The Federal Communications Commission (FCC) has been reviewing mergers and acquisitions in media for many years, focusing on whether these deals serve the “public interest.”
Skydance’s purchase of Paramount and its CBS News arm for $8 billion might meet the FCC’s public interest criteria, but only under certain vague guidelines regarding broadcast fairness. The situation gets a bit tricky when new company leaders consider diversity, equity, and inclusion (DEI) policies; there are questions about how these might influence management practices.
As long as Brendan Carr, a Trump appointee, leads the FCC, there’s an expectation that any media transaction requiring FCC approval will most likely need to sidestep DEI initiatives.
On a positive note for the Skydance-Paramount deal, the new management will be under David Ellison, the son of Oracle’s Larry Ellison. It’s said that he and his partner at Redbird Capital aren’t keen on DEI policies and may quietly move away from them, particularly concerning employment practices that focus on racial and gender considerations.
On the flip side, this poses a challenge for companies in the media sector. Those with a perceived liberal bias might find themselves needing to adjust their strategies, especially if they want to align with more conservative leadership.
Representatives from Skydance, as well as those from Comcast and Disney, chose not to comment, and FCC officials did not respond either.
Carr, recognized as a conservative legal activist and former FCC commissioner during Trump’s presidency, holds that all companies seeking merger approval must prioritize the “public interest,” explicitly calling for the rejection of DEI. This term is often linked to hiring quotas based on race and gender—common in media recruitment practices.
While Skydance may be ready to discard DEI, this could be difficult for an industry that’s traditionally aligned with these values. Companies like Disney have embraced DEI across various levels, from character representations in animation to internships.
The impact of DEI policies extends beyond the media. There’s mention of representations that emphasize social issues, such as a well-known commercial inclusion of a trans woman discussing culture. Retailers like Target have also showcased diversity initiatives prominently.
The conversation around DEI started gaining traction following high-profile events, including George Floyd’s murder in 2020, where it spurred claims for “racial justice” in hiring practices.
However, recent court decisions have indicated that racial preference systems in education and employment may not hold constitutional ground. Trump’s election campaign agenda has suggested a move away from DEI-related policies at the federal level.
Insiders say mergers requiring FCC approval under Trump’s administration may face hurdles if they do not renounce DEI policies. Carr reportedly has the authority to restrict deals if new companies refuse to comply, particularly with local broadcasting licenses.
In recent months, Carr has initiated a case related to Disney and NBC concerning DEI issues. Expect more scrutiny as mergers face lighter regulatory requirements under Trump’s guidelines.
Carr’s investigation into the Skydance-Paramount merger has already delayed proceedings, as he assesses its implications for antitrust and public interest standards, especially relating to Trump’s stance on DEI.
He’s also probing CBS regarding allegations that the network altered a controversial “60 Minutes” interview with Kamala Harris during her campaign—a move critics argue was intended to make her responses appear more coherent.
These FCC regulations might affect how public airwaves and local broadcasts operate, diverging from cable regulations.
Current stakeholders in the deal, including Paramount’s Shari Redstone, hope to satisfy Carr’s requests to finalize the merger, which could lead to hefty financial gains. She’s also navigating a separate $20 billion lawsuit from Trump against CBS News regarding the editing of Harris’s interview.
CBS has dismissed the lawsuit’s validity but seems to be contemplating a settlement that could exceed $20 million.
