US clears way for $8 billion Paramount-Skydance merger

Reuters

4 days ago

July 24 (Reuters) - The $8.4 billion merger between Paramount Global (PARA.O), opens new tab and Skydance Media won approval from U.S. regulators on Thursday, clearing the way for a sale that evolved into a clash over press freedom in the era of President Donald Trump.
The deal will put well-known entertainment properties including the CBS broadcast television network, Paramount Pictures, and the Nickelodeon cable channel under the ownership of tech scion David Ellison.
Paramount this month paid $16 million in a controversial move to settle a lawsuit Trump filed against the company and CBS News, sparking accusations it effectively had paid for approval of the merger.
The Federal Communications Commission approved the deal in a partisan 2-1 vote that allows the transfer of CBS television stations. FCC Chairman Brendan Carr, an appointee of Republican Trump, said the agency had received assurances from the incoming owners that they were committed to unbiased journalism.
Democrat Anna Gomez, the FCC's dissenter, accused Paramount of "cowardly capitulation" to the Trump administration. She also said the FCC was imposing "never-before-seen controls over newsroom decisions."
CBS News was one of several news organizations Trump attacked for what he viewed as unfavorable coverage. Paramount paid Trump to end a lawsuit he filed over CBS' editing of a "60 Minutes" interview with his Democratic opponent, Kamala Harris.
Trump, who often accuses media outlets of liberal bias and "fake news," argued that the editing was designed to make Harris look good. First Amendment lawyers said the suit was without merit.
Carr has said the agency's review of the proposed merger was not connected to the lawsuit.
Senators Edward Markey of Massachusetts and Ben Ray Luján of New Mexico said the merger "reeks of the worst form of corruption," coming on the heels of Paramount's settlement.
The commission received pledges from Skydance that it would appoint an ombudsman to evaluate complaints of editorial bias or other concerns about CBS. Skydance also told the FCC it would not establish any diversity, equity, and inclusion initiatives, which Trump believes are discriminatory.
"These commitments, if implemented, would enable CBS to operate in the public interest," Carr said, who also hailed "another step forward in the FCC's efforts to eliminate invidious forms of DEI discrimination."
"The Late Show" host Stephen Colbert had called Paramount's settlement "a big fat bribe." His show was canceled days later in what Paramount called a financial decision unrelated to politics.
It marks the end of an era for the family of the late Sumner Redstone, who transformed the family's chain of drive-in movie theaters into a media empire that once spanned broadcast and cable television, film, radio and publishing. His daughter Shari Redstone became chair of Paramount in 2019.
At the time, she hoped to better position the company to compete with the world's entertainment giants. Paramount has since shed billions of dollars in market valuation as it struggled to navigate an entertainment business upended by the streaming video revolution.
The FCC approved the transaction after a review of more than 250 days, longer than the commission's target of completing such reviews within 180 days.
Skydance CEO David Ellison, son of Oracle (ORCL.N), opens new tab co-founder Larry Ellison, is poised to become chair and chief executive of the new Paramount. Jeff Shell, former chief executive of Comcast's (CMCSA.O), opens new tab NBCUniversal, will be its new president.
Chris McCarthy, one of Paramount's current trio of CEOs has decided to depart the company once the merger is completed, a source with knowledge of the matter said.
Paramount's stock rose about 1.4% in after-hours trading to $13.45.