Warner Bros. Discovery and Charter Communications announced their contract renewal this week, which will allow the media company’s cable channels to continue to play over the cable company’s networks. This announcement came as a surprise, given that the current contract between the two companies is not set to expire for another year. Investors responded positively, with the share price of both WBD and Charter rising.
The extension deal is similar to the one Disney and Charter agreed to last year, with higher fees paid by the cable provider to the media company to have access to its channels. Specifically, Charter’s Spectrum TV subscribers will have continued access to Warner Bros. Discovery’s CNN, TBS, TNT, The Food Network, and other “basic” channels and will now also have access to watch the premium Max and Discovery+ channels.
The deal is a win for Warner Bros. Discovery because Charter will continue to pay the same rate to access TNT even after the network loses broadcast rights to the NBA after next season. While TNT is adding coverage of The French Open and some NCAA College Football games, most see the value of TNT as significantly diminished after the NBA leaves the network. After a spate of challenging developments and financial reports, Warner was in dire need of some good news.
As for Charter, they were motivated to extend their deal to provide stability for its cable customers, after seeing a significant drop in their subscriptions. By offering Max and Discovery+ as part of their cable bundle, Charter will undertake a campaign to sign up new subscribers and share in a percentage of the additional revenue earned the initiative. This is the latest example of Charter’s efforts to find a new model for future viability for their declining cable business.