The forthcoming Chairman of the FCC under the second Trump Administration has signaled that the Commission will give credence to a public interest law firm that has filed a petition challenging the pending merger of CBS News & Stations parent Paramount Global and Skydance Media.
Commenting on the Elon Musk-owned social media platform X, Carr said on Wednesday afternoon that Paramount’s sale of CBS broadcast licenses to Skydance remains pending before the Commission as The Center for American Rights “raises what it describes as significant concerns” about the structure of the proposed transaction in a petition filed earlier this week with the Commission.
These concerns, Carr said on X, include “ones that go to CBS’s adherence to the public interest standard,” a standard Carr has spoken widely of across various media appearances in the last several weeks.
“The FCC will need to address these concerns,” Carr penned.
Monday (12/16) was the Petition to Deny date in MB Docket 24-275, which sees the Commission seek public comment on the proposed transfer of control of Paramount Global from the current parties controlling Paramount’s single majority shareholder, National Amusements, Inc. (NAI) — namely Shari Redstone.
This stake in Paramount Global would end up in the hands of Skydance Media, controlled by CEO David Ellison.
As CAR — “a non-profit, non-partisan, public-interest law firm that represents consumers of broadcast media to ensure accountability for powerful media institutions in our society” — sees it, there are “deep concerns about the proposed merger of Skydance Media and Paramount Global because both have appeared to breach the Commission’s rules.”
Perhaps more alarming is CAR’s assertion that “serious questions have been raised about Skydance Media’s ties to the Chinese Communist Party.”
In 2018, to better access the important Chinese consumer entertainment marketplace, Skydance formed a strategic partnership with Tencent, a global giant. This, Skydance explains on its corporate website, allows the company to tap into Tencent’s “expertise and unmatched scale in China, the second largest media market in the world, further strengthening its global footprint.”
In particular, Tencent’s partnership allowed for co-financing opportunities on all Skydance films in the People’s Republic of China, in addition to marketing, distributing and merchandising efforts. The partnership also supports collaboration in television, interactive and virtual reality.
In early 2023, the Chinese Community Party acquired shares in both Tencent and online market Alibaba that according to Business Insider give the government in Beijing through the CCP special voting rights over some business decisions.
This concerns CAR. While Tencent holds a minority stake in privately held Skydance, the company’s October 2022 completion of a $400 million strategic investment round led by KKR — a first-time investor — saw Tencent put more Yuan into Skydance. RedBird Capital Partners also participated in that fundraising round.
While the Tencent investment in Skydance is now being scrutinized, CAR also questions the Paramount side of the proposed merger on its belief that CBS News “has exhibited improper ideological bias, and its CBS television division has apparently engaged in illegal racial quotas for its hiring.”
Based on that assessment, the Center asks the Commission to condition its grant of approval of the merger on specific commitments by the new corporation to address these issues, and to place the approval on a probationary status for an appropriate period of years until compliance with the conditions is evident.
Until now, “undue foreign influence from China” has focused on telecommunications infrastructure in the U.S., leading to just-approved “rip and replace” rulemakings at the FCC. Huawei is commonly thought of as is ZTE.
“In conclusion, this Commission must ask serious questions of Skydance and
Paramount,” CAR says in its 24-page petition. “These are two huge institutions with tremendous power in the modern media landscape. Their past track record indicates numerous recent activities at odds with the public interest as this Commission has defined it over the decades. As a result, the Commission should condition its approval on specific commitments to rectify problems in these three areas, and place that approval on probationary status for a term of years until New Paramount has adequately demonstrated it will protect content from undue foreign influence, promote viewpoint diversity on the airwaves, and treat all employees and candidates equally without regard to race or gender.”
Oppositions to the Petitions to Deny must be filed no later than Thursday, January 2, 2025; replies to those filings are then due by January 13, 2025, as the Rosenworcel Commission seeks to wrap up the approval process before time runs out on Democratic control of the FCC.