Paramount International’s $8 billion merger with Skydance Media faces a slew of recent hurdles because it appears to be like to achieve US regulatory approval — from controversy over a “60 Minutes” interview with Kamala Harris to objections from the Teamsters union, sources instructed The Put up.
The outlook for the mega-deal has grown murkier since Donald Trump received the presidential election, sources say. That’s partly as a result of the president-elect has filed a $10 billion lawsuit claiming Paramount’s CBS community engaged in “voter interference through malicious, deceptive, and substantial news distortion”.
The meat is over a controversial “60 Minutes” interview with Kamala Harris, which Trump claims was edited to get rid of the vice chairman’s clunky, meandering language and prop up her picture throughout the essential days earlier than Election Day.
“I think the Trump part is a real issue,” a supply near Paramount requesting anonymity stated.
One potential state of affairs, in accordance with the supply, is that Paramount — managed by media heiress Shari Redstone — is compelled to conduct an inside investigation into the “60 Minutes” interview to fulfill Trump and FCC Commissioner Brendan Carr, his decide to run the company below his administration.
“I’m pretty confident that that news distortion complaint over the ’60 Minutes’ transcript is something that is likely to arise in the context of the FCC review of that transaction,” Carr stated in an interview final month.
It’s too early to know whether or not necessities to get the merger accepted additionally might embrace turning over the uncooked transcript of the interview, in accordance with the supply.
Skydance has tapped Makan Delrahim — the previous antitrust chief of the Justice Division below the primary Trump administration who’s now a companion at white-shoe regulation agency Latham & Watkins — to get the deal cleared with regulators, sources stated.
Whereas the DOJ has cleared the merger, the FCC on Nov. 15 set a brand new schedule for public feedback, extending it to January after initially setting out a schedule on Sept. 6 that ended Nov. 1, in accordance with public filings.
On the time, the FCC cited an earlier submitting that incorrectly acknowledged tech billionaire Larry Ellison would have voting management over Paramount as a substitute of his son David Ellison, the CEO of Skydance. Insiders, nonetheless, thought-about it a quibble meant to delay the method.
The FCC below Trump might delay deal approval till late subsequent 12 months when the merger is scheduled to terminate, sources stated.
In one other plot twist, the Worldwide Teamsters have entered the image, with dealmakers involved that the highly effective union’s president Sean O’Brien is exerting affect with the president-elect, sources stated.
O’Brien gave a speech on the Republican Nationwide Conference, breaking with Teamsters custom. The union head, who additionally has been noticed at Mar-a-Lago, additionally nudged Trump towards his controversial decide of Oregon Consultant Lori-Chavez-DeReme to guide the US Labor Division, sources stated.
In an Oct. 7 submitting with the FCC, the Teamsters raised hackles over a Skydance presentation that laid out a $2 billion cost-savings plan, half of which was slated for the primary 12 months, “suggesting immediate post-closing job cuts” on prime of a 15% labor pressure discount this 12 months, in accordance with the submitting.
A report surfaced this week that David Ellison is planning sweeping modifications upon merging with Paramount. Ellison is reportedly weighing combining all of Paramount’s tv property, together with CBS and MTV, into one unit, in accordance with Bloomberg.
David Ellison is assembly with Paramount workers and telling them that no determination has been made about layoffs, Bloomberg stated.
Skydance’s “promises of ‘synergies’ and Paramount’s recent workforce reductions tend to undermine their labor-related pledges,” the Teamsters claimed within the regulatory submitting.
“The Teamsters could have leverage with the FCC,” Mario Gabelli whose agency has the second largest variety of Paramount votes instructed The Put up. “Yes, I accept there is a possibility of the FCC finding an excuse not to approve the deal.”
The Teamsters declare layoffs would harm native information protection on Paramount’s 14 owned native CBS tv stations, together with New York’s WCBS. Comparable considerations from Teamsters helped persuade the FCC to sink hedge fund Customary Common’s try final 12 months to purchase native TV station operator Tegna, sources stated.
It’s price noting that the Teamsters haven’t but opposed the deal however raised considerations, sources stated. O’Brien is asking Skydance for written commitments relating to staffing ranges which Skydance has not offered, sources stated.
Legal professional David Goodfriend, who suggested the Teamsters on their opposition to the Tegna deal, is now advising the Teamsters in talks with Skydance and the FCC.
“If the Teamsters look at it rationally, a deal will provide certainty for a lot of their people,” the supply near Paramount stated, referring to Skydance including $1.5 billion to the closely levered Paramount steadiness sheet as a part of the merger.
One potential option to fulfill the FCC can be to spin off or promote Paramount’s owned and operated TV stations, which in accordance with Gabelli may very well be price greater than $6 billion.
“I don’t think Ellison would walk away easily,” Gabelli stated.
Skydance declined to remark. Paramount and the Teamsters didn’t return calls.
There are different choices for Paramount ought to regulators block this merger.
Presently, a gaggle of suitors in a consortium known as Venture Rise Companions that expressed curiosity in shopping for Paramount on Aug.15 is chatting with new potential funding companions and desires the prospect to make an all-cash supply once more, sources stated.
Venture Rise says it intends to rebuild MTV, BET and Paramount’s tv networks and stations, sources stated.
Paramount would want to pay Skydance $400 million if it finally took one other supply, in accordance with public filings.
