The Center for American Rights has filed a petition with the Federal Communications Commission expressing concerns over Paramount Global’s pending $8 billion merger with Skydance Media.
The non-profit, which describes itself as “non-partisan, public-interest law firm,” says an investment in Skydance from China’s Tencent Holdings raises questions about “troubling questions about undue foreign influence from China.” It also claims that CBS News has “exhibited improper ideological bias” and that CBS Television has “apparently engaged in illegal racial quotas for its hiring.”
“The Center asks the Commission to condition its grant of approval of the merger on specific commitments by the new corporation to address these issues, and to place the approval on a probationary status for an appropriate period of years until compliance with the conditions is evident,” CAR wrote in its petition.
Paramount and Skydance declined to comment on CAR’s FCC petition.
CAR’s petition comes after the company filed a news distortion complaint against CBS over a “60 Minutes” interview with Vice President Kamala Harris. President-elect Donald Trump has complained that CBS should lose its license over the interview, which he said was deceptively edited. Incoming FCC chairman Brendan Carr recently told Fox News that the complaint is “likely to arise in the context of the FCC’s review of that transaction.”
In addition to the Center for American Rights, Paramount shareholder Mario Gabelli has asked the FCC to pause its review of the transfer of broadcast licenses as he investigates “potential fiduciary and/or federal securities violations” against the media giant’s minority shareholders.
In a new letter, Gabelli — whose firm beneficially owns 12.5% of the voting shares of Paramount making them the largest Class A shareholder behind Shari Redstone — said he is examining “breaches of fiduciary duties owed to minority shareholders by providing non-ratable benefits to NAI/Shari Redstone such as an excessive control premium, personal loans, and significant severance packages.”
He also reiterated concerns that Paramount’s S-4 for the Skydance deal does not provide adequate disclosures on the process leading to board’s approval of the deal, the fairness of the consideration to shareholders and “the facts relevant to enable stockholders to ascertain whether consideration that should be paid to them is being diverted to NAI.
Additionally, he said a recent amendment that David Ellison will control 100% of Paramount “only compounds” his concerns and that a books and records request filed with Paramount has provided “minimal transparency into whether the control premium and other benefits to NAI/Ms. Redstone were funded by capital that would have otherwise been paid to minority shareholders.”
“The transfer of Paramount and its subsidiary CBS to the control of a “sole manager” that will not be subject to modulation by shareholders and in which shareholders are being obfuscated from learning basic details of the negotiation of the Transaction may have significant adverse effects on the public interest,” the letter adds.
Others who have filed petitions include LiveAI.Corp, which wanted to bid for Paramount and called the bidding process flawed, Fuse Media, which said the restructured transaction and intention to use the technology, resources and expertise of Oracle to achieve post-transaction synergies is “likely to exacerbate Paramount’s current anticompetitive treatment of independent programming services to the detriment of competition and viewpoint diversity,” One Ministries Inc., which is asking the FCC to require Paramount+ to carry any independent broadcast stations that want to be carried by the streaming service via must-carry rules.
The Teamsters union has also requested that transaction approval be conditioned upon maintaining minimum levels of guild-created content and station-level employment, expressing concern over Skydance’s planned $2 billion in cost cuts following the deal’s closing.
All petitions to deny the Skydance deal were due Dec. 16, with oppositions due Jan. 2 and replies due Jan. 13.
