New filings with the Federal Communications Commission outline a plan to “strengthen and revitalize” the CBS broadcast network and its owned-and-operated stations if Oracle founder Larry Ellison is allowed to take control of the broadcast licenses.
Ellison, father of Skydance founder and CEO David Ellison (who would be Paramount’s future CEO if the merger goes through), would control the new company through a handful of corporate entities, along with Gerry Cardinale’s RedBird Capital. Companies controlled by Larry Ellison are contributing the bulk of the money needed to close the deal, hence the voting control.
But first it must receive government approval, and in addition to an antitrust review by the Federal Trade Commission or the Department of Justice, that means approval from the FCC to transfer CBS' broadcast licenses. That requirement prompted the presentation, which outlines the deal and the players involved.
In the filing, Ellison stresses that it does not currently own any licensed broadcasting businesses and will therefore not reduce competition in the industry.
And they tout their plans to invest in both CBS and its local stations.
“CBS and the local O&O stations, and their robust distribution networks, are among the Company’s strongest and most stable assets,” the filing states. “With an improved balance sheet, New Paramount will be able to make strategic investments in the legendary newsgathering and reporting efforts of the CBS National Television Network and the Company’s local O&O stations. These investments will ensure that both the national network (which reaches all television markets) and the O&Os continue to serve as trusted sources of news. The investment in the CBS Television Network will similarly help ensure that popular live sports and highly rated entertainment programming remain available to viewers over the air and will benefit CBS affiliate stations. In turn, these iconic broadcast assets will serve as pillars for the growth and success of New Paramount more broadly.”
With respect to O&Os, the filing outlines a rough plan to “preserve and enhance the legacy and broad reach of the CBS national television network and the company's 28 owned-and-operated local television stations (“O&Os”), while leveraging their historic strengths to successfully address the challenges presented by today's dynamic and disruptive media landscape.”
That includes investing in the CBS stations' digital footprint. “The planned investments in the O&Os strengthen not only their online presence, but also their sustainability to continue to provide important local and national news and other programming on the air,” the filing states.
In a conference call with reporters after the Skydance deal was announced, Jeff Shell, who will become chairman of the new company, called CBS a flagship asset for the company.
“I think if there’s one change for CBS, it’s probably that we’ll be managing it a little bit more aggressively for cash flow, which means making some tougher decisions about time periods and things like that going forward, which you have to do when you have a declining business,” Shell says. “But there’s really no change in the overall vision for the asset, other than we believe it will be an active part of all our future plans.”