Skydance and Paramount Global Reveal Merger Plan: Larry Ellison to Gain Control, CBS and Local Stations to Benefit

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Skydance and Paramount Global Highlight Benefits for CBS and Local Stations

In a recent filing with the Federal Communications Commission (FCC), Skydance and Paramount Global detailed how their proposed merger will benefit CBS and local stations. This filing is part of the initial steps required to secure regulatory approval for the transaction. According to the submission, the merger will involve the transfer of 28 CBS-owned station licenses to the new entity formed by the merger.

Ellison to Control Paramount Global Through National Amusements

The filing also reveals that Oracle co-founder Larry Ellison will hold a substantial 77.5% ownership stake in National Amusements, which will control Paramount Global. RedBird Capital is set to retain the remaining 22.5% stake. Although Ellison’s involvement as a primary backer of the deal was well known, the exact size of his stake had not been previously disclosed. His son, David Ellison, is expected to take on the role of chairman and CEO of Paramount following the merger.

FCC Review and Public Interest Considerations

The FCC’s review process typically activates when there is a transfer of ownership involving broadcast licenses. In this case, the review will assess whether the merger serves the public interest, convenience, and necessity, with a particular focus on the impacts on competition and localism. Skydance’s application emphasized the term “local” more than 60 times, underscoring the commitment to maintaining and enhancing local broadcasting.

$1.5 Billion Investment to Revitalize Local News

Skydance’s application stressed that the merger would infuse $1.5 billion in new capital into the company. This financial boost is intended to improve the balance sheet and enable strategic investments in CBS’s national news and local station operations. The filing promised that the transaction would address current challenges faced by local stations by revitalizing news operations across 17 major U.S. markets. The goal is to preserve and enhance localism and safeguard journalistic independence, which have long been key attributes of local broadcast television.

Merger Timeline and Competitive Landscape

Skydance has been pursuing Paramount for nearly eight months. The merger plans were announced in July, involving a total investment of $8 billion. Although a rival offer from an investor group led by Edgar Bronfman Jr. surfaced due to a “go-shop” provision, Bronfman eventually withdrew his bid. Skydance outlined initiatives to rejuvenate the online presence of local stations and unify cloud services for Paramount’s streaming platforms. This includes improving recommendation engines and optimizing advertising technology.

Labor Relations and Regulatory Scrutiny

The application also highlighted that the new leadership team, including David Ellison and Jeff Shell, has a history of positive interactions with organized labor. They intend to maintain these cooperative relationships and continue supporting Guild-created programming.

The Biden administration has shown a keen interest in how mergers impact labor markets, with recent examples including the Justice Department’s successful block of Paramount Global’s sale of Simon & Schuster to Penguin Random House. Last year, the FCC raised concerns about a proposed acquisition by Standard General, which ultimately led to the deal’s cancellation.

Future Outlook and Public Comment Period

Paramount Global is already in the process of reducing its U.S. workforce by 15% and has taken a significant $6 billion write-down on its cable networks. The FCC filing did not specify whether additional job cuts would be part of the merged company’s strategy. The FCC’s review process typically includes a public comment period, with a general timeline of 180 days for review, though this is not strictly enforced.

Skydance and Paramount Global expect the merger to be finalized in the first half of 2025.

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