Paramount-Skydance Watch: Wall Street Analyst Increasingly Concerned Deal May Collapse

Core Viewpoint - The potential merger between Paramount and Skydance is facing significant challenges due to legal issues stemming from President Trump's lawsuit against CBS, which could lead to the deal collapsing if not resolved by early October [1][2][4]. Group 1: Legal Challenges - President Trump has filed a $20 billion lawsuit against Paramount's CBS for editing an interview with Kamala Harris, with ongoing mediation but no settlement reached [2]. - Analysts express concerns that Paramount's leadership is worried about personal liability related to a potential settlement with Trump [3]. - Politicians and public interest groups have warned that settling the lawsuit could be viewed as a bribe, complicating the FCC's review process [2][5]. Group 2: Financial Implications - The merger includes a $400 million breakup fee, which would not apply if the deal fails to close due to the lack of FCC approval [1]. - National Amusements, which controls Paramount, is struggling with debt and has received close to $400 million in loans from BDT Capital Partners and the Ellison family [5]. - The timing and terms of repayment for these loans remain unclear if the merger does not proceed [5]. Group 3: Market Sentiment - There is a prevailing belief among investors that the merger will eventually close, partly due to the relationship between Larry Ellison and Donald Trump [4]. - Paramount has indicated it expects the deal to close in the first half of the year, although it has scheduled its annual meeting for early July, which may impact timelines [4].