Just weeks ago, Paramount Global employees were optimistic about finally entering a more hopeful era thanks to the company’s long-awaited merger with Skydance Media. Management expected the $8 billion deal to close by the springtime.
But as the company gets set to re-enter the Wall Street spotlight Wednesday afternoon with its fourth-quarter earnings report, the skies have gotten cloudy. In the chaotic early phase of Donald Trump’s second stint in the White House, federal regulatory approval of the $8 billion Skydance deal is no longer considered a formality and Paramount faces a bind with CBS News. While the overwhelming sentiment on Wall Street, inside the company and in media circles is that the transaction will indeed close, the timeline and cost of a potential settlement with Trump are big variables in the equation.
Amid the deal saga, there is also the financial reality facing a legacy entertainment player in a marketplace already unsettled by pay-TV cord-cutting, shifts in theatrical moviegoing and the rigors of streaming. Analysts expect quarterly revenue of slightly more than $8 billion and earnings per share of 13 cents. Questions looming over the October-to-December period include the size of the boost from political and NFL ad spending, and the extent of the lift from the sale of a stake in India-based Viacom18, which closed during the quarter. The company’s streaming operation, which has 72 million subscribers, will be under scrutiny for not only subscriber growth but a long-awaited turn toward profitability.
Peers in the media sector have reported mixed results during this earnings season, with even long-invulnerable Comcast suffering a double-digit stock slump after its quarterly report. Shares in Paramount have risen 12% in 2025 to date, with investors more optimistic about its prospects when combined with Skydance.
Speaking of which, Trump and Brendan Carr, his appointed head of the Federal Communications Commission, have blasted CBS for what they call “news distortion” in a 60 Minutes broadcast last fall.
An FCC complaint, along with a $20 billion lawsuit filed by Trump, allege that footage of Kamala Harris was manipulated. Prompted by a conservative group’s objections, the FCC demanded that CBS release an unedited transcript of its interview with Harris. When the network produced the transcript, showing that its editing was not out of the industry norm and arguing that it was not deceptive, Carr didn’t dismiss the complaint but sent it off for public comment. That’s on a separate track from the review of the merger review, which needs the FCC’s blessing to approve the transfer of broadcast licenses.
Carr’s actions are in line with the Trump administration’s overall effort to threaten or punish the press, at a time when major media outlets are navigating not just political upheaval but mounting financial stress. CBS has a deadline of Friday to formally respond to the complaint. The customary 180-day period when the FCC officially considers the transfer of broadcast licenses will elapse in April, though it can be extended.
Despite the strong support of Trump shown by Paramount chair and controlling shareholder Shari Redstone and Larry Ellison, the billionaire financial backer of the Skydance deal, the government is looking to extract concessions. It has similarly targeted Disney, wrangling a $15 million settlement for misstatements by ABC News. Redstone has discussed the possibility of paying to settle Trump’s lawsuit, which would likely smooth the path toward closing the merger but could also spur a massive backlash among news staffers and do lasting reputational harm.
None of the many sources Deadline canvassed this week about the state of the merger believe it will fall apart at this stage, which would be a crushing twist to the already-epic quest by Redstone to find a buyer. But the snags the deal has encountered, complete with the now-customary social media fricassee, have sent a chill up the spines of dealmakers who had entered 2025 salivating at the possibilities.
“Even with a Trump presidency, we don’t necessarily expect a significantly easier path for media consolidation,” TD Cowen analyst Doug Creutz wrote in a recent note to clients, citing the first Trump administration’s efforts to block AT&T’s acquisition of Time Warner. we note that the Trump Administration’s DOJ attempted to block AT&T-TWX during his first term.
Morale at Paramount was cited as a concern in many of Deadline’s conversations with sources. “The biggest question I have is about how they manage through this period, having been through so much, and keep workers motivated,” one Wall Streeter said. Current and recently departed Paramount execs say the layoffs of 15% of U.S. staffers have already taken a toll, though the leaner organization is poised to get a major infusion of resources from Skydance.
Michael Morris, an analyst with Guggenheim Securities and a longtime bull on Paramount stock, wrote in a recent note to clients that he expects the transaction to close. The noise and potential delays could mean “the companies could incur additional legal fees,” but larger challenges also await the combined entity. The fourth quarter financials, he wrote, could also suffer due to the less-than-knockout grosses for Gladiator II and college football ad trends that also undershot expectations.
The three occupants of Paramount’s Office of the CEO (George Cheeks, Chris McCarthy and Brian Robbins) are unlikely to address the state of the Skydance review in any detail during this afternoon’s quarterly conference call with analysts. An update on expected timing for the deal closing could be provided, some sources told Deadline. The company is in a registration period with the SEC and can’t really discuss anything that’s not in those documents, one analyst noted. But they may well address timing and issues required to allow them to close.
Creutz said the “The Skydance deal remains in purgatory pending regulatory approval, and it’s not clear what path new management intends to take,” said analyst TD Cowan analyst Doug Creutz in a note. Looking across Par’s assets, he said, the company is at a disadvantage to its rivals. “Generally speaking, we don’t view the company’s fully owned IP portfolio as being comparable to Disney’s or WBD’s.
With Wall Street still not necessarily convinced of the power of a combined Paramount-Skydance merger. Although they are willing to be, the company remains in limbo. Streaming losses have been pared but there’s still no work on anticipated profitabily (X), the film slate (Y) and heavy exposure to linear television (Z). And analysts are looking for X, Y and Z.
Ted Johnson contributed to this report.