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Pro Analysis

Viacom downgraded on the risk cable companies may drop its networks

Robert Bakish, chief executive officer of Viacom
Chris Ratcliffe | Bloomberg | Getty Images
Robert Bakish, chief executive officer of Viacom

Deutsche Bank lowered its rating for Viacom to sell from hold, citing the increasing risk of cable firms dropping the company's networks in the most popular cable subscription packages.

The embattled media company's shares have declined 12 percent in the past year versus the S&P 500's 15 percent return.

"We've now noticed a change in tier composition in several legacy Charter markets since last week, with Viacom's core channels also being re-tiered into the Gold TV package and Digi Tiers," analyst Bryan Kraft wrote in a note to clients Tuesday. "We think there is more downside risk given that the re-tiering now appears to have been extended to the full footprint, which implies a greater negative financial impact to Viacom."