posturing from Cablevision, and Viacom may be right about the firm’s wish to renegotiate their agreement. The intent does not really have any impact on the outcome of the lawsuit. If this case ends up in court it could have an important outcome.

In the market today Cablevision Systems Corporation (NYSE:CVC) shares rose by a fraction. Viacom, Inc. (NASDAQ:VIAB) (NASDAQ:VIA) shares are also up by a small fraction. So far in 2013, Viacom shares have risen by more than 8% while Cablevision shares are up by just 1%.