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ViacomCBS (VIAC) and Sinclair Ink Multi-Year Affiliation Deal

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ViacomCBS (VIAC - Free Report) and Sinclair Broadcast Group (SBGI - Free Report) recently inked multi-year deal to provide CBS network affiliation for Sinclair stations in 13 markets.

Notably, these markets comprise four of the top 50 CBS market affiliates, covering 5% of the U.S. audience and approximately 6 million television households. The deal covers several early renewals of ViacomCBS and Sinclair’s affiliation agreements.

According to the agreement, subscribers of CBS All Access, ViacomCBS’ subscription-based streaming service, will continue to have access to Sinclair’s CBS affiliates. Also, Sinclair stations will continue to provide CBS’s content such as primetime, local news, sports and entertainment programming to the viewers.

Multiple Affiliation Deals to Aid Audience Growth

ViacomCBS’ recent multi-year agreement with Sinclair adds to the string of deals inked by the former to bolster the expansion of its content portfolio and broaden the audience base. The company also has affiliate deals with major station owners such as TEGNA (TGNA - Free Report) , Nexstar, Meredith and Cox.

Markedly, Sinclair is among the largest operators of CBS affiliates, spanning across 23 markets and covering 8% of the U.S. audience, catering to 10 million households. Further, TEGNA is the second-largest owner of CBS affiliates.

Notably, in the July-September quarter of 2020, ViacomCBS’ affiliate revenues rose 10% year over year to $2.37 billion. The growth was mainly driven by strong subscription streaming revenues, higher reverse compensation and retransmission fees, and expanded cable distribution.

Moreover, the company recently signed an expanded distribution agreement with Disney’s (DIS - Free Report) Hulu + Live TV, to provide 14 additional cable networks to the latter’s subscribers. The deal is expected to further boost the viewership of ViacomCBS’s cable networks.

A Strong Streaming Portfolio Boosts Prospects

ViacomCBS’ shares have gained 6.9% over the past year compared with the Zacks Film and Television Production and Distribution industry’s growth of 4.2%.
 

 

Growing traction of this Zacks Rank #4 (Sell) company’s robust portfolio of streaming services, which includes CBS All Access, Showtime OTT, Pluto TV, Noggin and BET+, serves as a key catalyst.

Solid adoption of the company’s free streaming service, Pluto TV, is a major growth driver. The platform offers nearly 100,000 hours of premium content to users across 25 countries. Notably, Pluto TV’s wide audience base consists of 28.4 million domestic monthly active users (MAUs) and 36 million global MAUs.

Moreover, in September 2020, the company announced that it will rebrand CBS All Access as Paramount+ in early 2021. It will include content from ViacomCBS’ portfolio of broadcast, news, sports and entertainment brands as well as new original content, which will further widen its content catalog.

Additionally, CBS All Access added new product enhancements, including Kids Mode for better parental control and the flexibility to create up to six profiles per account. It also added approximately 800 episodes of kids programming to its content library, which already hosts more than 1000 episodes of original children’s programming.

ViacomCBS’s continuous efforts to build a strong portfolio of streaming services and expand its content portfolio with new offerings are expected to boost its growth prospects and aid customer acquisition in the near term.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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