Skydance And Paramount Global An accompanying filing highlighted the impact of their proposed merger on CBS and local stations. FCC It is part of the initial steps to secure regulatory approval.
The document also revealed that Oracle co-founder Larry Ellison will own 77.5% of National Entertainment, which will control Paramount Global, while RedBird Capital is expected to own the remaining 22.5%. Ellison, whose son, David, will become Paramount’s chairman and CEO after running Skydance, has always been known as a key backer of the deal but the size of his holdings was not previously disclosed.
FCC review typically begins when a transaction involves the transfer of ownership of a broadcast license. The Skydance/Paramount deal involves the transfer of 28 CBS-owned station licenses to the new entity.
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The FCC reviews merger transactions to determine whether they are in the “public interest, convenience, and necessity.” One factor is the impact on competition and localism, which was evident in the SkyDance app overview, where the word “local” appeared more than 60 times.
Skydens wrote that the transaction “will deliver important public interest benefits by bringing to New Paramount an infusion of capital and a strong balance sheet, as well as a high-quality leadership team with proven expertise in the broadcasting, media and technology industries.” They noted that the Ellison family and Redbird have no interest in other TV broadcast licenses, so the merger “would not result in a lessening of competition or any other harm.”
Skydance emphasized the injection of $1.5 billion in new capital into the company. The improved balance sheet is something that will enable the company to make “strategic investments in the legendary newsgathering and reporting efforts of the national CBS television network and the company’s O&O local stations,” the filing said.
They also promise that, at a time when local stations “face many challenges in the current media landscape,” the transaction will “revitalize” CBS O&Os’ local news operations in 17 major U.S. markets, “thus preserving and promoting localism.” and protecting the journalistic freedom that has long been a hallmark of local broadcast television.”
Skydance’s Paramount stint lasted about eight months. The companies announced plans to merge in July, with Skydance investing a total of $8 billion. The “go-shop” provision enabled a rival offer from an investor group led by Edgar Bronfman Jr., but Bronfman eventually withdrew the bid.
Among other things, SkyDance said, “It will be an initiative to revitalize local stations’ online presence, further contributing to the sustainability of the company’s local journalism in the modern media landscape.” They also said the merger would include integrating cloud providers for Paramount’s streaming services, improving recommendation engines and “optimizing” ad technology.
The application also noted that the new company’s leadership team — which includes David Ellison and Jeff Schell — “has a history of working productively with organized labor.”
“Mr. Allison and Mr. Schell will draw on these experiences to ensure that New Paramount continues to be a source of strong demand for Guild-produced programming and maintains its cooperative relationships with organized labor unions of which its employees and contractors are or may become members. ” said the SkyDance app.
Joe Biden’s administration has taken particular interest in the merger’s impact on labor markets, and the Justice Department even successfully sued Paramount Global to block the proposed sale of Simon & Schuster to Penguin Random House on the grounds that it would reduce competition and advancement for authors. .
Last year, the FCC placed additional hurdles on Standard General’s proposed acquisition of Tegna’s broadcast stations, with FCC Chairwoman Jessica Rosenworcel expressing concerns about high costs and that it would “endanger jobs in local newsrooms.” Tegna eventually canceled the deal.
Paramount Global is already in the midst of cutting 15% of its US workforce. The company also took a nearly $6 billion write-down on the value of its cable network, indicating further contraction. The FCC filing, while emphasizing new investments, did not address whether the newly merged company would undertake additional job cuts.
The FCC review process typically includes a public comment component, where organizations and individuals can weigh in on proposed transactions. The agency typically sets a 180-day “shot clock” to review transactions, though that’s an informal timeline.
Skydance and Paramount have said they expect the merger to close in the first half of 2025.
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