FCC blesses Skydance-Paramount merger
Comes after the network agrees to concessions
[Editor’s note: This post was updated July 25.]
After months of waiting, the FCC has officially approved the Skydance-Paramount merger, which will bring changes to the nation’s most prestigious television network.
Technically, the FCC approved the transfer of 28 FCC licenses of CBS stations to Skydance. CBS operates stations in eight of the top ten markets, including CBS Chicago and stations in New York and Los Angeles – all traditionally deep blue areas where President Donald Trump is loathed. The approval also requires Skydance not to implement any DEI initiatives in its hiring or development in any programming – a major blow for diversity advocates. Skydance would also take control of Paramount Pictures; Paramount+, Pluto TV; cable networks such as BET, VH1, Nickelodeon, and MTV; and syndicator CBS Media Ventures.
With regulator approval now in the rear-view mirror, the $8.4 billion Skydance-Paramount deal is expected to close “in the next few weeks”. “Americans no longer trust the legacy national news media to report fully, accurately, and fairly. It is time for a change,” said FCC chair Brendan Carr in a statement. “That is why I welcome Skydance’s commitment to make significant changes at the once storied CBS broadcast network.
“In particular,” he continued, “Skydance has made written commitments to ensure that the new company’s programming embodies a diversity of viewpoints from across the political and ideological spectrum. Skydance will also adopt measures that can root out the bias that has undermined trust in the national news media. These commitments, if implemented, would enable CBS to operate in the public interest and focus on fair, unbiased, and fact-based coverage. Doing so would begin the process of earning back Americans’ trust. Today’s decision also marks another step forward in the FCC’s efforts to eliminate invidious forms of DEI.”
The Paramount-Skydance merger will close on or by August 7.
This comes after Paramount agreed to settle with the Trump Administration for $16 million over claims the newsmagazine 60 Minutes decisively edited answers given by former Presidential candidate Kamala Harris, and a week after CBS decided to end The Late Show with Stephen Colbert, silencing a voice critical of the administration and exiting the late-night business altogether. CBS also agreed to hire an ombudsman for its news division.
Skydance CEO David Ellison is the son of Oracle founder Larry Ellison, a Trump supporter. Former NBCUniversal exec Jeff Shell becomes the new president of the company, two years after he was ousted for sexual harassment allegations against a CNBC reporter. The younger Ellison and Shell will replace the current Paramount CEO trio of George Cheeks, Brian Robbins, and Chris McCarthy, with the latter two exiting once the merger is finalized. Current Skydance Chief Creative Officer Dana Goldberg will now lead Paramount Pictures, while Cindy Holland will take charge of the streaming service Paramount+.
The merger involves all stock, with the Skydance investor group owning one hundred percent of New Paramount Class A shares and 69 percent of the outstanding Class B shares, accounting for about 70 percent of the total pro forma shares. Paramount has two tiers of stocks – Class A and Class B, with the former having voting rights, as the latter does not. Legal action is expected from Class B shareholders, as Mario Gabelli, who owns the largest Class A shares next to Shari Redstone, wants more information on the transaction to see if Redstone’s $2.4 billion payout is at the expense of other Paramount shareholders.
Skydance is also inheriting pending litigation from Sony regarding the distribution rights of Wheel of Fortune and Jeopardy, as CBS Media Ventures and its predecessor companies have syndicated the duo for more than forty years. Will the new Skydance management settle and give up distribution rights to Sony, or will they continue to fight in court, which could be more expensive if the case goes to trial?
It is unclear how CBS and its local news stations will operate under the new regime. We are likely to see fewer investigative pieces about the Trump Administration, which were numerous on 60 Minutes last season. We also may see less enterprise reporting on law enforcement, as many in the field are Trump supporters. In 2020, CBS Chicago aired several groundbreaking pieces on wrong-home police raids, when Chicago Police mistakenly raided the home of Anajnette Young, or police brutality – especially since Fraternal Order of Police President John Catanzara is a big Trump supporter and has been critical of local stations in the past. Management at the perennially low-rated news station – due to decades of missteps – changed after general manager Derek Dalton was fired over racial and sexual harassment charges and replaced by former WGN-TV news director Jennifer Lyons. Last year, CBS Chicago hired former Mayor Lori Lightfoot, who had been critical of the station at times, as a commentator for the Democratic National Convention held here in Chicago.
Skydance has promised to boost its local stations with a $1.5 billion cash infusion. However, it remains to be seen if it would affect CBS Chicago’s sorry news ratings. We’ve seen what happened to WGN-TV’s news operation as it’s become nothing more than a Fahey Flynn-Joel Daly-John Coleman “happy talk” Eyewitness News reboot, a reference to its ratings dominance at ABC-owned WLS-TV in the 1970s until viewers got sick and tired of them by the end of the decade. CBS Chicago may be headed down the same path as viewers continue to tune out local news and abandon linear TV – an issue Skydance will have to face.
[Editor’s note: An earlier draft incorrectly stated how many top ten markets CBS owns a station in.]