Paramount Global’s $8 billion merger with Skydance Media faces a slew of fresh hurdles as it looks to gain US regulatory approval — from controversy over a “60 Minutes” interview with Kamala Harris to objections from the Teamsters union, sources told The Post.
The outlook for the mega-deal has grown murkier since Donald Trump won the presidential election, sources say. That’s partly because the president-elect has filed a $10 billion lawsuit claiming Paramount’s CBS network engaged in “voter interference through malicious, deceptive, and substantial news distortion”.
The beef is over a controversial “60 Minutes” interview with Kamala Harris, which Trump claims was edited to eliminate the vice president’s clunky, meandering language and prop up her image during the crucial days before Election Day.
“I think the Trump part is a real issue,” a source close to Paramount requesting anonymity said.
One possible scenario, according to the source, is that Paramount — controlled by media heiress Shari Redstone — is forced to conduct an internal investigation into the “60 Minutes” interview to satisfy Trump and FCC Commissioner Brendan Carr, his pick to run the agency under his administration.
Im pretty confident that that news distortion complaint over the 60 Minutes transcript is something that is likely to arise in the context of the FCC review of that transaction, Carr said in an interview last month.
It is too early to know whether requirements to get the merger approved also could include turning over the raw transcript of the interview, according to the source.
Skydance has tapped Makan Delrahim — the former antitrust chief of the Justice Department under the first Trump administration who is now a partner at white-shoe law firm Latham & Watkins — to get the deal cleared with regulators, sources said.
While the DOJ has cleared the merger, the FCC on Nov. 15 set a new schedule for public comments, extending it to January after initially setting out a schedule on Sept. 6 that ended Nov. 1, according to public filings.
At the time, the FCC cited an earlier filing that incorrectly stated tech billionaire Larry Ellison would have voting control over Paramount instead of his son David Ellison, the CEO of Skydance. Insiders, however, considered it a quibble intended to delay the process.
The FCC under Trump could delay deal approval until late next year when the merger is scheduled to terminate, sources said.
In another plot twist, the International Teamsters have entered the picture, with dealmakers concerned that the powerful union’s president Sean OBrien is exerting influence with the president-elect, sources said.
O’Brien gave a speech at the Republican National Convention, breaking with Teamsters tradition. The union head, who also has been spotted at Mar-a-Lago, also nudged Trump toward his controversial pick of Oregon Representative Lori-Chavez-DeReme to lead the US Labor Department, sources said.
In an Oct. 7 filing with the FCC, the Teamsters raised hackles over a Skydance presentation that laid out a $2 billion cost-savings plan, half of which was slated for the first year, “suggesting immediate post-closing job cuts” on top of a 15% labor force reduction this year, according to the filing.
A report surfaced this week that David Ellison is planning sweeping changes upon merging with Paramount. Ellison is reportedly weighing combining all of Paramounts television assets, including CBS and MTV, into one unit, according to Bloomberg.
David Ellison is meeting with Paramount employees and telling them that no decision has been made about layoffs, Bloomberg said.
Skydances “promises of ‘synergies’ and Paramounts recent workforce reductions tend to undermine their labor-related pledges, the Teamsters claimed in the regulatory filing.
“The Teamsters could have leverage with the FCC,” Mario Gabelli whose firm has the second largest number of Paramount votes told The Post. “Yes, I accept there is a possibility of the FCC finding an excuse not to approve the deal.”
The Teamsters claim layoffs would hurt local news coverage on Paramounts 14 owned local CBS television stations, including New York’s WCBS. Similar concerns from Teamsters helped convince the FCC to sink hedge fund Standard General’s attempt last year to buy local TV station operator Tegna, sources said.
It is worth noting that the Teamsters have not yet opposed the deal but raised concerns, sources said. OBrien is asking Skydance for written commitments regarding staffing levels which Skydance has not provided, sources said.
Attorney David Goodfriend, who advised the Teamsters on their opposition to the Tegna deal, is now advising the Teamsters in talks with Skydance and the FCC.
“If the Teamsters look at it rationally, a deal will provide certainty for a lot of their people,” the source close to Paramount said, referring to Skydance adding $1.5 billion to the heavily levered Paramount balance sheet as part of the merger.
One possible way to satisfy the FCC would be to spin off or sell Paramount’s owned and operated TV stations, which according to Gabelli could be worth more than $6 billion.
“I don’t think Ellison would walk away easily,” Gabelli said.
Skydance declined to comment. Paramount and the Teamsters did not return calls.
There are other options for Paramount should regulators block this merger.
Presently, a group of suitors in a consortium called Project Rise Partners that expressed interest in buying Paramount on Aug.15 is speaking to new potential investment partners and wants the chance to make an all-cash offer again, sources said.
Project Rise says it intends to rebuild MTV, BET and Paramount’s television networks and stations, sources said.
Paramount would need to pay Skydance $400 million if it ultimately took another offer, according to public filings.