Viacom and Cablevision settle lawsuit over channel bundles

Viacom Inc. and New York cable giant Cablevision Systems Corp. have settled a long-running antitrust lawsuit that was intended to shine a light on programmers’ demands that all of their channels be included in pay-TV packages.

The two companies announced Friday afternoon that they had resolved the matter and were entering into “mutually beneficial business arrangements.”

Details of the settlement -- as well as any changes to the companies’ carriage agreement -- were not disclosed.

“We are pleased to have put these matters behind us in ways that benefit both of our companies and look forward to working together to benefit Cablevision’s customers,” Viacom and Cablevision said in a joint statement.

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The suit was filed in U.S. District Court in New York in early 2013, a few months after Cablevision and Viacom reached a new distribution agreement for the Viacom channels.

Cablevision’s suit alleged that Viacom had forced Cablevision to carry more than a dozen weak channels in order to get to carry Viacom’s main channels: Nickelodeon, MTV, VH1 and Comedy Central.

Programmers -- including Viacom, Walt Disney Co. and NBCUniversal -- price their packages in ways that encourage distributors to carry all of their channels.

But small cable companies have long bristled at the way major programmers bundle their channels, arguing that it is often more expensive to carry a few main channels than to carry the entire bundle.

In many ways, the meat of the lawsuit was eclipsed by industry trends.

In order to stave off more cable customer defections, pay-TV companies have been tailoring smaller “skinny” bundles of channels to encourage subscribers to stay with their services.

In addition, companies like Viacom have been more flexible.

Viacom’s stock has been battered this year over investors’ fears that cord-cutting and skinny bundles will erode media companies’ major profit centers: cable programming fees. Viacom is controlled by the 92-year-old media mogul, Sumner Redstone.

In addition, Cablevision is in the process of being sold to French telecommunications giant Altice, and thus had another incentive to settle. Cablevision, which has more than 3 million pay-TV subscribers, is currently controlled by the Charles Dolan family.

Altice this week filed its application with the U.S. Federal Communications Commission to win approval for its $17-billion Cablevision deal.

Twitter: @MegJamesLAT