After 251 days, the Federal Communications Commission has approved Paramount and Skydance Media’s $8 billion merger by a vote of 2-1 along party lines.
The long-awaited approval comes a day after Skydance agreed to appoint an ombudsman at CBS to review complaints of bias and to eliminate all diversity, equity and inclusion initiatives at Paramount. It also comes three weeks after Paramount reached a $16 million legal settlement with President Donald Trump over the editing of a “60 Minutes” interview with former Vice President Kamala Harris, a move that drew criticism from federal lawmakers and some of the company’s brightest stars.
The move paves the way for new leadership and direction at Paramount as it’s looking to manage the declining linear TV business while growing streaming profitability. Additionally, the Skydance deal’s closing will mark the end of an era, with the Redstone family set to relinquish control of the media giant that they’ve held since 1994 to the Ellison family and Gerry Cardinale’s RedBird Capital Partners.
Under the two-step deal, Skydance is set to acquire controlling shareholder Shari Redstone’s holding company National Amusements, which controls 77.4% of the Paramount Class A common stock outstanding and approximately 9.5% of the overall equity of the company, before merging with the Hollywood studio. The deal provides $2.4 billion for Redstone, $4.5 billion to non-NAI Paramount shareholders and an additional $1.5 billion in new capital to help pay down debt and recapitalize the company’s balance sheet.
Skydance, Paramount and National Amusements declined to comment.
Paramount shares jumped 3% in after-hours trading on Thursday.
Getting the Skydance deal across the finish line
In order to get the Skydance deal over the finish line, Paramount agreed to pay $16 million to settle a $20 billion lawsuit from Trump over the editing of an Oct. 7 “60 Minutes” interview with former Vice President Kamala Harris, which the president alleged caused him “mental anguish.”
The payment covers Trump’s legal fees and costs as well as donation that will be allocated to a “future presidential library.” Paramount and CBS also agreed to release “60 Minutes” interview transcripts with eligible U.S. presidential candidates after such interviews have aired, subject to redactions as required for legal or national security concerns. But they did not offer a statement of apology or regret for the Harris interview.
Trump has also said he’s anticipating an additional $20 million payment from Skydance, which he claimed would be paid in the form of advertising, public service announcements or other similar programming and would put the total settlement value at over $36 million. Paramount has repeatedly denied the inclusion of the PSAs in the settlement, while Skydance has declined to comment.
Meanwhile, to satisfy concerns from various petitioners in the FCC’s proceeding, Skydance made a written commitment to ensure New Paramount’s programming would “embody a diversity of viewpoints across the political and ideological spectrum” and that CBS’s reporting would be “fair, unbiased and fact-based,” a move that FCC Chairman Brendan Carr lauded.
“Americans no longer trust the legacy national news media to report fully, accurately, and fairly. It is time for a change,” he said in a statement. “That is why I welcome Skydance’s commitment to make significant changes at the once storied CBS broadcast network.”
Specifically, Skydance agreed to appoint an ombudsman for at least two years after the merger’s closing to work with New Paramount leadership to carefully review “any complaints of bias or other concerns” involving CBS News.
It also said it would work closely with CBS’s affiliated broadcast stations to ensure a “productive partnership,” including by considering technological improvements, investments in local news resources and other measures to bolster local broadcasting. Lastly, Skydance committed to eliminate all diversity, equity and inclusion (DEI) initiatives at Paramount, many of which were already rolled back this past February.
“These commitments, if implemented, would enable CBS to operate in the public interest and focus on fair, unbiased and fact-based coverage,” Carr added. “Doing so would begin the process of earning back Americans’ trust.”
The FCC’s lone Democrat Commissioner, Anna Gomez, blasted the approval.
“After months of cowardly capitulation to this Administration, Paramount finally got what it wanted,” she said in a statement. “Unfortunately, it is the American public who will ultimately pay the price for its actions.”
Gomez argued that the FCC used its power to pressure Paramount into brokering the Trump settlement and further eroded press freedom by imposing “never-before-seen controls over newsroom decisions and editorial judgment” in “direct violation” of the First Amendment.
Senator Elizabeth Warren posted a video on X, accompanied by the tweet: “Bribery is illegal no matter who is president.”
Goodbye Redstone era, Hello Ellison era
The approval paves the way for the closing of the Skydance deal, which will end a significant chapter in Paramount’s history. In 1994, Redstone’s father Sumner bought the studio in a bidding war, besting other media titans Barry Diller and John Malone, and folded it into his own media company, Viacom.
He would rule the CBS-Paramount roost until 2016, when at 92 and fighting allegations of dementia, he had to step aside, leaving his daughter to take charge. After being split up in 2005, Viacom and CBS would be recombined in 2019 and renamed Paramount Global. Sumner Redstone died in 2020.
Once the merger is officially closed, Paramount will be in the hands of David Ellison, the son of billionaire Oracle co-founder Larry Ellison. The younger Ellison will own 100% of New Paramount and serve as its CEO, while RedBird Capital Partners’ sports and media chairman, Jeff Shell, will serve as New Paramount’s president. The elder Ellison provided $6 billion in financing to back the deal, while the remaining financing came from RedBird.
Skydance, which is valued at more than $4 billion, has had a close working relationship with Paramount, having co-produced “Jack Reacher,” “Star Trek Into Darkness,” “Terminator: Dark Fate,” “Top Gun: Maverick” and every “Mission: Impossible” movie since 2011’s “Mission: Impossible – Ghost Protocol.”
A new direction for Paramount
As part of their vision going forward, Ellison and Shell previously said that New Paramount would look to turn the struggling media conglomerate into a technological leader in the entertainment space.
In order to do this, they plan to “rebuild” the Paramount+ platform to increase time spent, offer subscribers improved recommendations and reduce subscriber turnover, while utilizing artificial intelligence to “turbocharge content creation capabilities.” Ellison and Shell also said they’d tap into Skydance and Paramount’s combined portfolio of animation and sports content and would explore potential partnerships, content licensing opportunities and asset sales.
Additionally, the pair had identified $2 billion in merger-related cost cuts as they look to manage Paramount’s declining linear TV business, which includes $500 million in cost savings already generated by Paramount’s co-CEOs George Cheeks, Chris McCarthy and Brian Robbins. McCarthy is set to exit following the Skydance deal’s closing. Reps for Robbins and Cheeks declined to comment.
Shell previously told reporters that CBS would remain a “cornerstone asset” within the company and touted Pluto TV as a “very strong and powerful asset.” RedBird’s Andy Gordon said that a merged Skydance and Paramount will also see an opportunity to drive “a lot more efficiency” and “further cash flow generation” in Paramount+ and Pluto.
Paramount has explored selling off a dozen TV stations that may not be core to the company. Ellison also has considered combining all of Paramount’s TV networks, including CBS and MTV, into one unit and consolidating teams across departments including programming and marketing, or strategic partnerships that could involve selling off the cable network, per Bloomberg, though an insider previously told TheWrap that no final decisions had been made.
Fresh hurdles
While the merger is out of the crosshairs of the FCC, New Paramount’s leadership will likely face continued scrutiny.
Paramount has notably faced criticism from some of the company’s shareholders, who have sued or threatened to over the Skydance deal, alleging it prioritizes Redstone over the rest of the investor base. “South Park” creators Trey Parker and Matt Stone also slammed the merger as a “s–tshow” that was “f–ing up” the animated series after its Season 27 premiere was delayed.
In addition, despite Paramount and Carr long arguing that the Trump settlement and merger review were unrelated, lawmakers like Warren have previously warned that the settling in exchange for regulatory approval could be “bribery in plain sight.”
She, along with Senators Bernie Sanders and Ron Wyden, have launched an investigation into whether Trump and Skydance Media CEO David Ellison cut a side deal to secure regulatory approval. They also questioned whether Skydance was involved in discussions to end “The Late Show with Stephen Colbert” in 2026 – a decision that the network has said was “purely financial” and came three days after the host denounced the Trump settlement as a “big fat bribe.”
Shares of Paramount are up 25% year to date and 13% in the past year.
