Former FCC Commissioner Warns Paramount Will Be ‘Melting Ice Cube’ if Skydance Deal Collapses
Former FCC Commissioner and Cooley LLP Partner Rob McDowell warned on Thursday that Paramount Global will be a “melting ice cube” if its pending $8 billion merger with Skydance Media fails to close.
The media giant’s executives have said that the deal, which is currently awaiting regulatory approval from the FCC due a required transfer of broadcast licenses, is expected to close in the first half of 2025. But LightShed Partners analyst Rich Greenfield recently said he is “increasingly concerned” the deal could collapse as Paramount is “paralyzed by legal fears” surrounding President Donald Trump’s $20 billion lawsuit against CBS and “60 Minutes” over an Oct. 7 interview with former Vice President Kamala Harris.
Settlement talks between Paramount and Trump have prompted warnings from both members of Congress and the California State Senate that doing so to secure regulatory approval of the Skydance deal could potentially constitute a violation of federal anti-bribery laws. The Wall Street Journal reported that Trump recently shot down Paramount’s offer to settle the lawsuit for $15 million, with the president aiming to get at least $25 million and an apology.
“Obviously, as I read in the newspapers, there are some political elements surrounding that deal,” McDowell said during a session at Gabelli Funds’ 17th Annual Media & Sports Symposium in New York. “We’ll see how all that plays out, and also the patience of Skydance. How patient are they going to be? If this is not the deal for Paramount, then it’s a melting ice cube. What would be the next price? Who would be the next buyer?”
The FCC typically approves or denies transactions within 180 days. However, Greenfield pointed out that it is a guide and not a rule in terms of decision-making and that there’s no “forcing function” for the agency to act.
“We believe it is unlikely the FCC will weigh in until the current Trump/CBS lawsuit is resolved,” he wrote on Tuesday.
Though the five-member regulatory body will be down to just two members following the departures of Democratic member Geoffrey Starks and Republican member Nathan Simington, McDowell said that the Paramount-Skydance deal can still be approved as a “bureau action.”
“The conventional thinking, which is inaccurate, is that you need commission votes for high-profile mergers. Only if there’s something ‘new or novel’,” McDowell explained. “The Skydance proposal is a simple transfer of control of licenses. They’re not already a broadcaster, they aren’t other issues at play. So, it should be approved on bureau action so that’s something that you do not need an FCC vote of the commissioners to get done.”
