In just under two weeks, Paramount Global will complete its merger with the smaller Skydance Media to form “Paramount Skydance Corp.” — and bring a rollercoaster M&A ride to its conclusion. The FCC cleared the Skydance-Paramount deal Thursday, removing the last regulatory obstacle.
The $8 billion deal is expected to close Thursday, Aug. 7, Paramount and Skydance said Friday. The companies also said shares of Class B common stock of the “New Paramount” will begin trading on the Nasdaq under the ticker symbol “PSKY” following the closing of the deal. Shares of Paramount’s Class B common stock (PARA) and Class A common stock (PARAA) will no longer be listed for trading following the closing.
First announced on July 7, 2024, the deal will bring together Paramount Global’s CBS, Paramount+, Paramount Pictures, Comedy Central, BET and more with Skydance’s film, animation and games production businesses.
To meet requirements set under pro-Trump FCC Chairman Brendan Carr, Skydance said it would ensure diversity, equity and inclusion (DEI) programs remain dead at the new company. It also agreed to install an ombudsman at CBS to vet and act on “bias” complaints in its news and entertainment programming, which Carr said “can root out the bias that has undermined trust in the national news media.” Anna Gomez, the FCC’s single Democrat commissioner, said the terms represented the Trump administration “imposing never-before-seen controls over newsroom decisions and editorial judgment, in direct violation of the First Amendment and the law.”
The FCC’s approval came two weeks after Paramount agreed to pay Trump $16 million to settle his lawsuit accusing CBS News of consumer fraud over the alleged deceptive editing of a “60 Minutes” interview with Kamala Harris. The FCC, Paramount and Trump have said the FCC’s review of the Skydance-Paramount transaction was separate from the president’s lawsuit (which had sought an astronomical $20 billion in damages).
The new company is expected to make significant layoffs, as Skydance and its backers have said they expect to achieve $2 billion in annual cost savings. That would be after Paramount Global made a 15% layoff across its U.S. operations last year, and let go another 3.5% last month.
“As we near the end of a historic chapter for Paramount and prepare for a new era, we want to thank you for your resilience, creativity and dedication,” Paramount co-CEOs George Cheeks, Chris McCarthy and Brian Robbins wrote in a memo to employees about the Aug. 7 closing date. “Because of you, Paramount is in a much better place today than it was a year ago, and it has been an honor to lead the company over the past year and work alongside you.”
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Paramount Skydance will be led by chairman and CEO David Ellison (current CEO of Skydance Media) and president Jeff Shell (former CEO of NBCUniversal). Shari Redstone, whose family has owned Paramount and predecessor company Viacom for decades, is set to receive $1.75 billion in cash upon closing of the Skydance deal; she will exit the merged company’s board. The Ellison family will maintain 100% voting power over Paramount Skydance Corp., but nonvoting shares will remain publicly traded.
Leadership changes at Paramount are already underway: Chris McCarthy, head of Showtime & MTV Entertainment Studios and Paramount Media Networks, is set to leave the company following the Skydance merger close, sources say. Paramount Pictures chief Brian Robbins is seen as prepped to exit as well, while CBS CEO George Cheeks is expected to stay on. (A Paramount rep declined to comment.)
From Variety US