Paramount Global and Charter Communications agreed to extend their talks on a deal renewal, which — for now — will prevent Paramount’s networks like CBS, Comedy Central and MTV from going dark on the cable operator’s systems.
The current carriage agreement between Paramount and Charter, the nation’s second largest cable operator behind Comcast, was set to expire at midnight ET Tuesday (April 30). The two companies have been in renewal discussions for months. The two sides reached a short extension on the deadline in order to prevent a blackout as active talks continue, a source confirmed.
The deal renewal negotiations are coming to a head as Paramount Global is in flux. On Monday, the company said CEO Bob Bakish was stepping down, replaced by a three-member “Office of the CEO” management team. Bakish’s ouster came as Paramount Global’s board is reviewing an offer from Skydance Media that would see Skydance buy out Shari Redstone’s National Amusements Inc. (the controlling shareholder of Paramount) and then merge Skydance and Paramount.
Charter is a significant customer for Paramount, and the deal terms will have a key bearing on the media company’s ability to deliver the free cash flow going forward.
The company’s lineup of cable nets — MTV, VH1, Nickelodeon, BET, Paramount Network, Comedy Central and CMT — has seen declining ratings and revenue amid the industry’s continued transition to streaming. On the Charter side, the company is facing its own fundamental transition as its video subscribers have steadily declined.
Charter has been focused on cutting its affiliate fees for Paramount channels and potentially dropping the number of networks it carries. A scaled-back deal with Charter could trigger Paramount Global’s favored-nations clauses with other pay-TV providers, which collectively paid $2 billion last year in carriage fees for CBS and Paramount cable channels
Paramount Global also faces carriage deal renegotiations with DirecTV later this year, according to industry sources.
News of the Charter extension was first reported Tuesday by Bloomberg News.
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