As reported by Bloomberg via Yahoo! Finance, Fuse Media, a Latino-owned entertainment company, has emerged as a vocal critic of the impending merger between Skydance Media and Paramount Global. The company has lodged formal objections with federal regulators, specifically highlighting concerns over the compensation of Paramount Chair Shari Redstone, arguing that her potential earnings from the deal could negatively impact the broader media landscape.
In a submission to the Federal Communications Commission (FCC), which was reviewed by Bloomberg News, Fuse Media amplified the concerns brought to light by investor Mario Gabelli. Specifically, the company's filing contended that Redstone is set to receive a higher premium than other Class A shareholders. Fuse posited that the funds earmarked for Redstone's compensation could be better utilized for enhancing operational capabilities, such as producing local news or creating general entertainment content. “This would be contrary to the Commission’s charge to promote localism, viewpoint diversity, and the public interest generally,” Fuse articulated.
The Skydance-Paramount merger entails a multitude of transactions; notable among them is the buyout of the Redstone family's National Amusements Inc., which holds the majority of Paramount’s voting stock. David Ellison, the founder of Skydance and son of Oracle co-founder Larry Ellison, is partnering with RedBird Capital Partners for this acquisition.
In an October notification to the FCC, the Ellison family asserted that David Ellison would hold sway over the familial voting interest in the consolidated entity. This development prompted the FCC to categorize the amendments as “major,” warranting a new round of public comments. This scenario has opened the floodgates for Gabelli to seek a suspension of the deal's approval, intending to probe the fairness of the terms for Paramount's minority investors.
Fuse Media raised additional concerns over the potential for the newly formed company to favor its streaming content at the expense of independent programmers, such as itself. The company criticized Paramount’s Pluto TV, an advertising-supported streaming service, claiming it leverages its critical distribution platform to scout promising third-party content, selectively create or alter its own versions, and preferentially support its proprietary services.
“Just as Amazon plays a critical role for independent retailers engaged in online commerce, Pluto TV is critical to the future of video programmers like Fuse,” Fuse noted in its formal complaint.
The objections from Fuse are part of a burgeoning coalition of critics surrounding the merger. Labor unions, including the International Brotherhood of Teamsters, recently urged both Skydance and Paramount to commit firmly to upholding workers’ rights and promised to keep layoffs at bay.
Complicating the situation further are recent statements from incoming Republican FCC Chairman Brendan Carr. During an appearance on Fox Business, Carr indicated intentions to investigate CBS’ editing of a Vice President Kamala Harris interview aired on the program 60 Minutes, framing the issue in light of the Skydance-Paramount merger.
When Paramount Global and Skydance first announced their merger in July, the proposal did not initially appear to raise significant regulatory concerns. The intended changes regarding local station ownership by Paramount, which necessitate an FCC review, comply with the agency’s existing media ownership regulations.
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