Greenlighted: Paramount's $8 billion merger with Skydance receives the thumbs-up
Paramount and Skydance Seal $8 Billion Merger, Aiming to Transform Entertainment Landscape
The Federal Communications Commission has approved the $8 billion deal between Paramount and Skydance, marking a significant milestone in the media industry. The merger, which was approved by a 2-1 vote, will see the two companies join forces to create the "Paramount Skydance Corporation", a tech-hybrid entity aiming to remain competitive in the evolving entertainment landscape.
The post-merger plan focuses on rebuilding and expanding Paramount+, the streaming service that has rapidly grown to 79 million subscribers. The new leadership aims to enhance Paramount+ to increase its profitability and compete more effectively with other streaming giants.
David Ellison, CEO of Skydance and son of technology titan Larry Ellison, will take over as chairman and CEO of the merged entity. This leadership change signals a tech-driven strategic shift, emphasizing digital innovation and direct-to-consumer engagement.
To achieve cost savings, Skydance and its backers have committed to finding $2 billion in cost efficiencies, which likely means significant operational restructuring, further layoffs, and streamlining across CBS, MTV Networks, Paramount Pictures, and other Paramount Global legacy units.
The merged company will also focus on content and programming leverage, with valuable assets like NFL programming, popular CBS shows, and original hits set to play a crucial role in retaining subscribers and driving growth. Strategic investment in new content and longer-term media rights deals will also be a priority.
The merger aims to rebuild Paramount+ as a competitive streaming platform within a media-technology hybrid company that maximizes content, technology, and direct consumer relationships while undergoing significant cost and organizational rationalization under new leadership.
The deal comes after months of turmoil, including a legal battle between President Donald Trump and Paramount-owned broadcast network CBS. Trump had sued CBS over a "60 Minutes" interview, alleging deceptive editing to help Kamala Harris win the election. CBS has cancelled Stephen Colbert's "Late Show," citing financial reasons, which some within and outside the company question.
Tanya Simon was appointed as the top producer at "60 Minutes" by CBS, seen as a move to calm nerves leading up to changes expected under new ownership. Bill Owens, the executive producer of "60 Minutes," resigned in April, citing lack of editorial independence.
The merger is expected to be finalized by September, with a consortium investing $8 billion. The FCC Chairman, Brendan Carr, hailed the merger as an opportunity to bring more balance to CBS, while Commissioner Anna Gomez expressed disdain for the process. Skydance has assured regulators that they will watch for any perceived bias at CBS News and hire an ombudsman to review complaints about fairness.
Paramount agreed to pay Trump $16 million earlier this month, with the money going to Trump's future presidential library and legal fees. Critics have lambasted the settlement as a veiled bribe to appease Trump. CBS News CEO Wendy McMahon stepped down in May, citing disagreements with the company "on the path forward."
As the merger moves forward, the emphasis is on integrating technology-driven innovation with Paramount’s established media brands to address the challenges and opportunities of the global entertainment industry today. No major public details yet exist on specific product roadmaps or tech implementations, but the focus is clear.
- The "Paramount Skydance Corporation," the technology-hybrid entity formed by the merger between Paramount and Skydance, will look to leverage its content, such as NFL programming, popular CBS shows, and original hits, to remain competitive in the business landscape of the evolving entertainment industry.
- Paramount's focus, under the new management of David Ellison from Skydance, will shift towards finance, with the aim of maximizing profitability through cost savings, organizational rationalization, and strategic investment in new content, as well as longer-term media rights deals.
