U.S. regulators have approved the \$8.4 billion deal for Paramount Global to merge with Skydance Media, ending one of the most politically sensitive takeovers in Hollywood in years.
The deal, in the 2-1 approval by the Federal Communications Commission (FCC), opens the way for Skydance CEO David Ellison, son of Oracle co-founder Larry Ellison, to gain control over some of America’s best-known media assets. They are CBS, Paramount Pictures, and Nickelodeon.
The merger process was controversial, especially when Paramount paid $16 million to settle a lawsuit brought by former President Donald Trump over a CBS “60 Minutes” interview. The timing prompted accusations that Paramount basically “bought” regulatory approval. FCC Chair Brendan Carr, a Trump appointee, rejected any link, saying the review was strictly in public interest and legal terms.
Democratic FCC commissioner Anna Gomez firmly objected, labeling the approval of the merger “a cowardly capitulation” to Trump’s pressure and objecting to what she characterized as “unprecedented controls over newsroom decisions.
The FCC approval was subject to a number of conditions. Skydance committed to hiring an independent ombudsman to handle editorial complaints and to not implementing diversity, equity, and inclusion (DEI) policies—a requirement that is in keeping with Trump’s long-held criticisms of such policies. Carr welcomed these measures as progress toward the eradication of “invidious DEI discrimination.”
Political hostilities escalated after Stephen Colbert, host of “The Late Show,” publicly denounced the lawsuit settlement as “a big fat bribe.” His show was cancelled just days afterward—technically for budgetary concerns, although most assume political reasons also came into play.
The transaction also brings a chapter to an end for the Redstone family, which has owned Paramount for generations. Shari Redstone, daughter of media tycoon Sumner Redstone, has led the company since 2019. Even with her attempt to breathe new life into the brand, Paramount has suffered deep financial troubles, particularly in keeping pace with the fast-changing streaming age.
The merger was more than 250 days in the making, much longer than the FCC’s typical 180-day deadline, an indication of the level of scrutiny and the complexity of the process.
When completed, the new Paramount will be headed by David Ellison as CEO and Chairman, with the former head of NBCUniversal, Jeff Shell, as President. Paramount co-CEO Chris McCarthy is expected to leave after the handover.
Paramount stock climbed 1.4% in after-hours trading to $13.45, indicating wary investor optimism.
FAQs About the Paramount-Skydance Merger
Why is the Paramount-Skydance merger controversial?
The controversy arises from Paramount’s $16 million settlement of its lawsuit with Donald Trump, which is widely perceived as a political gesture to gain FCC approval. The move also involved unprecedented conditions on newsroom practices and DEI policies, alarming press freedom.
What companies are involved in the merger?
Paramount Global, home to CBS, Paramount Pictures, and Nickelodeon, is joining forces with Skydance Media, the production company behind huge movies such as *Top Gun: Maverick*. Skydance is headed by David Ellison.
What will happen after the merger?
Skydance will acquire ownership of Paramount’s media assets. David Ellison is CEO and chairman, and Jeff Shell is president. There will be an editorial ombudsman at CBS, and DEI initiatives will be shunned in the new organization.
Why did the FCC vote 2-1 on this deal?
Two of the Republican-appointed commissioners, including Chair Brendan Carr, voted yes. Democratic Commissioner Anna Gomez dissented due to fears regarding press freedom and political interference.
What does this mean for Paramount’s future?
Paramount, under the guidance of Skydance, is seeking to go modern and compete more fiercely in the streaming and digital content markets. With seasoned executives in place, the company is putting its bet on innovation and tighter strategic hand to turn around decades of financial reverses.
