Month: April 2025

SKYDANCE-PARAMOUNT Merger – More than Just News

A chess match with big players and high stakes, but employees may suffer.

The proposed acquisition between Skydance and National Amusements Inc., the parent company of Paramount, is a boardroom chess match with multiple players and multiple outcomes.

Paramount is owned by the parent company National Amusement, of which Sheri Redstone owns a majority percentage of voting stock.  They operate such networks as BET, MTV, Nickelodeon and Paramount Films.  It is also the parent of the CBS television network, which includes CBS News.  Skydance was founded in 2010 by David Ellison.  Its claims to fame have been producing “Top Gun: Maverick” and “Mission Impossible—Ghost Protocol.”

THE DEAL

According to Cord Cutters website, here are the details of the deal:

The Skydance-Paramount deal, with an enterprise value pegged at $28 billion, promises a major shakeup in the media landscape. Skydance Media, LLC, valued at $4.75 billion in the merger, brings its production heft—think Mission: Impossible—to Paramount’s storied assets, including CBS and the Paramount film studio. National Amusements Inc. (NAI) shareholders, led by Redstone, will pocket $1.75 billion plus the assumption of NAI’s $650 million debt, totaling a $2.4 billion enterprise value. Paramount’s Class B common shareholders are set to receive $15 per share. Funding comes largely from the Ellison family—Oracle founder Larry Ellison is contributing $6 billion—alongside $2 billion from RedBird Capital Partners. An October filing clarified that Skydance CEO David Ellison, not Larry, will hold 100% of the family’s voting interests in the merged entity.

This merger was first proposed in 2024.  Talks originated, then were apparently cancelled by National Amusements, Inc. They resumed shortly thereafter.  By July, 2024 the current deal was presented. 

ROADBLOCKS

There have been several hurdles to overcome.  In February 2025, Paramount Global and Skydance Media, LLC, received approval from the Securities and Exchange Commission.  The deal soon after received approval from the European Commission, saying it presented “no significant competition concerns within the European market.”

It also needs approval from the U.S. Federal Communications Commission, which is still in play.  Here is where it gets interesting.  The FCC is currently headed by Brendan Carr, a recent Trump employee.  Trump has been pressuring acquiring companies to back off/do away with Diversity, Equity and Inclusion (DEI) programs.  Paramount recently announced they were doing just that.  Mr. Trump had also filed a $20 Billion lawsuit against CBS News, claiming they edited an interview with Vice President Kamala Harris he claims was biased towards her and from him. 

To add to the drama, Bill Owens, Executive Producer of 60 Minutes abruptly resigned last week.  In The Last Minute segment of the April 27 broadcast of 60 Minutes, host Scott Pelley addressed his resignation.  Mr. Pelley summed up his message by saying, “Bill felt he lost the independence that honest journalism requires.”  There has been consolidation in the news media, along with the entertainment industry and the publishing industry.  This consolidation will be addressed in a later article.

ANALYSIS

Consolidation in the entertainment industry is not as “crucial” as it is, say, with health care, insurance, groceries, housing.  Indeed, there is competition with such companies as Netflix, Disney, Apple, Amazon, as well as network television, movies, theatre, concerts.  However, what all companies involved in consolidation have in common is that there are both employees and customers whose livelihood is impacted, in different ways.  Company working culture may significantly change for the worse.  Customers may be faced with poor/indifferent customer service or continually rising prices. 

SOLUTIONS

The proposed acquisition between Skydance and National Amusements Inc., the parent company of Paramount, is a boardroom chess match with multiple players and multiple outcomes.

Paramount seeks a buyer because it is hemorrhaging money, mainly due to cable cutters who are now streamers.  They were slow to adjust to changing market conditions.  They made some strategic mistakes.  If Paramount is sold, Shari Redstone will come out well, as do some owners in the aftermath of blunders.   If it is finally approved, the big continue to get bigger—in this case it would be Skydance Media, LLC.  If it fails, National Amusements Inc. may have to sell off assets or face bankruptcy sometime down the road. 

With all the drama, this would make for a good movie, wouldn’t it?  I doubt if people who lost their jobs or faced a negative company culture would ever see it.  What do you think?

Google Draws the Justice Department on Monopoly Chance Cards

Judge rules with the Justice Department on Google Advertising Practices

On Friday, April 17, 2025 a Judge ruled with the Justice Department on Google advertising practices.

United States District Judge Leonie Brinkema ruled in favor of the Justice Department on charges against Google involving creating a monopoly with publisher ad servers and ad exchange markets.  Judge Brinkema also ruled that Google did not create a monopoly in ad markets. 

An excerpt from her ruling is as follows:

With the benefit of a three-week bench trial and extensive post-trial filings, the Court finds that Plaintiffs have failed to prove that there is a relevant market for open-web display advertiser ad networks, but have proven that Google has violated Section 2 of the Sherman Act by willfully acquiring and maintaining monopoly power in the open-web display publisher ad server market and the open-web display ad exchange market, and has unlawfully tied its publisher ad server (DFP) and ad exchange (AdX) in violation of Sections 1 and 2 of the
Sherman Act.

Google has been previously pursued for having a monopoly with its Chrome browser, primarily by being a default browser in phones, tablets, and computers.  The Justice Department has asked Judge Amit Mehta to divest Chrome from the parent company. 

ANALYSIS

I do not place ads with Google so it is harder for someone like me to determine if there is a true monopoly in this case.

As for Chrome, if competition with other browsers is the goal, this could be worked out without divesting something which they themselves created.

A stealth way Google, as a whole, operates a monopoly is through its acquisitions.  Google purchases companies that they could simply work with as a customer or create a partnership project.  By going the route of purchasing a company they prevent that company working for a rival or working with a third party against Google’s interests.  This is a higher priority over their argument that their company benefits from the acquisition

SOLUTIONS

Judge Brinkema ruled with the Justice Department on Google Advertising Practices on two of three charges.  Now the Judge will decide what action to take against Google.  In my opinion, if the goal is to create more competition, what is needed is for ad customers to have not only choices available but also be consciously aware of the choices and be allowed to select options.

As for the Chrome browser, an alternative to divesting would be to allow device owners to pre-select a browser from a list with brief descriptions of each.  Moving away from having the browser both pre-determined and nearly impossible to replace would be in the best interest of consumers. 

As for the monopoly with its acquisitions, here is a list of companies acquired by Google.  Look at the names, focus on what they do, and determine for yourself whether markets would be better off if these companies were once again independent and free to pursue their own customers. 

Zuckerberg May Have Meta’s Match

Meta may have tried to neutralize a potential competitor

META

The Federal Trade Commission is beginning an anti-trust suit against Meta.  This time it involves its owning What’s App and Instagram.  Their argument is a monopoly exists with owning these acquisitions, they wanted to neutralize a potential competitor, and they should be spun off.

BACKGROUND

A report on National Public Radio gives a background of the government’s case against Meta:

“The government contends that a “buy or bury” strategy propelled Meta’s acquisitions, leading Meta to gobble up competitors it viewed as threats, or to squash the rivals out of business altogether.”

It adds that an internal Meta email says they purchased Instagram to “neutralize a potential competitor” and the FTC believes this is against federal law.

The report says that Meta will summarize its argument that it is being punished for being innovative and aggressive, in other words…. successful.

According to Wikipedia, Meta/Facebook has acquired 91 companies, including What’s App and Instagram.  They have also acquired an interesting company—Onavo.  Onavo was an Israeli company in business to acquire and analyze data on a client’s competitors.  Facebook has apparently used this to track successful startups for acquisition.  The website www.onavo.com has a Facebook message that says something has gone wrong.  Facebook changed it to Facebook Israel, which promotes travel to Israel.  It has also apparently deleted numerous posts about Palestinians. 

In 2010 Facebook posted a video available on YouTube.  In it Mark Zuckerberg talks about the theory behind Facebook acquisitions.  He says that Facebook, up until then, had acquired companies not to keep the company but to acquire the talent behind it.  In other words, the owners become employees (once again) and the startup disappears.  The official line is that this is growth to them.  However, it is entirely possible to acquire good talent through direct hire, including through employee search, instead of going the acquisition route.

WHAT’S APP

According to Wikipedia What’s App was founded in 2009 by two individuals, Brian Acton and Jan Koun, previously with Yahoo! They received venture capital backing.  They sold the company to Facebook in 2014.  Acton left What’s App in 2017 over disagreements with Facebook.  Later that year he founded the competing app Signal.  Koun left the following year, also with conflicting issues with Facebook. 

ANALYSIS

FACEBOOK

There is nothing wrong with companies like Facebook/Meta with being successful.  This is Meta’s argument.  However, the end does not justify the means in this case.  Defining success through innovation – that which you started yourself from scratch – is not the same as defining it via acquisition.  And if you have acquired 91 companies, that in and of itself should warrant charges of being a monopoly.  I am not sure if people in the FTC under the Trump administration have a true anti-trust focus.  Trump supporters seem to be focused more on going after the social media apps more for suppressing freedom of speech.

SOLUTION

Breaking up the acquisitions and returning them to independent status is, IMO, a good solution.  This would return them to a position again of charting their own course. Meta will present their arguments, and some may have some weight.  It really comes down to balancing the arguments and determining which has a greater priority. 

The FTC’s argument is that Meta seeks to neutralize a potential competitor.  If judicial decisions like this fail in the courts, federal law would need to be strengthened to make the anti-trust arguments more airtight.  The law, for federal judges to agree, should be written such that it promotes what is in the best interest of the country as a whole, and not one just for individual business.

Some Hospitals are Dying as well as their Patients – Here’s Why

Private Equity’s track record with acquisitions should be basis for anti-trust

Hospital in Financial Distress

The impact of private equity’s expansion into healthcare is important.

On April 9-10 the PBS NewsHour broadcast a two part report on the effect private equity firms have had on the hospital industry. In this case it was on Cerberus Capital Management

“The impact of private equity’s expansion into health care” was the first installment:

Steward Health Care was once the largest private hospital system in the country. When the private equity-backed network filed for bankruptcy last year, it devastated providers and patients. Five of the eight Steward-owned hospitals in Massachusetts were salvaged by the state and two were shuttered.

Narrated by Paul Solman, it introduced the audience to Carney Hospital and Nashoba Valley Medical Center, both located in Massachusetts. They were purchased by Steward Heath Care, a subsidiary of Cerberus to manage its hospital purchases. They both closed after Steward acquired them, primarily due to not paying bills

People will come in for surgery. They couldn’t get the equipment. So they had to send them home. Sorry. It happened all the time. They owed so much money to creditors for equipment That they wouldn’t give them anymore.

Elaine Graves, Former Nurse at Carney Hospital

On the Steward Health Care website, they actually list the hospitals in Massachusetts and ones in Texas that were closed. It shows only one operating hospital, in Pennsylvania.

Steward Health Care filed for bankruptcy. Its CEO, Ralph de la Torre resigned after refusing to testify before Congress citing his Fifth Amendment right. A website entitled “The Truth About the Steward CEO” justifies both de la Torre’s actions and compensation.

The second episode, entitled “How private equity’s increasing role in health care is affecting patients,” has interview with experts who venture further into the effect decisions by private equity owners have on others than the company’s shareholders.

Make money, leave, make it however you want, make it for people who are invested in making money, and then you have got health care, which is all about delivering care to people. The cost is not the first thing. The delivery care is the first thing. And those two things do not mesh.

State Sen. Cindy Friedman (D-MA)

Solman provided some additional information on the history of private equity in the health care industry:

Steward bought 37 hospitals around the country.  More than 450 hospitals nationwide have been taken over by private equity, as well as nursing homes, emergency rooms, doctor’s practices, and air ambulances. One analysis finds that private equity investors spent more than $200 billion on health care acquisitions in 2021 alone, and $1 trillion over the past decade.

Analysis

The impact of private equity’s expansion into healthcare is important. Hospitals are struggling through the country. When an outside buyer comes in with the possibility of infusing cash to get the financial position in shape, it may look like a good deal. If the acquired company is going bankrupt, and the private equity firm is earning profits, something is definitely wrong with this scenario.

There are several issues involved here. One is, are all private equity firms bad or are there just some bad performers. Related to that is, are there any private equity firms that have actually done a good job at creating a sound financial footing that employees/customers are happy with? If so, what is their business model? Hospitals are in financial straits because of their never-ending battle with insurance companies and discrepancies over payments. In addition, this situation with Steward Health Care also involves such issues as privatization, financialization, stakeholders versus shareholders and issues with small towns.

The history of a private equity’s acquisitions should be a basis for anti-trust violation.  Acquisitions that have either failed or gone into debt and bankruptcy are sold off as a tax write-off, there is something wrong here.  This is not capitalism.   There should be a law that required the private equity company itself to assume the debt for its acquisitions.  More on this will be coming in the later months.

Independent doesn’t mean you have to go it alone

There are organizations that can help the independent thrive as independent

There are organizations that can help the independent thrive as independent

Are you an independent business?  Do you want to stay independent?  Does your independence feel threatened by those that are bigger than you?

One is the National Federation of Independent Business (NFIB).  Their motto is as follows:

We are a nonprofit, nonpartisan, member-driven organization that advocates on behalf of America’s small and independent business owners—both in Washington, D.C., and in all 50 state capitals.

They are a business advocate, gathering member opinions nationwide in order to steer policy priorities.  They focus on taxes, healthcare, labor and regulations.

They also focus on competitiveness, working that both government and massive businesses make it impossible for them to compete.  Their website has a video on their anti-trust advocacy.

Another institute is the Center for American Entrepreneurs.  Their motto is as follows:

CAE is a nonpartisan Washington, DC-based research, policy, and advocacy organization that works with policymakers at the federal, state, and local levels across the country to build a policy environment that promotes new business formation, survival, and growth. We pursue this objective through a wide range of activities

They work in advocacy through an Advisory Council and provide issue analysis through a Research Council.  They also have a Board of Directors made up of entrepreneurs, startup investors and startup mentors.

There is also the U.S. Small Business Administration.  Their historical role has been to approve small business loans.  However, they are also involved with small business disaster relief.  In addition, their website provides links to various issues with starting a business, including how to win federal contracts. 

In  December, 2016,  Forbes magazine published the article, “43 Reasons You Should Support Small And Independent Businesses.”  They are primarily quotes from small business owners themselves.  If you identify with one or more of these, you may want to start a campaign to promote them to the general public.  In addition, they offer an Entrepreneurs and Small Business newsletter you can sign up for.