CBS Sports at Stake As Paramount Acquisition Gets Contentious

There is new drama in the proposed $8 billion Skydance-Paramount merger as Skydance seeks to thwart a rival, late-arriving bid for the CBS Sports parent. 

Skydance—which has attempted to acquire the CBS Sports parent since last summer and said two weeks ago that it intends to close the deal by late June—told the Federal Communications Commission that a new, $13.8 billion bid for Paramount from a consortium called Project Rise Partners is “a transparent attempt to delay the commission’s approval of” the Skydance deal. 

Additionally, Skydance said Project Rise failed to produce a bid for Paramount during a prior, 45-day “go-shop” period specifically created to invite other offers.

“Project Rise is seeking to hijack this commission proceeding to buy time for litigation to proceed in the Delaware Court of Chancery, in an effort to force Paramount’s board to consider Project Rise’s belated—and unserious—bid to acquire the company,” Skydance attorneys wrote in a letter to the FCC. “But its objections here are as untimely as its bid, and it plainly lacks standing to object to the proposed transaction.”

Among the other claims in the Skydance letter were that many of Project Rise’s listed backers were entirely misrepresented.

“Project Rise’s alleged financing sources … are split between entities that are plainly incapable of funding a transaction of this size, on the one hand, and well-known investors who apparently were listed without their permission on the other,” Skydance’s letter continues. 

Project Rise said in a statement that “the attack by Skydance is outrageous and an effort to deflect from the real issue here: Project Rise Partners’ offer is superior to Skydance’s and would greatly benefit shareholders.”

Bigger Picture

The ongoing situation injects a significant new wrinkle in the pending Skydance-Paramount deal, which is aimed in part at providing a much more solid foundation for the company in a rapidly changing media industry. 

Paramount continues to amass streaming subscribers, and CBS Sports broadcasts, particularly of the NFL and March Madness, are a critical element of its entire operations. The company, however, missed analysts’ projections for both revenue and earnings in its most recent quarter. Like each of its main competitors, Paramount faces large-scale challenges surrounding an accelerating decline of the linear TV business. 

CBS News has separately been in the midst of a large-scale legal battle with President Donald Trump—a situation that could complicate the final deal stages considerably. If the pact is completed, though, a larger and stronger Paramount will likely be more of a force in the sports rights market. 

Skydance’s backers include the billionaire Ellison family and RedBird Capital Partners.

Editors’ note: RedBird IMI, of which RedBird Capital Partners is a joint venture partner, is the majority owner of Front Office Sports.