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Paramount (PARA) reached a new multi-year distribution deal with Charter Communications (CHTR) on Thursday, a significant win for the company as it evaluates its strategic options and a possible buyout of Skydance Media or Apollo Global and Sony. (Disclosure: Yahoo Finance is owned by Apollo.)

Charter, the parent company of Spectrum TV, will continue to carry all of Paramount’s networks, including Showtime, CBS and Paramount+. Additionally, Charter’s highest tier subscribers will receive the ad-supported versions of Paramount+ and BET+ at no additional cost.

Financial terms of the deal were not disclosed.

“With its TV Media segment largely driven by linear networks accounting for two-thirds of Paramount’s revenue last year and all of the company’s EBITDA, (Charter) could have caused serious damage if it decided to tighten the screws on Paramount,” MoffettNathanson analyst Robert Fishman said in a new note to clients Friday.

“This means that Paramount managed to avoid one of the biggest risks it faced (the fall of its longer-tail networks) while confirming a costly, if widely anticipated, development (the provision of Paramount+ for free).” , continued the analyst. “(This ignores) the dramatic blackout that occurred last September during Charter negotiations with Disney.”

Last year, Disney (DIS) pulled its owned-and-operated channels, including ESPN and ABC, from the Charter Spectrum cable systems after the two sides failed to reach a carriage deal. At the time, the media blackout affected many high-profile sporting events, including the US Open, and came on the heels of the NFL’s debut, increasing pressure on both sides to conclude an agreement.

The impasse was ultimately resolved when Charter agreed to offer some Disney streaming services – the ad-supported version of Disney+, ESPN+ and ESPN’s yet-to-be-launched direct-to-consumer offering – in as part of certain cable packages at no additional cost. cost to the consumer.

But for Paramount, the stakes seemed even higher in an uncertain future.

“We have repeatedly discussed this Charter negotiation as a potential obstacle to any strategic action or larger deal for Paramount, as buyers need to have confidence in the company’s linear cash flow trajectory. business,” Fishman said. “With this agreement now concluded, we would not be surprised to see further progress on the Skydance Media offering or the Sony/Apollo offering.”

“Depending on the terms of Charter’s distribution deal, the new CEO’s office led by a trio of senior executives may even have more conviction to move forward with its own long-term plan.”