Media giant Paramount Global (PARAA) and independent film producer Skydance Media are fighting against efforts to block their proposed $8.4 billion merger. The companies have asked the Federal Communications Commission (FCC) to dismiss objections from critics and allow the deal to proceed.
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The combination of two major Hollywood studios, announced in July 2024, is expected to close in the first half of 2025. However, the deal requires approval from the FCC due to its involvement with broadcast TV stations.
Objections Raised by Critics
It must be noted that in December 2024, the Center for American Rights, a non-profit law firm, raised concerns about the deal. It said that the merger should only proceed if Paramount commits to avoiding foreign influence and promoting diversity in its broadcasts. The group highlighted that China’s Tencent Holdings (TCEHY) is an investor in Skydance.
Further, Fuse Media, a Latino-owned media company, accused Paramount of favoring its own content on its streaming service, Pluto. Meanwhile, another media company, LiveVideo.AI, claimed that the auction for Paramount was unfair, questioning the process.
Paramount and Skydance Counter These Allegations
Paramount and Skydance argued that these claims are baseless and don’t provide any reasons for the FCC to block the merger. They stated that the objections don’t show any harm to competition or consumers.
In addition, the companies clarified that any stake held by China’s Tencent in Skydance will be a minority stake with no voting rights after the merger. Regarding LiveVideo.AI’s accusations, they rejected the claims about the auction process due to a lack of concrete evidence.
What Is the Future of PARA Stock?
Turning to Wall Street, PARA has a Hold consensus rating based on three Buys, seven Holds, and four Sells assigned in the last three months. At $12.60, the average Paramount price target implies a 19.1% upside potential. Shares of the company have declined 7.2% over the past six months.
