Paramount, YouTube TV strike deal, averting CBS outage

Google’s YouTube and Paramount Global have struck a new distribution contract, averting a threatened blackout of CBS and other television channels for nearly 8 million YouTube TV customers.

The deal was clinched Saturday night, about 48 hours after the previous pact had expired. The two sides then extended a deadline to allow negotiations to continue, keeping nearly two dozen Paramount channels, including CBS Sports, BET, Comedy Central, Nickelodeon, TV Land and Los Angeles broadcast stations KCBS-TV Channel 2 and KCAL-TV Channel 9 available to YouTube TV customers.

“With this agreement, YouTube TV will continue to offer 100+ channels and add-ons including Paramount+ with Showtime and will enable more user choice in the future,” YouTube said in a statement. “To our subscribers, we appreciate your patience while we negotiated on your behalf.”

Contract terms were not disclosed.

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Negotiators spent days haggling over terms and fees that Google would pay for the rights to carry Paramount channels. Neither side appeared eager to let their squabble disrupt viewing for YouTube’s subscribers.

As part of the agreement, YouTube will begin offering Paramount’s streaming services, including BET+ and Paramount+ with Showtime, as an add-on channel on the streaming service.

“We look forward to extending our long-standing partnership and giving audiences greater access to their favorite programming,” Paramount said in a statement.

Clashes between programmers and distributors have become increasingly common amid the fraying of television’s economic model. Three years ago, a dispute between Google and the Walt Disney Co. prompted a brief blackout of ESPN and other Disney networks on YouTube TV.

Pay-TV providers, including Google, are motivated to control costs to attract and retain fickle subscribers who have an abundance of viewing options. Millions of customers have dropped traditional pay-TV subscriptions in the past decade; many have switched to streaming platforms including YouTube TV and Hulu+ Live TV.

At the same time, Paramount and other Hollywood companies are struggling to maintain their revenue streams amid ratings declines and cable customer defections. Programmers are motivated to preserve the lucrative pay-TV distribution fees.

YouTube TV has grown into a major player in television, appealing to younger viewers and sports fans.

It is the fourth-largest multichannel distributor in the U.S., behind Charter’s Spectrum, Comcast Xfinity and DirecTV, based in El Segundo.

YouTube TV took over the NFL’s “Sunday Ticket” subscription offering in 2023 after it became too expensive for longtime rights-holder, DirecTV. However, the nearly $2-billion-a-year bill for Sunday afternoon NFL games has increased the cost of operating YouTube TV, prompting Google to scrutinize other contract expenditures.

Last month, YouTube TV raised its charge to customers to $82.99 a month, up from $72.99 a month.

Paramount also was eager to avoid a nasty showdown.

The media company’s controlling shareholder Shari Redstone struck a deal last summer to sell her family’s business of four decades to the Larry Ellison family. The plan is for David Ellison’s Skydance Media to absorb the larger entertainment company, Paramount, in a deal valued at $8 billion. Executives are racing to complete the transaction by early April.

But the Skydance deal has encountered turbulence at the Federal Communications Commission, which must sign off on the transfer of the CBS television licenses to Ellison for the sale to close.

The company also is trying to fend off a $20-billion lawsuit filed by President Trump over edits made to a “60 Minutes” interview of former Vice President Kamala Harris last fall.

CBS is separately sparring with Sony Pictures Television to retain distribution rights for Sony’s hugely popular game shows “Jeopardy!” and “Wheel of Fortune.”