The FTC still needs to approve the Paramount-Skydance merger.

• Paramount has agreed to merge with Skydance Media after tumultuous acquisition negotiations.
• However, Hollywood’s mega-merger could face FTC scrutiny.
• Under Lina Khan, the FTC has brought antitrust lawsuits against companies across a wide range of industries.

Paramount, the media giant that owns Nickelodeon and MTV, has finally reached an agreement with Skydance Media, the companies announced late Sunday night.

The deal includes the acquisition of National Amusements, which owns a controlling stake in Paramount, and the merger of Skydance and Paramount Global.

The announcement brings to an end a long and convoluted major Hollywood merger in which two personalities play central roles: Shari Redstone, who owns a controlling stake in Paramount through National Amusements, and David Ellison, CEO of Skydance.

But the drama isn’t over yet, as the Federal Trade Commission could step in with antitrust concerns. Companies must review large mergers with the FTC before the deals can be finalized.

Keeping an agency happy can be challenging.

The FTC and its chairwoman, Lina Khan, are scrutinizing deals more closely and pushing for more aggressive competition policies in the Biden administration. Khan also already has Hollywood on her radar.

Speaking in August podcast of digital media company The Ankler, Khan said Hollywood is already suffering from unfair market conditions caused by consolidation. She also suggested that her agency would not take kindly to further concentration of power in the sector.

Khan blamed consolidation and vertical integration for creating “a market structure where we hear about how scriptwriters, producers and creators of TV programs earn less“even if companies charge customers higher fees.”

National Amusements hired antitrust lawyers from the law firm Ropes & Gray in the lead-up to the deal, the firm said Sunday. One of the partners involved, Michael McFalls, served as legal counsel to the FTC chairman from 1998 to 2000, according to Ropes & Gray’s website.

Skydance, Paramount and Ropes and Gray did not immediately respond to Business Insider’s request for comment, sent outside standard business hours.

Technology and consumer companies targeted by FTC

Khan’s FTC is targeting industries beyond Hollywood. Last month, Khan told a conference that her agency was going after a “mafia boss” by investigating tech companies that were causing the “greatest harm.”

In April, the FTC sued to block the $8.5 billion acquisition of Michael Kors parent Capri Holdings by Tapestry, the owner of Coach and Kate Spade. The FTC said the proposed merger would deprive millions of American consumers who benefit from discounts and innovation sparked by competition.

Under Khan, a critic of big tech companies, the agency has also launched several lawsuits against tech giants.

In 2022, the FTC repeatedly tried to block Microsoft’s acquisition of Activision Blizzard, a leading video game developer. The agency said the $69 billion deal would reduce competition in gaming.

Earlier this year, the FTC sued Apple for anticompetitive conduct and Adobe for violating consumer protection laws.

The U.S. government recently filed similar lawsuits against Amazon, Alphabet (Google’s parent company), and Meta.