Famed money manager Mario Gabelli, one of the largest shareholders in Paramount Global, urged the Federal Communications Commission to halt its review of the transfer of broadcast licenses in the media giant’s $8 billion merger with Skydance.
Gabelli requested the delay so that he could probe for “potential fiduciary and/or federal securities violations” against Paramount’s minority shareholders, according to a letter he sent to the agency made public Tuesday.
His investment firm, Gabelli Value, owns approximately 13% of Paramount’s Class A common stock – the second largest Class A shareholder behind Shari Redstone and National Amusements – and roughly 900,000 Class B shares.
“Gabelli Value respectfully requests that the Commission defer resolution of the application until Gabelli Value has completed its inquiry and determined whether to initiate litigation against Paramount’s board of directors, NAI, and/or Skydance for breach of fiduciary duty (or aiding and abetting) under Delaware law and/or whether the transaction violates federal law. We are available to discuss this matter at your convenience,” the letter said.
Gabelli filed the request with the FCC on Nov. 8 — four days after Paramount released a 699-page S-4 prospectus with the Securities and Exchange Commission about the Skydance deal, which would hand control of assets that include CBS to the independent studio owned by tech heir David Ellison.
However, Gabelli’s letter to the FCC claims Paramount’s “proxy statement does not provide adequate disclosures concerning the process leading up to board approval of the merger or the fairness of the merger consideration.”
“Importantly, it does not provide stakeholders with adequate information to determine whether consideration that should be paid to shareholders is being diverted to [Shari Redstone’s] NAI for its controlling stake in the Company.”
Skydance and Paramount declined comment.
Redstone, the daughter of the late media tycoon Sumner Redstone, is expected to walk away with a nearly $2 billion windfall for her her controlling stake in Paramount.
After filing his request for more details last week, Gabelli told TheWrap: “I want my clients to have the option of continuing to own the voting shares. Why should they get squeezed out?”
“Secondly, are they worried I would discover a whole bunch of numbers that would indicate that they should get more money because the other guy got more money? I don’t know,” he said.
The complex deal includes Paramount buying the smaller Skydance and then merging with the company.
Class B commons can then sell some Paramount stock for $15, a premium to their current price of $11.45
The controlling Class A shareholders get $23 or a chance to convert their shares into Class B common, as The Post previously reported.
The deal — which does not require a shareholder vote — is expected to close in the first half of 2025.
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