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UPDATE 2-Gannett and Dish reach contract deal, avoid blackout

(Adds that agreement has been reached)

Oct 8 (Reuters) - Gannett Co Inc said it reached a deal with Charles Ergen's Dish Network Corp on Monday avoiding a blackout that would have prevented some Dish customers in the United States from seeing content broadcast by networks ABC, NBC and CBS.

Newspaper and television station owner Gannett and the No. 2 U.S. satellite TV provider were locked in negotiations - a deadline of midnight on Oct. 7 was extended - over fees and a digital video recorder that lets viewers skip commercials.

Called the Hopper, Dish contended last week that the DVR was the major sticking point in the contract negotiations.

A person at Gannett with direct knowledge of the talks, who did not want to be identified because the discussions are not public, said that while the business implications of the Hopper were part of negotiations, the DVR was not at the center of the dispute.

The stakes involved Dish customers in 19 cities including Atlanta, Washington D.C., Denver, Minneapolis, Cleveland, Phoenix and Sacramento who would have lost access to various ABC, CBS and NBC-affiliated stations owned by Gannett.

Dish introduced the Hopper earlier this year with a function that allows subscribers to skip commercials automatically when they are watching recorded shows.

While the DVR can currently skip ads only the day after airing, Dish can exert further pressure on broadcasters by threatening to skip ads for recorded broadcast shows the same day, which would destroy ad revenue for broadcast stations, Janney Capital Markets analyst Tony Wible said in a note.

Shares of Gannett and Dish were little changed, trading at $18.38 and $32.02 respectively on Monday morning.

(Reporting by Jennifer Saba in New York and Neha Alawadhi and Sruthi Ramakrishnan in Bangalore; Editing by Louise Heavens, Sreejiraj Eluvangal and Dale Hudson)

((neha.alawadhi@thomsonreuters.com)(within U.S. +1 646 223 8780, outside U.S. +91 80 4135 6385)(neha.alawadhi.thomsonreuters.com@reuters.net))

Keywords: DISH GANNETT/