Paramount Global Stock Trails Peers Amid Ongoing Challenges

Paramount Global (PARA) stock has gained 21.9% over the past year but trails its media and entertainment rivals due to declining revenues, advertising dollars, profitability issues, and operational inefficiencies. The company awaits FCC approval for its $8 billion merger with Skydance and faces a settlement with Donald Trump. Institutional investors own 27.53% of Paramount, with Vanguard owning the largest stake at 9.96%. Analysts have a Hold consensus rating with a price target of $12.09, implying 1.9% downside potential.

Paramount Global (PARA) stock has experienced a notable 21.9% gain over the past year, yet it still lags behind its media and entertainment peers due to declining revenues, advertising dollars, profitability issues, and operational inefficiencies. The company is currently awaiting FCC approval for its $8 billion merger with Skydance, while simultaneously navigating a settlement with Donald Trump. Institutional investors hold 27.53% of Paramount, with Vanguard owning the largest stake at 9.96%. Analysts maintain a Hold consensus rating with a price target of $12.09, indicating a 1.9% downside potential [1].

The potential $35 million settlement of President Trump’s lawsuit against Paramount’s CBS affiliate has been delayed due to the company's management's fear of a potential legal backlash. This hesitation has prompted Trump's legal team to maintain their initial bargaining position, demanding even more money to end the protracted legal dispute [1]. The lawsuit alleges that CBS News’ longtime news program "60 Minutes" doctored an interview with Democratic presidential nominee Kamala Harris ahead of the 2024 presidential election.

The impasse over the lawsuit threatens to throttle a bigger prize — media heiress Shari Redstone’s plan to sell Paramount to independent studio Skydance. A settlement for $35 million would represent a 30% haircut from the original $50 million Trump’s legal advisers had initially sought. However, Paramount's reluctance to pay a significant settlement has hardened the president’s legal team’s position, potentially leading to a prolonged legal battle [1].

The approval of the Paramount-Skydance deal by Trump's regulators at the Federal Communications Commission (FCC) is seen as contingent on the settlement of the case. Trump’s legal representatives and officials deny any relation between the two issues, but Paramount executives are concerned that any large settlement could be construed as a bribe. Redstone, Paramount’s controlling shareholder, stands to net as much as $2 billion from the deal, but without a settlement, there is no windfall for her [1].

President Trump has indicated his support for David Ellison’s pending takeover of Paramount Global, though the ongoing lawsuit remains a top concern. Trump recently attended a UFC event where he was spotted seated near Ellison, who is Skydance’s CEO. Trump stated that he hopes the Paramount deal gets resolved soon, adding that he believes Ellison will do a great job with the company [2].

The FCC has launched an investigation into the alleged biased editing of the Harris interview, casting a cloud over the merger's approval. If the matter doesn't get resolved by October, the deal could be voided under the preliminary agreement reached between Skydance and Paramount. Redstone faces a looming tax bill that could total in the hundreds of millions of dollars, further complicating the situation [1].

The ongoing settlement and regulatory hurdles pose significant risks to Paramount's financial performance and its ability to attract institutional investors. The company's stock price may face further downward pressure if the issues are not resolved promptly. As the situation unfolds, investors will closely monitor the developments to gauge the potential impact on Paramount’s financial health and the broader media landscape.

References:
[1] https://nypost.com/2025/06/19/media/paramount-delays-35m-settlement-with-trump-sources/
[2] https://www.hollywoodreporter.com/business/business-news/trump-supports-david-ellison-paramount-takeover-1236294500/