Paramount Pictures in Hollywood. (Brian van der Brug / Los Angeles Times)
Tech scion David Ellison launched his pursuit of Paramount Global nearly two years ago.
But the path has been anything but smooth for Ellison and his Skydance Media. President Trump and Federal Communications Commission Chairman Brendan Carr have put Paramount's CBS network under the microscope.
Now, the government's review of the $8-billion transaction could stretch into summer, heightening the drama for the embattled company that also owns MTV, Comedy Central and the Melrose Avenue film studio behind "Top Gun" and "The Godfather."
Paramount investors have cried foul.
While the Skydance purchase is pending, Ellison's investor group — including his billionaire father, Larry — has come to the financial aid of Paramount's controlling shareholders, Shari Redstone and her family. The group made a $186-million loan payment on behalf of the Redstones' cash-strapped investment firm. Once the deal closes, the Skydance investors will pay for her private jet and Central Park apartment in New York for a period of time, according to two people familiar with the arrangements who were not authorized to comment publicly.
"They have to get [the deal] approved," said Mario Gabelli, a longtime Paramount shareholder.
"Paramount, Hollywood and the world will be better off with Ellison running it," Gabelli said. "It doesn't matter whether they crash or burn or make a ton of money — we just need a change."
Gabelli and others are eager for a new chapter, but the Skydance deal has turned into a slog, punctuated by presidential theatrics and murky allegations. Investors are demanding answers from Paramount.
An obscure group led by a wealthy Beverly Hills human rights activist said it has the means — with support from an Abu Dhabi sheikh — to pay billions more than Ellison for Paramount, including debt restructuring.
Meanwhile, President Trump has said he wants "a lot" of money to settle his $20-billion lawsuit against CBS over edits to a "60 Minutes" interview of then-Vice President Kamala Harris last fall.
Last week, Carr told Bloomberg News that Paramount needed "to get busy" and dismantle its diversity, equity and inclusion programs for the deal to move forward. Ending DEI programs has been a Trump priority.
Carr's support for the deal is critical because Paramount and Skydance need FCC approval to transfer CBS station licenses from the Redstones to the Ellison family.
Further, members of Congress and conservative critics have raised national security concerns because they say Tencent Holdings, a minority investor in Santa Monica-based Skydance, has ties to China's military. Tencent said it has no ties to the Chinese military. Skydance said Tencent would own only about 5% of Paramount nonvoting shares.
Investors have flocked to Delaware court, raising questions about the Skydance transaction and its cushy terms for the Redstone family, which holds 77% of the controlling shares in Paramount through its investment vehicle National Amusements Inc.
The family is expected to collect $1.75 billion for its Paramount stake and the rest of National Amusements, which also operates movie theaters.
Lawyers for New York City workers' pension funds, which own Paramount stock, have filed a class-action lawsuit against Paramount and Skydance. This month, they questioned the Ellisons' loan and future jet payments on behalf of Redstone, calling them "not typical deal terms."
Payments made by Ellison will be deducted from the Redstones' eventual sale proceeds, according to a knowledgeable person close to Redstone. If the deal falls apart, Paramount would owe Skydance a $400-million breakup fee.
President Donald Trump in January at the White House with Oracle founder Larry Ellison, second from left, SoftBank Chief Executive Masayoshi Son and OpenAI Chief Executive Sam Altman. (Andrew Harnik / Getty Images)
Few expect Skydance's takeover bid to collapse. Observers point to Larry Ellison's prominent support of Trump as Skydance's ace in the hole.
Last summer, Skydance and Paramount set an April 7 deadline for the deal to close, according to regulatory filings. After that, either Skydance or Redstone, with support of Paramount's special committee, could walk away, but Paramount would have to pay the breakup fee.
The agreement includes two automatic 90-day extensions. The first would expire July 7 — the first anniversary of the deal signing. (David Ellison first reached out to Shari Redstone in mid-2023 when Paramount was reeling from Hollywood's labor strikes. At the time, Redstone turned to a banker to help National Amusements meet its financial obligations. The banker has been instrumental in facilitating NAI's sale.)
Representatives of Redstone, Paramount and Skydance declined to comment.
Allegations of preferential treatment have long clouded the complicated, two-step deal.
The Ellisons and private equity firm RedBird Capital Partners agreed last summer to buy the Redstones' National Amusements. After that, Paramount will buy Skydance at a valuation of $4.75 billion. Critics say that is an inflated price for Ellison's firm. But Skydance and its backers also agreed to pump $1.5 billion into Paramount's battered balance sheet so the company can pay down debt.
The arrangement also provides $4.5 billion to buy out shareholders eager to exit.
The New York pension funds accused Paramount board members of breaching their fiduciary duty to shareholders by holding an auction that was designed to anoint two winners — Redstone and Skydance, which was granted the right to "acquire Paramount at a heavy discount," according to the funds' complaint. "The losers? Paramount's public stockholders."
Shareholders recognized the Redstone family would receive a premium for their controlling shares. The question has been, how much?
"This is Hollywood: 'Show me the money,'" Gabelli said, borrowing from the 1996 film "Jerry Maguire."
The veteran investor, who helped Redstone's father, Sumner Redstone, mount his successful takeover of Paramount Pictures three decades ago, asked a judge to order Paramount to provide financial details of its agreement with Skydance.
Gabelli dubbed his firm's effort "Project Fishbowl."
"If Shari gets $40 a share and our shareholders are getting $23, well, that's too big of a discrepancy," Gabelli said. "I'm all in favor of this [Skydance] deal but I want to make sure my clients get a fair price."
In late January, a group called Project Rise Partners said it was prepared to pay $13.5 billion for Paramount, $5 billion more than Skydance's deal. The team, in a letter this month to the FCC, urged the agency to block the Skydance deal.
Skydance was furious, saying Project Rise showed up after the auction, which closed in late August after a 45-day "go shop" period that was designed to allow competing offers. Project Rise tried to muster a bid last summer but what happened next is in dispute.
Project Rise said it tried to enter the bidding but Paramount officials suggested the group go away because Ellison had the inside track. Skydance called the Project Rise offer "unserious."
In a letter to the FCC, Skydance lawyers said they had uncovered evidence that Project Rise's bid and the backers it listed in a September term sheet were "make believe."
Skydance lawyers alleged in the FCC letter that neither Goldman Sachs nor a fund controlled by an Abu Dhabi sheikh had pledged assistance to Project Rise.
Project Rise's Los Angeles attorney, Thomas Watson, said during a hearing in the pension funds case that Skydance's statement was based on "sloppy research."
Shari Redstone, pictured here in 2019, is Paramount's controlling shareholder. (Martina Albertazzi / Bloomberg via Getty Images)
Watson said Skydance contacted an Abu Dhabi sheikh — but he was the uncle of their prospective Middle East advisor with a similar name.
"Skydance reached out to the wrong sheikh," he said.
The pension funds withdrew their request for the judge to block Skydance's Paramount takeover after the companies and Project Rise told the judge they would provide discovery materials.
Project Rise co-Chair Daphna Edwards Ziman acknowledged the "David and Goliath" nature of her effort to dislodge Skydance. She is joined by Moses Gross, who manages the Malka Investment Trust, as co-chair.
"We are in danger of losing one of the most iconic companies of the world," Edwards Ziman said of Paramount. "Maybe I don't have standing [but] I just couldn't sit by and watch it go."
Project Rise will reveal its investors to the Delaware judge, she said.
The human rights and children's advocate — who wrote a 2011 thriller, "The Gray Zone" — said she was sympathetic to Shari Redstone's plight. Edwards Ziman accused Paramount management of failing the mogul.
Edwards Ziman and others have questioned Skydance and its deal partner RedBird's growing influence at Paramount Global — even before the deal closes.
In addition to Ellison paying NAI loans, RedBird executive and incoming Paramount president Jeff Shell has held meetings to familiarize himself with operations and the team. Late last year, during a meeting with a high-level CBS executive, he suggested the company needed to resolve Trump's lawsuit, sources said.
Project Rise's efforts are expected to fall short.
"The FCC likely will approve the deal, and the company will be sold," said C. Kerry Fields, a business law professor at the USC Marshall School of Business. "While we might not know all the details of Skydance's advances to Shari, it looks they are curing [her debts] so that she can stay alive to do the deal.
"Redstone," he added, "doesn't really have any other alternatives."
