Paramount Global and Charter Communications agreed to a new distribution deal for the CBS network and Paramount cable channels, easing a concern that had threatened to complicate sales talks for the media company.
The last three-year contract covering CBS and Paramount's 25 cable networks expired on April 30, but the two sides continued negotiations, sparing Charter's Spectrum customers another disruptive blackout. Last summer, a breakdown in separate talks between Charter and Walt Disney Co. resulted in Disney channels, including ESPN, going dark for 10 days for Spectrum subscribers.
While Paramount has less influence than Disney, the company still benefits from the strength of its CBS network and its entertainment programming; news programs, including “CBS News Sunday Morning” and “60 Minutes”; and sports, including golf and the NFL.
As part of the deal, the companies said ad-supported versions of Paramount+ Essential and BET+ Essential would be included at no additional cost to Charter's Spectrum TV customers. Charter will also make Paramount's direct-to-consumer products available for purchase to its online customers.
“This innovative agreement celebrates our mutual commitment to providing flexibility, choice and value to audiences around the world, and we look forward to bringing even more of our fan-favorite programming to Spectrum customers through our direct-to-consumer streaming services.” for the first time. “Ray Hopkins, president of U.S. Network Distribution at Paramount, said in a statement.
The Charter deal marked the first major milestone for Paramount since CEO Bob Bakish was ousted late last month and three division leaders, comprising the “Office of the CEO,” began running the company.
For investors, it was welcome news during a turbulent cycle in which Paramount board members have been mulling whether to pursue a complicated and controversial two-phase merger with David Ellison's Skydance Media or accept a takeover bid. purchase separately from Sony Pictures Entertainment and Apollo Global. Management.
Sony and Apollo have offered $26 billion, including debt assumption. Sony and Apollo are known to be cost-conscious buyers; They want to examine Paramount's financial picture, including the details of Charter's distribution pact, before arriving at a valuation, according to people close to the process who are not authorized to comment publicly.
Both Charter and Paramount had a lot to lose if they had not been able to reach a new agreement.
Charter shares have fallen about 25% so far this year, weighed down by concerns about weakness in its wireless phone and broadband Internet business, as well as further erosion in pay-TV subscribers, a trend that has had wide-ranging financial implications.
Audiences have been shifting away from general entertainment cable channels, including BET, MTV and Nickelodeon, making them less valuable to distributors like Charter.
Analysts have long considered Paramount's networks to be among the industry's weakest because they largely carry low-cost reality programming, a genre that television executives say has suffered from oversaturation and competition from high level by streaming companies, such as Netflix.
Recent Nielsen ratings show how Paramount's cable channels have fallen out of favor with the public. Only three of the company's channels (TV Land, TV Land Classic and Nick at Night) are in the Top 20, in terms of total viewers. TV Land plays reruns of series like “King of Queens,” “Seinfeld” and “Everybody Loves Raymond.” Comedy Central and Paramount Network are left behind and complete the Top 30.
Executives at Connecticut-based Charter, including CEO Christopher L. Winfrey, were reluctant to agree to a new pact that would significantly increase rates for subscribers who continue to pay for their channel packages. Winfrey has also demanded that programmers give Spectrum customers access to subscription services that provide network programming.
“From the beginning, Paramount has embraced Charter's goal of evolving the video distribution model and we have appreciated their willingness to collaborate on a solution that benefits our mutual customers and the video industry as a whole,” said Tom Montemagno. , executive vice president of Charter. of programming acquisition.
