In October, it will be 10 years since Shari Redstone began her campaign to get her family’s legacy in order. Most likely, she hasn’t had a day of rest in all that time.
As late as a month ago, Redstone, 70, might have reasonably expected that the sale of the family media empire, Paramount Global, would be done and dusted by the time she marked the 10-year anniversary of the day she had a former girlfriend ousted from the Beverly Park home of her aged father, legendary film and TV mogul Sumner Redstone. Shari’s move to wrest control of her father’s life away from rival contenders to his fortune and his throne set off an avalanche of litigation, corporate maneuvering, financial engineering, sharp-elbowed lawyering and boardroom dealmaking.
Slowly but surely, the younger Redstone vanquished powerful figures in her father’s orbit to take the reins of Paramount Global, home of Paramount Pictures, CBS, the Paramount+ streamer and more film and TV assets.
For Redstone, this winding road was expected to end in early April with the sale of the company in an $8 billion transaction to tech scion David Ellison’s Skydance and Gerry Cardinale’s RedBird Capital Partners. As the new year dawned, key players on both sides were confident the deal was on track to formally close.
But consider all that has happened since the first of the year:
--A stealthy investor group known as Project Rise Partners has gone public with a Hail Mary bid that values Paramount Global at $13.5 billion, significantly higher, on paper, than the Skydance-RedBird price tag. The specifics of the investors and their source of financing are still not entirely clear, but multiple industry sources confirm the legitimacy of the effort.
- A group of New York City pension funds asked a Delaware judge to issue an injunction to pause the legal and financial work now being done by Skydance and RedBird to finish off the acquisition process. As shareholders in Paramount Global, the funds argue that the terms are too generous to Redstone as Paramount Global’s controlling shareholder.
- The state of Rhode Island, in connection with the state employees’ pension fund, has taken a similar step, pushing for more disclosure of financial details in the transaction. More state-controlled pension funds with skin in the game (that is, they’re Paramount Global shareholders) are expected to endorse the effort to slow down the transaction’s closing.
- President Donald Trump has doubled down on his federal civil lawsuit against CBS’ “60 Minutes,” now seeking compensation of $20 billion, rather than $10 billion, for his novel claim that the newsmagazine deliberately edited its interview with Vice President Kamala Harris to help her candidacy at his expense. Trump’s amended complaint late last week added the claim he was personally harmed as the owner of social media platform Truth Social because CBS generated high ratings from the Harris interview.
- Newly installed Federal Communications Commission chairman Brendan Carr has opened up a public comment process for an FCC complaint filed by a conservative law firm against WCBS-TV New York, accusing the station of engaging in “news distortion” by airing the “60 Minutes” Harris interview in October 2024. CBS News in early February complied with the FCC’s request to turn over full transcripts and unedited video from its Harris interview sessions.
- The FCC was already in the midst of conducting a regulatory review of the transaction, as the agency has to approve the transfer of the licenses of the 28 TV stations owned by CBS from Paramount Global to a new owner. The launch of a separate “60 Minutes” probe is likely to slow that process.
Any one of these developments could easily imperil any sizable M&A transaction. Having them coalesce within a few weeks is sending Team Shari back into its foxhole to plot to save the Skydance-RedBird transaction. Representatives for Redstone, Skydance and RedBird declined to comment for this story. Paramount Global in a statement emphasized that Trump’s lawsuit against CBS is a separate issue that will not impact the Skydance sale.
“This lawsuit is completely separate from, and unrelated to, the Skydance transaction and the FCC approval process. We will abide by the legal process to defend our case,” Paramount Global said in a statement.
Sources close to Redstone say she’s not giving up on the deal with Ellison’s Skydance and Cardinale’s RedBird. Ellison’s father, Oracle founder Larry Ellison, is also involved with the deal, which may be a help or a hindrance depending on which way the winds are blowing in D.C. at any given moment. The elder Ellison has been one of the few MAGA-friendly Silicon Valley Brahmins since Trump’s first term. But he’s also battling with the all-powerful Elon Musk over rival ventures including OpenAI.
Washington lobbyist Brian Ballard is said to be working all sides to reach a settlement agreement between Trump and CBS that would smooth the path to getting the Paramount-Skydance transaction blessed by D.C. regulators. Ballard has deep ties to all of the parties including Larry Ellison. He is currently representing Paramount Global but was a prolific fundraiser for Trump.
Reports that Paramount Global is considering a financial settlement on the Trump federal lawsuit have alarmed journalists within CBS News and beyond. The implications for journalism and the legal precedent for defamation cases could be devastating. A settlement would open the door to more such politically motivated challenges to standard journalism and newsgathering practices.
Anna Gomez, one of two Democratic commissioners of the FCC, has been one of the few voices calling out Carr for the FCC’s aggressive stance on the “60 Minutes” complaint. “The FCC has been busy implementing the will of the administration,” Gomez says. “These actions set a dangerous precedent that undermines the trust in the agency’s role as an impartial regulator, because our licensing authority is being weaponized in order to curtail the freedom of the press. The FCC should stop trying to keep up with this administration’s focus on partisan culture wars and instead return to our core focus of protecting consumers, promoting competition and securing our communications networks.”
The magnitude of the CBS case is not lost on Redstone, according to a source close to the situation. Insiders insist that the talks are being steered by CBS leaders, not Trump ally Larry Ellison and the regime that aims to acquire the storied studio and network. But there’s little doubt that with an $8 billion transaction on the line, the Skydance-RedBird team are going to pull whatever behind-the-scenes levers they can. The initial agreement between the sides was reached in July after nine months of on-again, off-again negotiations.
Almost every major M&A deal generates shareholder lawsuits of varying degrees of severity. But the surge of challenges from major pension funds may become too high a mountain for Paramount and Skydance-RedBird to scale if judges see enough reasonable issues to put an injunction on the final dealmaking while the legal fight plays out.
For one, Redstone is accused of violating her fiduciary duty to seek the optimum price for all shareholders. Paramount Global is one of the few remaining family media empires that is governed by what is known as a dual-class stock. Redstone has ultimate sway over who sits on Paramount’s board of directors because her National Amusements Inc. holding company owns preferred Class A shares that control nearly 80% of the voting power of Paramount Global’s board. Other shareholders own Class B shares that don’t carry the same supercharged voting rights.
The state pension funds and other Class B shareholders are arguing in court that Redstone steered the deal to benefit her and her family at their expense. The prospect of long and costly litigation with powerful state funds banding together could become daunting to Team Ellison.
As if that weren’t enough intrigue, there’s also the mystery surrounding the Project Rise Partners bid. After Skydance and RedBird came to terms with Paramount Global, there was a defined 45-day period (later extended to 60 days) in which Paramount’s board was able to field other offers and compare them with the Skydance-RedBird terms. The backers of Project Rise have quietly maintained that they sent the outline of an offer to the Paramount board within that window but the board’s special committee did not engage with them. In a statement issued earlier this month, the special committee asserted that it is committed to the Skydance transaction: “It is unclear what PRP’s objectives are; however, Paramount is bound by its agreement with Skydance Media and there will not be any engagement with PRP in contravention of such agreement.”
There were other last-minute bids during the “go shop” window in July and August, including one from private equity giant Apollo Global Management along with Sony Pictures Entertainment for $26 billion in cash. Another investor group led by Edgar Bronfman Jr. expressed interest. In both cases, sources close to the Paramount board let it be known that the board saw red flags connected to the rejected bid, whether it was uncertainty about the financing or questions about whether regulators would approve private equity gaining control of such prized media and entertainment assets as CBS and Paramount Pictures.
Under the Biden administration, Paramount and other Big Media players groused that regulators were too tough on large-scale mergers and acquisitions. Trump’s reelection was supposed to usher in a more pro-business environment — except in the case of companies that have incurred his wrath. The FCC is a key weapon for Trump, as it could refuse to approve the license transfer or seek to impose any number of conditions on the deal before giving the transaction its approval.