Paramount Global—the huge media conglomerate that owns CBS, MTV, and one of Hollywood’s most historic movie studios—has decided to merge with technology scion David Ellison’s Skydance Media, ending years of worry over the company’s future.

The agreement, revealed late Sunday, comes only weeks after Ellison’s previous offer to acquire Paramount crumbled at the last minute, surprising industry insiders and raising concerns about the struggling media company’s future.

Paramount, The Media Empire Behind CBS And ‘Top Gun,’ Agrees To Merge With Skydance

The transaction solidifies Ellison’s status as a media mogul, eliminating Shari Redstone’s control of Paramount through her family’s National Amusements holding company after her father, the late Sumner Redstone, won a fierce bidding war to put together the media empire in the 1980s.

Skydance will first acquire National Amusements before merging with Paramount, valuing the company at $4.75 billion.

The production firm founded by Ellison will “invest $2.4 billion to acquire National Amusements for cash and $4.5 billion for the stock/cash merger consideration to be paid for publicly traded Class A shares and Class B shares, as well as $1.5 billion of primary capital to be added to Paramount’s balance sheet,” according to the statement.

Ellison will lead the combined firm as CEO, and Jeff Shell, former CEO of NBCUniversal, will serve as president.

In a call with investors Monday morning, Ellison and Shell set out Paramount’s strategy, seeking to become a “technological leader” in the streaming industry and unveiling cost-cutting efforts worth $2 billion.

“We love the creative engine of this company, but obviously a big chunk of the company is in the linear world — and we know that linear is challenged and declining,” Shell said to the media. “I think a lot of us in the business know we’ve got to run these businesses in a different way as they decline.”

The agreement ends a dramatic and protracted saga that began in December. The two firms entered exclusive talks in April, leading to the departure of longtime Paramount CEO Bob Bakish. Meanwhile, the firm has been led by a trio of executives: Brian Robbins, CEO of Paramount Pictures; Chris McCarthy, CEO of Showtime and MTV Entertainment Studios; and George Cheeks, CEO of CBS.

While legacy media firms have struggled in recent years, Paramount, with its wide portfolio of cable networks like MTV and Comedy Central, has been significantly exposed to the seismic consumer shift away from the old television model and toward streaming services. As services like Netflix grew popular, millions of individuals ditched cable packages to favor cheaper on-demand streaming TV and movies. Paramount, which relied heavily on the television industry, was caught off guard.

To offset dwindling cable income, Paramount invested billions of dollars developing its streaming service, Paramount+. However, it was late to the game, and like the competitor streaming platforms established by other legacy media corporations, the service has struggled to achieve enough customer momentum to offset its losses in the linear television industry.

The legendary company’s valuation has also plummeted due to the turmoil, with Paramount shares down more than 75% in the previous five years. At a company town hall last month, Robbins acknowledged that the conglomerate’s future had been a concern.

“We’d want to take a moment to acknowledge the problems posed by all of the M&A rumors surrounding our company. “We understand how difficult and disruptive this period has been,” Robbins added. “And while we cannot say that the noise will disappear, we are here today to lay out a go-forward plan that can set us up for success no matter what path the company chooses.”

While Redstone has been contacted recently about selling off sections of Paramount’s enormous media portfolio, including Showtime and the cable network BET, multiple high-priced bids to split the business were ultimately rejected.

Paramount, The Media Empire Behind CBS And ‘Top Gun,’ Agrees To Merge With Skydance

In recent months, as takeover bids for Paramount resumed, Sony Pictures and private equity company Apollo Global Management proposed a $26 billion deal that would have made Sony the majority shareholder and Apollo a minority shareholder. However, the deal would have resulted in the dissolution of Paramount, a possibility that Redstone opposed due to her affinity to the company her father had spent decades developing.

The sale to Skydance Media, launched in 2010 by David Ellison, son of Oracle cofounder Larry Ellison, provided Redstone with an offer she could not refuse: billions of dollars in cash and the security of selling the family business to the heir of another titan who has vowed to invest in Paramount’s future. Skydance and Paramount also have a long history, collaborating in recent years to produce some of the box office’s biggest blockbusters, including “Top Gun: Maverick” and “Mission: Impossible” films.

“Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king,” Redstone said in an interview. “Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment.”

SOURCE | CNN

Boeing will plead guilty to a criminal fraud charge resulting from two 737 Max plane disasters that killed 346 people, the Justice Department announced late Sunday, after the government found the firm broke an agreement that had shielded it from prosecution for more than three years.

Last week, federal prosecutors gave Boeing the option of pleading guilty and paying a fine as part of its penalty or going to trial on the felony criminal allegation of conspiracy to defraud the United States.

Prosecutors accused the American aerospace firm of misleading regulators who authorized the jet and its pilot training standards.

Boeing Accepts A Plea Deal To Avoid A Criminal Trial Over 737 Max Crashes, Justice Department Says

The plea agreement, which must still be approved by a federal judge before it takes effect, requires Boeing to pay an additional $243.6 million punishment. That was the same amount it paid under the 2021 settlement, which the Justice Department claimed the business violated. An impartial monitor would be appointed to oversee Boeing’s safety and quality practices for three years. The agreement also compels Boeing to invest at least $455 million in its compliance and safety initiatives.

The plea deal mainly addresses Boeing’s violation prior to the crashes in Indonesia and Ethiopia, which killed all 346 passengers and crew members onboard two new Max jets. A Justice Department official stated that it does not provide Boeing with immunity for prior events, such as a panel that flew off a Max aircraft during an Alaska Airlines flight over Oregon in January.

The agreement also does not cover any current or past Boeing executives, only the company. Boeing stated in a statement that it had struck an agreement with the Justice Department but declined to disclose further.

According to a filing made Sunday night, the Justice Department expects to present the written plea deal to a U.S. District Court in Texas by July 19. Lawyers for some of the relatives of those killed in the two crashes have stated that they will seek the judge to reject the arrangement.

“This sweetheart deal ignores the fact that 346 people died as a result of Boeing’s conspiracy.” “The deadly consequences of Boeing’s crime are being hidden through crafty lawyering between Boeing and the DOJ,” said Paul Cassell, a lawyer for some of the families.

Federal prosecutors accused Boeing of conspiring to deceive the government by deceiving authorities about a flight-control system involved in the crashes, which occurred less than five months apart.

As part of the January 2021 deal, the Justice Department agreed not to prosecute Boeing for the charge if the firm met specific conditions for three years. Last month, prosecutors accused Boeing of violating the conditions of that deal.

U.S. District Judge Reed O’Connor, who has handled the case since its inception, has denounced what he calls “Boeing’s egregious criminal conduct.” O’Connor could accept the plea and the punishment provided by prosecutors, or he could reject the accord, which would likely result in additional negotiations between the Justice Department and Boeing.

The case dates back to the crashes in Indonesia and Ethiopia. The Lion Air pilots in the first crash were unaware of flight-control software that might automatically lower the plane’s nose. Ethiopian Airlines pilots were aware of the situation, but were unable to manage the plane when the software activated due to information from a defective sensor.

In 2021, the Justice Department sued Boeing with tricking FAA regulators about the software, which did not present on older 737s, and how much training pilots would require to fly the plane safely. The department agreed not to prosecute Boeing at the time in exchange for the corporation paying a $2.5 billion settlement, including the $243.6 million fine, and taking three years to comply with anti-fraud regulations.

Boeing, which accused two low-level employees for misleading authorities, attempted to put the crashes behind it. when grounding Max aircraft for 20 months, regulators allowed them to fly again when the manufacturer decreased the strength of their flying software. Max jets completed thousands of safe flights, and airline orders increased, reaching approximately 750 in 2021, 700 more in 2022, and over 1,000 in 2023.

This changed in January, when an unused emergency escape panel burst off an Alaska Airlines Max during a flight over Oregon.

Pilots safely landed the 737 Max, and no one was seriously wounded, but the incident prompted more scrutiny of the corporation. The Justice Department launched a fresh investigation, the FBI informed passengers on the Alaska flight that they could be victims of a crime, and the FAA said that it was increasing oversight of Boeing.

According to some legal experts, a criminal conviction might undermine Boeing’s eligibility for federal contracts. The plea announced on Sunday does not address that issue, leaving it up to each federal agency to decide whether to exclude Boeing.

The Air Force claimed a “compelling national interest” in allowing Boeing to compete for contracts after the corporation paid a $615 million fine in 2006 to settle criminal and civil allegations, including using stolen information from a competitor to win a space-launch contract.

The corporation, headquartered in Arlington, Virginia, has 170,000 workers and dozens of airline customers throughout the world. Southwest, United, American, Alaska, Ryanair, and flydubai are among the most loyal 737 Max customers.

However, 37% of its revenue last year came from US federal contracts. The majority of it was defense work, including military sales that Washington organized for other countries.

Boeing also manufactures a capsule for NASA. Two astronauts will stay aboard the International Space Station for longer than expected while Boeing and NASA engineers work to resolve issues with the capsule’s propulsion system.

Even some Boeing detractors are concerned about harming a critical defense contractor.

“We want Boeing to succeed,” said Richard Blumenthal, a Connecticut Democrat, at a Senate hearing last month on the company’s allegedly dysfunctional safety culture. “Boeing needs to succeed for the sake of the jobs it provides, for the sake of local economies it supports, for the sake of the American traveling public, for the sake of our military.”

Boeing Accepts A Plea Deal To Avoid A Criminal Trial Over 737 Max Crashes, Justice Department Says

Relatives of the Max crash victims have called for a criminal prosecution to uncover what Boeing employees knew about tricking the FAA. They also want the Justice Department to prosecute key Boeing personnel, rather than merely the business.

“Boeing has paid fines numerous times, and it doesn’t appear to make any difference,” said Ike Riffel of Redding, California, whose sons Melvin and Bennett died in the Ethiopian Airlines tragedy. “When people start going to prison, that’s when you are going to see a change.”

At a recent Senate session, Boeing CEO David Calhoun defended the company’s safety record before turning and apologizing to relatives of Max accident victims seated in the rows behind him “for the grief that we have caused.”

Hours before the hearing, the Senate investigations subcommittee issued a 204-page report containing new charges from a whistleblower who expressed concern that defective parts could be used in 737s. The whistleblower is the latest in a long line of current and former Boeing employees who have voiced safety concerns about the firm and claimed retaliation as a result.

SOURCE – AP

Reid Hoffman, co-founder of LinkedIn, offers major financial support to Smartmatic as the voting technology business fights Fox News and Newsmax over the right-wing networks’ repeated airing of 2020 election hoaxes.

Hoffman, a wealthy venture capitalist and major Democratic fundraiser, described his multimillion-dollar investment in Smartmatic as a method to boost the company’s global operations as it pursues costly defamation litigation.

LinkedIn Billionaire Bankrolls Voting Firm Smartmatic As It Fights Fox News In 2020 Election Defamation Case

“Smartmatic built a global business by using technology to better engage citizens, regardless of party or ideology, by making voting simple and trustworthy,” Hoffman said to reporters in a statement. “After Donald Trump lost in 2020, however, Smartmatic became a target of the defamatory campaign to overturn his defeat.”

Hoffman, who has known Smartmatic CEO Antonio Mugica for years, said he is “thrilled” to support the company and assist Mugica in recovering “what he is owed.”

The terms of the investment, as first reported by The Washington Post, were not disclosed.

A person who knew the case declined to reveal how much money Hoffman invested in Smartmatic but told CNN that the eight-figure investment exceeded $10 million.

“This isn’t litigation financing,” the individual said, adding that Hoffman “thinks the company is massively undervalued” and will profit from his investment if Smartmatic succeeds. Furthermore, despite Hoffman’s considerable investment, he “doesn’t have the power” to instruct Smartmatic’s lawyers to settle the litigation, according to the person.

“Fox’s strategy was to spend us into the ground,” the insider explained. “This is the response.”

The investment comes as Hoffman increases his criticism of Trump. The LinkedIn co-founder told CNN earlier this month that corporate leaders are afraid to come out against Trump because they fear that the presumptive Republican nominee may retaliate. Hoffman stated that President Joe Biden is the more “pro-business” candidate because he upholds the rule of law, whereas Trump does not.

Mugica, CEO of Smartmatic, praised Hoffman’s support.

“The lies told by Fox News and Newsmax have not only defamed and damaged our business, they have also directly attacked the integrity of the nonpartisan civic work we have supported over more than two decades,” Mugica told reporters.

Smartmatic is demanding billions of dollars in damages from Fox News, Newsmax, and other right-wing individuals who wrongly accused it of rigging the 2020 election. Top Donald Trump allies regularly alleged on social media and in TV interviews that Smartmatic software unlawfully changed millions of votes from Trump to Biden, despite the lack of evidence.

The voting technology company’s defamation case against Fox News is still in the fact-finding “discovery” stage and is not scheduled for trial until 2025. Earlier this year, the New York judge presiding over the case allowed Smartmatic to expand its complaint to include Fox Corporation, the cable news behemoth’s parent firm.

The Smartmatic-Newsmax action will go to trial in Delaware Superior Court in September unless a last-minute deal is reached. One America News, a small pro-Trump propaganda network, recently settled a lawsuit filed by Smartmatic over similar charges.

All of these media outlets and Trump friends have denied any misconduct.

A Fox News Media spokeswoman claimed Smartmatic is attempting to “chill First Amendment freedoms” and criticized its “alliance with a high-profile Democratic donor and longtime supporter of President Biden to fund their lawsuit is entirely predictable.”

LinkedIn Billionaire Bankrolls Voting Firm Smartmatic As It Fights Fox News In 2020 Election Defamation Case

In response to Hoffman’s investment, a Newsmax lawyer informed CNN that the organization “reported fairly on both sides of the 2020 election.” The lawyer further stated that the Justice Department recently charged Smartmatic officials in a bribery plot involving a prominent Philippine election official. Smartmatic disputes the charges.

Smartmatic is also suing Sidney Powell, Trump’s 2020 campaign counsel, and Mike Lindell, CEO of MyPillow, two of the most egregious election disinformation propagators. A Powell spokesperson did not immediately reply to calls for comment.

“It appears that Mr. Hoffman is trying to take a page out of the Fox settlement and copy Staple Street’s investment in Dominion to get a quick return,” Lindell attorney Christopher Kachouroff said, referring to the private equity firm that owns a majority stake in Dominion and benefited from its $787 million settlement with Fox News.

SOURCE – CNN