Redstone Sued Over Paramount-Skydance Merger as Angry Investors — and Outraged Liberals — Vent Over Messy Transaction, Bullying of CBS News

Legal problems are piling up from Skydance Media’s acquisition of Paramount Global — the parent company of CBS and CBS News — as a new lawsuit targets the former non-executive chairwoman of Paramount, Shari Redstone, over the terms of the merger.Skydance’s $8.4 billion merger with Paramount was finalized on August 7, giving the Redstone family $2.4 billion. The closely watched deal, which required the Federal Communications Commission’s approval because it involved the transfer of CBS’s coveted broadcast license, was seen as crucial to keeping one of Hollywood’s oldest studios intact and avoiding widespread layoffs. However, the merger and lingering allegations of political interference from the Trump administration prompted calls for lawsuits and investigations into the deal. Separately, a number of investors are angry about the terms of the acquisition for purely financial reasons, arguing that the Redstone family, after presiding over a calamitous loss of value for Paramount and CBS — which used to be separate companies — is exiting with a giant check at the expense of other shareholders. On Wednesday, the chairman of the New York-based hedge fund Gamco, Mario Gabelli, filed a lawsuit against Ms. Redstone and National Amusements, which held the controlling stake in Paramount shares, in Delaware Chancery Court, over the “unfair and inequitable” payout. Mr. Gabelli has been skeptical of the Skydance deal since the bidding process and argues that the deal disadvantaged Paramount’s investors while giving the Redstones a cushy windfall. The co-CIO of Gamco, Christopher Marangi, said the firm has an “obligation to pursue this case on behalf of its clients. Gamco voiced its concerns early in the process and asked at minimum for more transparency regarding what NAI was receiving for their identical Paramount voting share.”“GAMCO also requested, as is customary in these types of control transactions, that the merger be put to a vote of the minority shareholders. These concerns were ignored and, lacking the ability to continue holding voting shares in the new Paramount entity, GAMCO was forced to redeem its shares for cash,” Mr. Marangi said. “We now look to the Courts to rectify the situation.”Mr. Gabelli has been seeking more information from Paramount since July 2024, when he filed a books and records request about the deal. In April, a Delaware judge found that Mr. Gabelli’s company “has stated and proved a credible basis to suspect wrongdoing” by Paramount in its compliance with the books and records request, but declined to order the company to hand over more documents than the 10,000 it had already produced. Mr. Gabelli alleges that Ms. Redstone was paid more than $60 per share for her Class A shares of Paramount, while Gamco and other shareholders received $23 per share. Representatives for Paramount did not respond to the Sun’s request for comment by the time of publication. Representatives for Ms. Redstone declined to comment. Skydance, owned by David Ellison, the son of the world’s second-richest man, Larry Ellison, a Trump supporter, acquired National Amusements as the first step in the merger and its acquisition of Paramount.Whether the lawsuit will proceed is yet to be determined, but it could complicate Mr. Ellison’s efforts to focus on the future of his new asset and on revitalizing its various properties.Mr. Ellison told reporters on his first day of owning Paramount that he does not want to “politicize” the company in “any way.” Yet, the last two weeks have shown that he may have a hard time putting the past behind him and his new asset. A left-wing press freedom organization, the Freedom of the Press Foundation, which is also a Paramount shareholder, said it intended to sue if the company settled Mr. Trump’s $20 billion lawsuit against CBS over its editing of Vice President Kamala Harris’s October 2024 interview with “60 Minutes.” Meanwhile, left-wing Democratic senators, such as Elizabeth Warren and Ron Wyden, have called for investigations into the settlement with Mr. Trump. The general counsel of Skydance, Stephanie Kyoko McKinnon, sent a letter to Ms. Warren, Mr. Wyden, and Senator Bernie Sanders in response to the merger, stating that the company “fully complied” with federal laws. The letter did not satisfy Ms. Warren, who said the answers were “dodgy” and “raise even more questions about whether Paramount and Skydance engaged in corrupt side deals.”Because Democrats are in the minority in Congress, the ability of these senators to launch formal probes is limited.Mr. Trump said he anticipates that Paramount will air $20 million worth of conservative advertisements. However, the previous management of Paramount denied any knowledge of such an arrangement, and Skydance has refused to comment, which has led Democrats and left-wing reporters to suggest that the company made an improper side deal with the president as a sweetener to the CBS settlement. On August 5, a former news anchor at a local CBS station, Katherine Merrill, sued her former employer, CBS Inc., and Paramount, alleging she was discriminated against and demoted because she was white. Before the Trump settlement, the Wall Street Journal reported that members of Paramount’s board fretted that paying to resolve the Trump lawsuit could open them up to civil or criminal investigations

Redstone Sued Over Paramount-Skydance Merger as Angry Investors — and Outraged Liberals — Vent Over Messy Transaction, Bullying of CBS News

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