ViacomCBS Inks Distribution Deal With Disney’s Hulu; Guggenheim Sticks To Buy

ViacomCBS announced a new multi-year distribution agreement with Walt Disney’s Hulu for the addition of 14 new networks on the latter’s live TV streaming service, Hulu + Live TV. The companies didn’t disclose the financial terms of the transaction.

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ViacomCBS (VIAC) said that the 14 networks that will be added to Hulu + Live TV include Comedy Central, MTV, BET, and Nickelodeon. The multi-year distribution agreement also includes renewal of a deal that allows Hulu to continue streaming “CBS broadcast stations, CBS Sports Network, Pop TV, Smithsonian Channel, and The CW, as well as continued distribution of ViacomCBS’ premium subscription service, SHOWTIME.” (See VIAC stock analysis on TipRanks)

Ray Hopkins at ViacomCBS said, “We are excited to have reached an expanded agreement with Hulu that underscores the value of our powerful portfolio of brands to next-generation TV platforms and viewers.” He further added, “Hulu continues to be a great partner, and this agreement ensures that Hulu + Live TV subscribers are now able to enjoy the full breadth of our leading content across news, sports and entertainment for the first time.”

Guggenheim analyst Michael Morris said he was positive about the multi-year agreement and reiterated his Buy rating on ViacomCBS stock.

In a note to investors, Morris wrote, “We believe that per-subscriber economic terms to ViacomCBS are consistent with terms across the distribution landscape, implying a positive incremental impact to both revenue and profitability.”

The stock has an analyst consensus of a Hold based on 8 Holds, 5 Buys and 2 Sells. The average price target of $32.33 implies downside potential of about 11.7% to current levels. Shares have declined by about 8.1% over the past year.