Shari Redstone’s Secret Letter – Puck

While Paramount Global’s stock is up nearly 30 percent over the past month, Shari Redstonethe majority owner of the company, is not only in front two advanced shareholder lawsuits about how it merged CBS and Viacom a few years ago. Last Wednesday, the roughly four dozen lawyers involved agreed on a timetable for the home straight: Subject to the blessing of a Delaware Court of Chancery judge, the whole thing will culminate in a six-day trial for CBS shareholders at the end of June, followed by another six days -Trial for Viacom shareholders in early July. There are NO sign of a peaceful solution.

These suits are remarkable for many reasons. While it used to be very common for shareholders to sue over mergers and acquisitions, this has become a much rarer phenomenon thanks to obscure developments that have made it difficult for class action attorneys to collect attorneys’ fees for this type of litigation. But some keep marching anyway, and those that do are less likely to settle down.

Paramount’s attorneys tried unsuccessfully to have the lawsuits dismissed. Recently, plaintiffs said there was a “mountain of evidence” — you know, like the Paramount mountain — for the ex-CBS CEO Joseph Ianniello was essentially paid millions “to do nothing” as part “of trying to make it appear that CBS executives will remain with the company to manage CBS’ valuable assets post-merger.” Vice Chancellor Sam Glasscock said he would rule after the trial. (Ianniello’s attorney is yet to respond or comment.)

The trials should provide insight into how Redstone planned the merger – the theme James B Stewart And Rachel Abramsis imminent Unscripted: The Epic Battle for a Media Empire and the Legacy of the Redstone Family, coming out next week – and also whether other media giants kicked the hoops of CBS and Viacom back then. However, the exact scope of the disclosures is still disputed. In recent months, the two sides have waged a holy war over evidence, including a mysterious email Redstone sent to her lawyers a few months before the merger was officially announced. This private email (which the company plans to reclaim and is currently sealed) was accidentally copied to the former president of CBS News David Rhodesso the parties have argued detailed about whether the message is privileged. Interestingly, the plaintiffs say that Redstone’s email and SMS practices were “extremely negligent.” Hopefully we’ll find out more soon.

The dual processes could also bring light into the darkness Future of Paramount, which has been the subject of near-permanent deal speculation, including a possible sale of the combined company and/or spin-off from CBS. Last week, CEO of Paramount Bob Bakisch hired two powerful new lobbyists, ostensibly to advise the company on tax issues but also presumably to grease other wheels in Washington. After all, the FCC has just begun its four-yearly review of media ownership rules. On the table is the “Dual Network” regulation, which prohibits a merger between any two of the four major TV stations.

Redstone has repeatedly said she’s not a salesperson, but there’s no doubt she’d appreciate the option. Abolishing the “dual network” rule would eventually open up the possibility of a CBS acquisition by Disney, which owns ABC, or Comcast, which owns NBC, opening up more possibilities than if the company were sold in parts. In view of the shrunken importance of the “Big Four” in the streaming age, a rethinking of the rule is probably overdue anyway. If that restriction is lifted, it’s going to Wall Street.

Source