FCC approves Paramount-Skydance merger, co-CEO Chris McCarthy to depart
Brendan Carr (left) and David Ellison
Skydance Media’s takeover of Paramount Global has been approved by the Federal Communications Commission (FCC) following a months-long review, marking the last major hurdle in the finalising of the US$8bn deal.
With FCC approval finally in hand, the transaction to create New Paramount, which was announced over a year ago, is expected to close in the coming weeks.
The FCC, which was reviewing the transaction because it involves the transfer of CBS’s broadcast licences, on Thursday said it was satisfied the merged entity was committed to giving a “diversity of viewpoints from across the political and ideological spectrum.” Skydance had agreed to eliminate all diversity, equity and inclusion initiatives, and hire an ombudsman to investigate any claims of editorial bias at CBS News.
The FCC also said it approved the deal because it would mean a fresh capital injection into Paramount, “bolstering all aspects of its operations, including broadcast.”
“Americans no longer trust the legacy national news media to report fully, accurately and fairly. It is time for a change,” said FCC chairman Brendan Carr, who was appointed to the role by US president Donald Trump.
“That is why I welcome Skydance’s commitment to make significant changes at the once storied CBS broadcast network.”
The FCC review has dragged on for months, with many believing its approval of the deal hinged on Paramount’s CBS News settling a Trump lawsuit alleging that CBS News had deceptively edited a 60 Minutes interview with former presidential candidate Kamala Harris in the lead-up to last year’s US election. Earlier this month, Paramount agreed to a US$16m settlement with Trump.
When the deal closes and the new leadership team, led by incoming CEO and chairman David Ellison and president Jeff Shell, officially takes over, the changes are expected to come thick and fast.
The first major change was revealed on Thursday, with Paramount Global co-CEO Chris McCarthy confirmed to be leaving once the transaction closes. The future of the other two co-CEOs, George Cheeks and Brian Robbins, has not been confirmed, although Cheeks is expected to remain with the company, according to reports.
Skydance previously said it had identified US$2bn in post-merger cost cuts, and its leadership team has had at least a year to evaluate how they plan to bring together the two businesses.
Paramount has already made a significant number of lay-offs and cuts over the past 12 months, including shedding 15% of its US workforce late last year, shutting down Paramount Television Studios and then cutting a further 3.5% of its workforce earlier this summer. Earlier this week, news broke that Paramount was looking at closing its Paramount Africa offices and channels.
While the FCC signed off on the deal, one of its commissioners dissented and gave a scathing assessment of the circumstances surrounding the approval. FCC commissioner Anna M Gomez said she could not support the transaction “in light of the payout and other troubling concessions Paramount made to settle a baseless lawsuit.”
Gomez said the FCC is “undermining legitimate efforts to combat discrimination” and imposing “never-before-seen controls over newsroom decisions and editorial judgment, in direct violation of the First Amendment and the law.”
“After months of cowardly capitulation to this administration, Paramount finally got what it wanted. Unfortunately, it is the American public who will ultimately pay the price for its actions,” she added.
Even before the transaction was announced in July 2024, there were months of twists and turns that saw Paramount owner Shari Redstone have several changes of heart about the deal before eventually committing to selling to Skydance.
The deal was expected to close without too many complications, but the lengthy FCC review process has created huge amounts of internal discord, with high-ranking CBS News execs leaving as a result of the Trump settlement and South Park co-creators Trey Parker and Matt Stone saying the merger was “a shitshow and… fucking up South Park.” Parker and Stone also accused Shell of interfering with their streaming rights negotiations with Netflix and Warner Bros Discovery.
Last week, there was industry uproar when Paramount’s CBS announced it was cancelling The Late Show with Stephen Colbert. Paramount claimed the cancellation was for “purely financial” reasons, though many have criticised the company for attempting to curry further favour with Trump while the FCC review was going on.
Under the deal, Skydance, which is being backed by private equity firm RedBird Capital, said it will invest around US$2.4bn to acquire Paramount Global’s parent company, National Amusements, for cash and US$4.5bn for the stock/cash merger consideration to be paid for publicly traded class A shares and class B shares. It will also invest US$1.5bn to help improve Paramount’s balance sheet.
With the deal, Skydance will become the overseer of assets including CBS, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount+, Pluto TV and Paramount’s huge content catalogue, as well as international assets such as UK network Channel 5, Australian commercial channel Network 10, Chilevisión and Argentina’s Telefe.
