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Why the FCC probe into Paramount-Skydance merger could drag on for months: sources
PGREParamount (PGRE) New York Post·2025-02-28 14:09

Core Viewpoint - The Federal Communications Commission (FCC) may delay the approval of the 8billionmergerbetweenSkydanceandParamountGlobaluntilthesecondhalfoftheyearduetoongoinginquiriesandcomplaintsregardingCBSNews′adherencetopublicinterestrules[1][4][14].Group1:FCCInquiryandComplaints−TheFCCindicatedalonger−than−expectedtimetableforthemergerapprovalduringameetingwiththeCenterforAmericanRights(CAR),whichfiledacomplaintagainstCBSNewsforallegedviolationsofpublicinterestrules[2][4].−TheinquirycouldtakemonthsastheFCCassessespotentialremediesthatmayberequiredforthemergertogainapproval[3][6].−TheFCChaslaunchedaninvestigationintoallegeddeceptiveeditingofacontroversialinterviewwithKamalaHarris,whichcouldimpactthemerger[5][11].Group2:PotentialRemediesandLegalImplications−PossibleremediesdiscussedincluderelocatingCBSoperationsfrommajorprogressivecitiesandincreasingpoliticaldiversityinhiringpractices[7][14].−IfCBSagreestotheseremedies,theFCCcouldexpeditetheapprovalprocessforthemerger[8].−CBShasbegunhiringoutsidelegalcounselinanticipationofalengthyapprovalprocess,indicatingpotentiallegalchallengesahead[6][14].Group3:FinancialandStrategicContext−ShariRedstonestandstogainnearly8 billion merger between Skydance and Paramount Global until the second half of the year due to ongoing inquiries and complaints regarding CBS News' adherence to public interest rules [1][4][14]. Group 1: FCC Inquiry and Complaints - The FCC indicated a longer-than-expected timetable for the merger approval during a meeting with the Center for American Rights (CAR), which filed a complaint against CBS News for alleged violations of public interest rules [2][4]. - The inquiry could take months as the FCC assesses potential remedies that may be required for the merger to gain approval [3][6]. - The FCC has launched an investigation into alleged deceptive editing of a controversial interview with Kamala Harris, which could impact the merger [5][11]. Group 2: Potential Remedies and Legal Implications - Possible remedies discussed include relocating CBS operations from major progressive cities and increasing political diversity in hiring practices [7][14]. - If CBS agrees to these remedies, the FCC could expedite the approval process for the merger [8]. - CBS has begun hiring outside legal counsel in anticipation of a lengthy approval process, indicating potential legal challenges ahead [6][14]. Group 3: Financial and Strategic Context - Shari Redstone stands to gain nearly 2 billion from the merger, which comes at a time when the media industry is facing challenges from cord-cutting and structural changes [10][9]. - Skydance, led by David Ellison, aims to restructure Paramount's operations, which include a movie studio and CBS, to improve profitability [12]. - The merger was unexpected for both companies after prolonged negotiations, and the current FCC scrutiny adds complexity to the deal [9][14].