David Ellison isn’t the owner of Paramount, yet he aims to expand its reach with deep funds from Oracle’s founder, Larry Ellison. In today’s media landscape, companies need to scale up to stay competitive, even against those struggling.
Meanwhile, Shari Redstone appears ready to offer Donald Trump $50 million in an effort to resolve a lawsuit involving Paramount’s CBS News division. It’s an interesting development.
Scale is vital; without a robust movie studio and with financial losses from streaming platforms and legacy assets like CBS, Nickelodeon, and MTV, the Redstone family finds itself under pressure.
Simply put, Paramount is too small to effectively compete against giants like Comcast and Warner Bros. Discovery.
Rumors swirl that once a deal between Paramount and Skydance is finalized and receives White House approval, David and Larry will start acquiring more assets.
One significant challenge is Paramount’s limited international footprint. David (or perhaps I should say “they”) must invest heavily to extend streaming services beyond the US to generate revenue akin to Warner Bros.
Also, the potential of leveraging Paramount’s media properties is noteworthy. However, CBS has frequently grappled with its legacy, and both Nickelodeon and MTV have lost audiences amid rising competition from platforms like TikTok.
A new management team at Skydance, which previously included NBC’s Jeff Shell, may play a role in the upcoming changes.
However, sports broadcasting isn’t cheap. CBS spends over $2 billion annually for NFL rights, and the league has a four-year opt-out clause.
The Ellisons have the financial muscle to make this happen, but they need clearance from the FCC, currently under Trump’s oversight. Skydance representatives have remained tight-lipped on the matter.
Yet, it’s not purely about finances. There’s also the scrutiny from the Trump-led FCC and its ongoing concerns about CBS’s journalism, notably regarding allegations of bias, which have led to Trump’s own legal actions against the network.
Sure, reporters enjoy First Amendment protections when they express opinions and cover the news. But if these companies want to operate over public airwaves, they also bear responsibilities, ensuring neutrality and public interest programming, alongside adhering to various employment laws.
In the case of Skydance’s prospective $8 billion purchase of Paramount, regulators will be keen to assess compliance, especially regarding longstanding practices related to diversity and inclusion in hiring.
Regulatory reviews were prompted after credible complaints surfaced about perceived political bias in CBS news coverage, particularly during the 2024 election cycle when they aired an interview with then-candidate Kamala Harris.
Shari Redstone’s possible $50 million settlement with Trump seems driven by the desire to resolve ongoing issues swiftly, protecting her family’s wealth.
It’s evident why she’s eager to address this situation. Paramount was valued at $30 billion in 2019 when she took the reins from her father, the late media mogul Sumner Redstone. The Skydance acquisition, estimated at $8 billion, could eventually lead to a shortfall of about $2 billion.
Doing the calculations: By settling with Trump for $50 million, she possibly saves her family a billion dollars in inheritance.
