Paramount Global and Skydance Media are nearing the finish line of their $8 billion merger. But after months of twists and turns, there’s yet another hurdle standing in the way of controlling shareholder Shari Redstone passing off her family’s empire to David Ellison: Donald Trump’s new Federal Communications Commission chairman Brendan Carr.
The Skydance deal, which is subject to approval by the FCC due to a required transfer of broadcast licenses of Paramount’s 28 owned-and-operated local TV stations, is currently on track to close in the first half of 2025. But Carr, a Trump loyalist, has put increased scrutiny on Paramount-owned CBS by reviving a previously dismissed “news distortion” complaint to the FCC against the network from The Center for American Rights — a self-described “nonpartisan public interest law firm” — over a “60 Minutes” interview with former Vice President Kamala Harris.
The complaint, which Carr has said would “likely arise” in his review of the Skydance transaction, takes aim at the editing of Harris’ response to a question on Gaza, which was different in the final cut that aired on Oct. 7 compared to an earlier promo on “Face the Nation.” The interview was a prominent media hit within the Democrat’s presidential campaign.
Trump has also sued CBS for $10 billion for the “60 Minutes” interview, claiming it was deceptively edited to make Harris look good.
On Monday, CBS turned over the interview’s full, unedited transcript and camera feeds to the FCC. CBS News had previously told TheWrap that it was complying with a request from the agency, which it was “legally compelled to do.”
Carr has said the major networks’ broadcast licenses are “not sacred cows” and that he’d be scrutinizing CBS, ABC and NBC to make sure they’re operating in the public interest — a requirement tied to the 1934 Communications Act — or risk the possibility of losing their licenses.
Experts told TheWrap they anticipate the Skydance deal will ultimately clear its regulatory review, especially with the involvement of Trump ally Larry Ellison and after the company surmounted roadblock after roadblock to see this deal close. But some cautioned that Carr may wield his influence to push the deal through with conditions, such as requiring CBS to turn over the transcripts from the Harris interview to clear the path of resistance.
There’s been some “conflicting messages from and about Carr with regard to his enthusiasm and adherence for a free market,” Morningstar analyst Matthew Dolgin told TheWrap.
“This is a small deal relative to the major tech companies that might provide more opportunity to make headlines,” he continued. “Ultimately, given the merits, Larry Ellison’s involvement and the chance to get off on a foot that shows support for the business community and M&A, we expect this recent hiccup to pass quickly.”
Carr would likely not block the merger outright, but he could cause “delay and complication,” Shaliz Sadig Romano, co-managing partner of Romano Law, told TheWrap.
“In my experience, when it comes to mergers, you want to strike while the iron is hot and while there is significant momentum,” she said.
But New Street Research analyst and former FCC chief of staff Blair Levin warned that “Carr can ask for any conditions he wants and threaten to kill the deal without any potential for a court review.”
“Carr will be a hurdle, but it’s not clear what the price is he’s asking for,” he told TheWrap.
Representatives for Paramount and Skydance declined to comment on this story, while representatives for the FCC did not immediately return TheWrap’s request for comment.
Carr vs. CBS
Carr’s predecessor Jessica Rosenworcel had said The Center for American Rights’ complaint was “seeking to weaponize” the agency and “at odds” with the First Amendment. She warned at the time that the FCC should not be “the president’s speech police” or “journalism’s censor-in-chief.”
In its reversal, the agency said the dismissal was “issued prematurely based on an insufficient investigatory record for the station-specific conduct at issue” and that the complaint requires “further consideration.”
“I’m not sure how you can possibly do that without seeing the actual video to see what was the real answer. Was it edited for clarity and length, which would be fine, or were there other reasons why the editing took place?,” Carr said of the dismissal in the Fox interview. “We’re going to take a look at that, and we’re open minded as to potential consequences.”
Carr didn’t rule out releasing the transcript to the public, noting that transparency is “incredibly important.”
“I do think the American public ultimately deserve to see this for themselves,” he continued. “What’s interesting is CBS releases other transcripts. For instance, the ‘Face the Nation’ interview recently with Vice President Vance. They released the full unedited transcript there, but for some reason they haven’t done that here, and we’ll soon see why.”
The request to turn over the transcript and feeds is “unprecedented,” Levin said. He pointed out that there’s no antitrust or FCC rule violation at the heart of the Skydance deal not moving forward quickly.
“I assume someone at the FCC told Paramount that there would be no approval [of the Skydance deal] until they turned over the transcript,” he continued. “I don’t think it guarantees [the deal closing], but not turning it over would guarantee the deal would stay in purgatory.”
Democrat FCC Commissioner Anna Gomez slammed the agency’s latest actions, calling them “retaliatory” and “designed to instill fear in broadcast stations and influence a network’s editorial decisions.” She warned that it sets a “dangerous precedent that threatens to undermine trust in the agency’s role as an impartial regulator.”
“The Communications Act clearly prohibits the Commission from censoring broadcasters, and the First Amendment protects journalistic decisions against government intimidation,” Gomez added. “We must respect the rule of law, uphold the Constitution, and safeguard public trust in our oversight of broadcasters.”
Settling with Trump
While Trump’s administration is largely expected to be more favorable towards M&A, the president has also been critical of CBS News’ coverage during the campaign, including suing CBS and calling for the network to lose its broadcast license over the Harris interview, accusing it of “partisan and unlawful acts of election and voter interference.”
CBS has maintained that Trump’s accusations of deceitful editing are false, but despite reported objections from the news division, Paramount has entered into discussions with the president’s team about a possible settlement, according to The New York Times. On Friday, a U.S. district judge in Texas granted Trump’s attorneys’ request to postpone a deadline to respond to CBS’ motion to dismiss until Feb. 7.
Those settlement discussions aren’t happening in a vacuum, coming on the heels of Meta and Disney both settling lawsuits with Trump, paying millions in what’s perceived as an attempt to help smooth relations with the new administration.
“Normally, CBS would not want to settle,” Romano said. “However, the Paramount-Skydance merger is massive and settling might be ‘losing the battle’ to ‘win the war’ of getting the merger through.”
While acknowledging a settlement may help get the Skydance deal across the finish line, Levin said Carr and Trump may want more depending on the price paid.
“Disney’s $15 million did not cause Carr to not weigh in on the national/local negotiations,” he added, citing Carr’s letter to Disney CEO Bob Iger about ABC’s affiliate renewal discussions shortly after its news division settled another suit brought by Trump. “Carr has been strategically vague on articulating conditions.”
“60 Minutes” executive producer Bill Owens told staff on Monday that any settlement in the matter would not include an apology from him, The New York Times also reported, citing people familiar with his remarks.
The Center for American Rights challenges Skydance-Paramount merger
In addition to its “news distortion” complaint, the Center for American Rights has taken direct aim at the Skydance deal, asking that it be conditioned upon a commitment to “promote viewpoint diversity,” avoid foreign influence and treat all employees and candidates equally without regard to race or gender.
In a petition filed with the FCC, the firm accused CBS News of having a “troubling track record of ideological bias and news manipulation” and that CBS Television has “apparently engaged in illegal racial quotas for its hiring.” It also targeted an investment in Skydance from Tencent Holdings, saying its less than 5% stake raises “troubling questions about undue foreign influence from China” and claiming that Skydance and Paramount may have “prioritized the feelings of the Chinese Communist Party” by allegedly removing Japanese and Taiwanese flags from Maverick’s leather pilot jacket in the film “Top Gun: Maverick.”
Paramount and Skydance have urged the FCC to dismiss the petition, arguing that a viewpoint neutrality condition would “improperly encroach on broadcasters’ editorial discretion” and violate the First Amendment. The company also said allegations of Chinese influence and racial discrimination have “no factual foundation and are legally unavailing” and that Tencent’s “entirely passive, non-attributable, minority interests present no basis for concern about undue influence.”
In a follow-up to its original filing, the Center for American Rights said its conditions could be met by adding board members from different geographies, industries, backgrounds and political persuasions; creating an “independent, empowered, balanced ombudsman” similar to Meta’s oversight board; putting executive and editorial staff in cities besides New York and Los Angeles to “ensure a balanced set of viewpoints”; and committing to an “ideologically diverse hiring pipeline.”
It also argued that the 5% foreign ownership threshold is “not a hard-and-fast rule” and that Tencent’s designation as a “Chinese military company” from the Department of Defense should “refute the presumption under these circumstances.” It requested that the FCC coordinate its review with the Committee on Foreign Investment in the United States (CFIUS).
In addition to the Center for American Rights, the FCC has received petitions of opposition from Paramount shareholder Mario Gabelli, Hollywood’s Teamsters union, the Latino-owned entertainment company Fuse Media and LiveVideoAI.Corp.
“Nothing is off the table”
When asked about the potential for a CFIUS review, Carr told Bloomberg that “nothing is off the table” in the FCC’s review of the transaction and that it would look at all issues raised. Some lawmakers on Capitol Hill have also said that they would support the move.
Democratic Senator Mark Warner told TheWrap that the “potential for a [People’s Republic of China] national champion like Tencent to hold a significant financial stake in a major U.S. content conglomerate raises serious concerns” and should “absolutely prompt CFIUS scrutiny.”
Meanwhile, Republican Rep. John Moolenaar told TheWrap he’s heard from multiple Hollywood executives about “rampant self-censorship designed to curry favor with the Chinese Communist Party” and that, given Tencent’s designation, CFIUS should “closely scrutinize” the proposed merger to “ensure the Chinese Communist Party is not further solidifying its hold on the American entertainment industry.”
But Levin said he’s “dubious” CFIUS would get involved or that its possible review of the deal would even matter.
“The level of interest and control may attract a review, but it is small enough that I doubt it will result in any action that affects the outcome,” Levin explained. “On the other hand, Trump is interested in the outcome and has Carr at the FCC who can control both the timing and the outcome.”
Though a CFIUS review would be more time-consuming, Morningstar’s Dolgin said the merits of the merger suggest it would resolve in Skydance’s favor and that there shouldn’t be any national security risk. He added that an alternative option would be for Skydance and Paramount to try to buy out Tencent’s stake to avoid CFIUS scrutiny, though he acknowledged Tencent would have to be a “willing and reasonable seller.”
Tencent has called the designation a “mistake,” noting it is “neither a Chinese military company nor a military-civil fusion contributor to the Chinese defense industrial base.” The company added that it would engage in discussions with DoD to “resolve any misunderstanding,” and if necessary, take legal action to have itself removed from the blacklist.
A spokesperson for Tencent did not immediately return TheWrap’s request for comment.
Larry’s influence
Despite the politics surrounding the merger, Skydance and Paramount have a secret weapon that bodes in their favor: Trump’s longstanding and amicable relationship with David Ellison’s father and Oracle co-founder Larry Ellison.
The elder Ellison has received nothing but praise from the president, who has been referred to as “a friend of mine” and “the CEO of everything” in recent weeks. On Jan. 21, Ellison visited the White House to help unveil Project Stargate, a $500 billion AI initiative.
Larry Ellison is providing $6 billion to finance the Skydance merger. He was also initially set to have a 77.5% controlling stake in Paramount following the deal’s closing, though the FCC application was subsequently amended to reflect that David Ellison would control 100% of the Ellison family’s voting interest.
“The deal is going to close. It was implied from the speed at which Oracle ended the TikTok ban that Larry Ellison has influential ties to the Trump administration,” former BET and MTV executive Andrew Rosen told TheWrap. “Skydance-Paramount is no longer the type of deal that anyone wins points from preventing going through.”
If a regulator blocks the merger, Paramount and Skydance have the option of terminating the deal, per an S-4 prospectus filed with the U.S. Securities and Exchange Commission. Exercising that option would leave Paramount on the hook to pay Skydance a $400 million breakup fee.
