Skydance Media has taken aim at Project Rise Partners in a new letter to the FCC, arguing that the investor group is “seeking to hijack” the review process of its pending $8 billion merger with Paramount Global after it filed a formal objection with the agency last week.
The David Ellison-owned studio has accused PRP of trying to delay the closing of the transaction to force Paramount’s board to consider its “belated” and “unserious” $13.5 billion bid to acquire the media giant and to buy time for a shareholder lawsuit making its way through the Delaware Court of Chancery from a group of New York City pension funds.
The class-action complaint, which was seeking a court order to temporarily block the deal while its claims are being resolved, alleges the media giant failed to sufficiently consider PRP’s offer, which the pension funds say is superior to the Skydance deal. A judge has denied the request for a temporary restraining order, but said it would expedite its review of the lawsuit in order to rule on the case prior to the completion of the FCC’s review.
In its objection, PRP said the deal raises “serious public interest concerns,” including the risk of perpetuating anticompetitive bundling practices, threats to national security due to a minority stake from China’s Tencent Holdings, undermining national and local broadcast news by increasing retransmission consent prices and the risk of job losses and inaccurate news reporting due to Skydance’s plans to leverage artificial intelligence. It also requested that Skydance turn over various documents related to its plans for Paramount and how it plans to address the concerns.
But Skydance argues that the company lacks standing and that none of its “manufactured concerns about the public interest implications of the Proposed Transaction would impose any cognizable harm on Project Rise or its members.”
It also said that PRP has “never demonstrated that it has the necessary
financing” and that the group’s lead investors, Cinemoi North America president and CEO Daphna Ziman and Malka Equities CEO Moses Gross “lack the experience and credibility to execute a transaction of this size.”
“As a legal matter, Project Rise ignores the bedrock rule that the Commission ‘may not consider whether a different buyer would better serve the public interest.’ But even if such a comparison were permitted, it would not be a close call,” Skydance’s lawyers Latham & Watkins wrote on Monday. “Skydance’s fully funded plan will infuse Paramount with additional capital and combine Skydance’s talented, American management team and storytelling prowess with Paramount’s venerated brands. By contrast, Project Rise has advanced an unfunded and unrealistic proposal backed by a leadership team without relevant experience.”
Latham & Watkins further noted that PRP was invited to submit a merger proposal during the 45-day go-shop period that took effect following the announcement of Skydance and Paramount’s $8 billion deal in July, but that it failed to do so.
According to Paramount’s S4 filed with the U.S. Securities and Exchange Commission, PRP expressed an interest Paramount’s special committee evaluating bids about submitting a proposal as early as Aug. 15, but didn’t formally submit anything until Aug. 26 — five days after the go-shop expired.
“Project Rise’s letter represents a bad-faith effort to sully the reputation of the Skydance Consortium and to delay approval of the Proposed Transaction,” Skydance’s letter concluded. “Having failed to submit a timely (or credible) bid to acquire Paramount, Project Rise now resorts to a misuse of the Commission’s process, asserting untimely and frivolous arguments without any demonstration of standing. The Commission should reject its baseless claims and proposed information requests out of hand.”
Paramount, whose shares are up 10.8% year to date and 17.4% in the past six months, has said the Skydance deal is on track to close in the first half of 2025.
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