A gravely disturbing development emerged today, as word about the fragility of the merger between Skydance and entertainment giant Paramount (PARA) emerged. The merger was so fragile that, at one point, Shari Redstone herself reportedly took a hand in Paramount’s news operations, calling on CBS to “…delay sensitive stories about Trump” until after the merger was accomplished. Paramount investors were not happy and shares dipped down fractionally in the closing minutes of Thursday’s trading.
Since the government had to approve the merger—a point which Paramount and Skydance are still trying to work with to this very day—it behooved Paramount to keep on the good side of every candidate involved. Whether that be Kamala Harris, former vice president and Presidential candidate, or Donald Trump, former President and now current President. But keeping both sides sweet at the same time would require a lot of tapdancing, and Shari Redstone, Paramount’s owner, personally stepped in, reports note.
Redstone reportedly called on CBS News officials to “…delay any sensitive stories about President Donald Trump until the deal is finished.” The request went to CBS News CEO George Cheeks, reports noted. Representatives for both Paramount and CBS News would not offer comment on the matter, and a lawsuit over the matter is still currently outstanding. With Paramount, the Wall Street Journal noted, prepared to offer as much as $20 million to settle the suit—about a thousandth of what Trump sought at $20 billion—this matter is not likely to be settled soon.
Is The Deal Dead?
Considering what we know so far, things are not exactly looking good for the merger. We know there are several lawsuits still outstanding. We know that the Federal Communications Commission (FCC) has only just started to talk about what it would need to see in order to sign off on the deal. We know that, out there in the ether, Mario Gabelli is still lying in wait with a potential battle plan.
A report from Puck took a closer look at the matter, and tried to pull all these various threads together into potential outcomes, including the possibility that Trump may scuttle the deal altogether by putting just a bit of pressure on the FCC to do the job. And with Shari Redstone herself in line for a nine-figure payday, at last report, any attempt to push for a quick settlement could prompt another wave of lawsuits from shareholders claiming she is pursuing her own enrichment.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on two Buys, seven Holds and six Sells assigned in the past three months, as indicated by the graphic below. After a 14.25% loss in its share price over the past year, the average PARA price target of $12.25 per share implies 5.06% upside potential.
