Skydance Paramount Deal Approved But Drama Just Beginning

Well, the Skydance-Paramount drama is over, right? Hardly.

After a two -year epic struggle, the Federal Communications Commission has approved the purchase of Paramount Global by Skydance Media, led by its CEO David Ellison with funding provided in no small measure by his father, Oracle CEO Larry Ellison. A tumultuous couple of weeks involving Paramount’s settlement of President Trump’s lawsuit against 60 Minutes, Stephen Colbert’s stunning cancellation, and the government’s approval have hardly set the stage for a post-deal quiet period, however.

Skydance – and the rest of the media world – can expect a whole lot more turbulence in the skies ahead. Here are just a few of those pockets worth watching out for.

The political turbulence: What happens when Trump keeps calling?

The federal government sign-off itself sets up a framework for future battles. In the announcement of the approval the FCC Chairman Brendan Carr noted: “I welcome Skydance’s commitment to make significant changes at the once storied CBS broadcast network.” And who will monitoring those changes? Just look at the description of these regulatory conditions from the FCC:

• “Commitment to Unbiased Journalism”: The deal requires that both “news and entertainment programming” at CBS “will embody a diversity of viewpoints across the political and ideological spectrum and that CBS’s reporting will be fair, unbiased, and fact-based.” As required under the deal, Skydance will commit to a new “ombudsman” to evaluate “complaints of bias.”
• “Ensures that Discriminatory DEI Policies End”: Skydance must commit “that it will not establish any such [DEI] initiatives at the new company [“New Paramount].” The New Paramount must be “committed to equal opportunity and nondiscrimination” and “enact policies and practices” to implement this.

Remember when Republicans argued for less government interference in business? The Trump Administration will be the arbiter of whether CBS’s content – remember the approval references both news and entertainment – contains a sufficient “diversity of viewpoints.” It is CBS’s “reporting” – not opinion pieces – that the Trump Administration will adjudicate as “fair.” Fair to whom you might ask. Question asked and answered.

The Trump Administration attack on DEI policies is hardly limited to Skydance and Paramount. For whatever you may think of such policies, it is the Trump Administration that will now render its judgment as to whether Paramount is sufficiently committed to “nondiscrimination” as the Trump Administration sees it. And that same Administration will review – and sign-off – on the company’s policies and practices in this area going forward. Doesn’t quite sound like laissez-faire here does it?

Does anyone think that Trump and his FCC will now simply move on here? You can expect there will be more than few calls from Washington, DC to Ellison father and son when perceived “biases” crop up. For a President who has declared as “fake news” anything that he sees as negative, how is CBS News supposed to cover Trump Administration mistakes, economic downturns, climate change-related calamities and future scandals? Who will tell truth to power from within Skydance, Paramount and CBS?

The corporate structure turbulence: What will the company ultimately look like?

Look around the media landscape and you see a mad scramble to try to right-size media companies for the future. This runs from Comcast’s spin-off of Versant, which will house NBC Universal’s legacy cable networks, to Warner Bros. Discovery’s separation into the Streaming & Studios and its Global Networks entities, to the sale of A&E, and even to Disney now seemingly ready to bring in the National Football League as an equity partner at ESPN.

The FCC’s approval announcement claims it will “unleash” $1.5 billion in new spending from Skydance on enhancing “all aspects” of Paramount’s operations. David Ellison has committed to the new Paramount as being a “tech hybrid,” leveraging a new “studio in the cloud” and AI capabilities. Interestingly – and not coincidentally perhaps – the first announcement on this front was that Paramount would pay Oracle – chaired by Larry Ellison – $100 million to subsidize its cloud infrastructure. There is a long, expensive and very uphill fight ahead to build Paramount technology capabilities that rival the Big Tech behemoths of Netflix, Amazon and Google that are increasingly dominant in media as well.

Although Paramount’s cable networks have received little public attention throughout the deal approval process, this is a huge area ready for restructuring. The financial markets can expect a forthcoming spin-off or sale of some or all of the former Viacom family of networks. You may well still watch Comedy Central. But what is the brand equity and viewing left at MTV Classic, NickMusic, BET Her, or VH1? And after a spin-off, what is the plan from there? Who is clamoring for these assets?

The personal turbulence: What happens as the insults turn inward?

We don’t know for sure that the Trump Administration bears any direct responsibility for the Colbert cancellation. But if you’ve seen the reaction from Jon Stewart on The Daily Show and the rallying of the entire late night TV world behind Colbert, you see the seeds of a year-long campaign to never let the Trump Administration forget the sin here – no matter who is responsible. South Park even unleashed its hard-to-believe return episode including a faux nude Trump, which was conceived and created before the tumult of the last few weeks – what will they come up with next?

So what happens when members of the new Paramount “family” start to badmouth not only the Trump Administration, but the leadership of the company itself, how will that leadership react? In The Godfather, when Sonny Corleone tells Michael that he is taking their father’s assassination attempt way to personally, Michael famously tells him about retaliation, “It’s not personal, it’s strictly business.” But is it?

From my own experience, it’s gets pretty uncomfortable to be the constant butt of jokes from your own employees. I well remember in my NBC days seeing the unhinged reaction of a very senior NBC News executive to shock jock Don Imus – whose show was simulcast on MSNBC – going after him on-air. It wasn’t pretty when yours truly had to try to put out that fire. The Ellisons have been public figures for a long time, but I don’t suspect that future moves with Paramount assets and talent won’t come under an intense amount of fire from a lot of savvy communicators in the family. It takes a strong stomach in response – operators are standing by.