Paramount Global and Google’s YouTube TV agreed to a short-term contract extension late Thursday, keeping CBS and other networks available as the two media companies worked to negotiate a new distribution agreement.
The eleventh-hour reprieve spared about 8 million YouTube TV customers from losing access to nearly two dozen networks, including BET, Comedy Central, Nickelodeon and TV Land. Broadcast stations KCBS-TV Channel 2 and KCAL-TV Channel 9 in Los Angeles also would have been dropped.
“We’ve reached a short term extension as we work toward a deal with Paramount to keep their content on YouTube TV,” YouTube said in a statement directed at users. “We appreciate your patience as we continued to negotiate on your behalf. We also value Paramount’s partnership and willingness to work towards an agreement.”
Clashes between programmers and distributors have become increasingly common in recent years. Pay-TV providers are motivated to control costs in an effort to attract and retain subscribers who have an abundance of viewing options.
At the same time, Paramount and other traditional Hollywood programmers are struggling to maintain their financial footing amid ratings declines and cable customer defections. They can ill afford cuts to one of their most important revenue streams: pay-TV distribution fees.
The current dispute centers on the fees Google must pay for the rights to carry Paramount channels.
“We’re fighting for an agreement that avoids passing along additional costs and offers you more flexibility in how you watch your favorite sports and shows,” YouTube said earlier this week in a blog post.
The negotiations come at a troubled time for New York-based Paramount.
CBS is separately sparring with Sony Pictures Television to retain distribution rights for Sony’s hugely popular game shows “Jeopardy!” and “Wheel of Fortune.” 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.
Paramount’s controlling shareholder Shari Redstone struck a deal last summer to sell the company her family has controlled for decades to David Ellison’s Skydance Media. The $8-billion deal has encountered turbulence at the Federal Communications Commission. The agency must sign off on the transfer of the CBS television licenses to Ellison for the deal to go forward.
Paramount’s cable channels, including Nickelodeon and MTV, have lost millions of subscribers amid a migration to video-on-demand streaming services such as Netflix. In August, Paramount took a $6-billion write-down to account for the declining value of its cable television portfolio and so it entered the negotiations with Google with a weaker hand.
“We have made a series of fair offers to continue our long-standing relationship with Google’s YouTube TV, providing subscribers access to the full array of Paramount’s entertainment, news and sports programming,” Paramount said Wednesday in a statement.
YouTube TV, which launched eight years ago, is hoping to sharpen its edge.
The service has quickly grown into a major player in television, appealing to younger viewers and sports fans. It has successfully plucked subscribers from the legacy cable- and satellite-TV providers.
YouTube TV is now the fourth-largest multichannel distributor in the U.S., behind Charter’s Spectrum, Comcast Xfinity and DirecTV, based in El Segundo.
The service made a big bet on sports when it took over the NFL’s “Sunday Ticket” offering in 2023 after that package became too expensive for DirecTV, the longtime rights-holder. However, the nearly $2-billion-a-year price for the Sunday afternoon NFL games drove up the cost of operating YouTube TV, prompting Google to scrutinize other contract costs.
YouTube TV’s fees also are on the rise.
Last month, the service hiked its charge to customers to $82.99 a month, up from $72.99 a month.
The company said it would offer YouTube TV customers an $8 credit a month “if we can’t reach an agreement and [Paramount] content is unavailable for an extended period of time,” Google said in a blog post.
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