Shari Redstone’s ambitious $8 billion plan to merge Paramount Global with Skydance Media has crumbled, largely due to a looming legal threat from influential investor Mario Gabelli. Sources close to the matter revealed that the media heiress was facing the prospect of a $100 million-plus lawsuit from Gabelli, which played a significant role in her decision to abruptly halt the merger just before a crucial vote by a special committee.
Gabelli, an 81-year-old media investment veteran, has a significant stake in Paramount through his 54% ownership of the remaining voting shares, making his influence hard to ignore. While he refrained from discussing specifics in an interview, he hinted at potential legal action. “Like Teddy Roosevelt said, I speak softly and carry a big stick,” Gabelli remarked. “We have established a relationship with an attorney and are looking at all of this under a microscope.”
This is not the first time Gabelli has clashed with Redstone over corporate decisions. Last year, he was part of a shareholder group that secured a $122.5 million settlement concerning the merger of Viacom and CBS, which formed Paramount Global. Gabelli had accused Redstone and a Viacom special committee of breaching their fiduciary duty by approving the deal without shareholder consent.
The proposed merger with Skydance, known for its blockbuster “Mission: Impossible” franchise, faced several hurdles. Skydance’s recent reduction of its offer to National Amusements from over $2 billion to $1.7 billion was a significant sticking point.
An insider noted, “People look at Gabelli as an activist and litigator. Shari and the Paramount special committee know damn well how the vote would have gone if there was an independent vote.”
Redstone, who controls Paramount through her 77% stake in National Amusements, is now exploring other options, including a possible sale of National Amusements..
Despite the upheaval, Gabelli remains optimistic about Paramount’s future, particularly its streaming service, Paramount+. “We’re marathon runners and looking at Paramount from a long-term ownership position,” he said.
