Paramount and Skydance just agreed to a takeover. But media's messiest deal isn't over yet.

• Paramount agreed to merge with Skydance Media after tumultuous acquisition talks.
• But the Hollywood megamerger may face FTC scrutiny.

Paramount, the media giant that owns Nickelodeon and MTV, has finally agreed to a deal with Skydance Media, the companies said late Sunday.

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

The announcement wraps up the long and confusing Hollywood mega-merger with two personalities at the center: Shari Redstone, who owns the controlling stake in Paramount via National Amusements, and David Ellison, the CEO of Skydance.

But the drama is not over yet, because the Federal Trade Commission could step in with antitrust concerns. Companies have to review large mergers with the FTC before deals can close.

Pleasing the agency might not be easy.

The FTC and its chair, Lina Khan, have been examining deals more closely and pushing for more aggressive competition policies under the Biden administration. Plus, Khan already has Hollywood on her radar.

Speaking on an August podcast from digital media company The Ankler, Khan said that Hollywood was already being hurt by unfair market conditions caused by consolidation. She also suggested that her agency would unfavorably view further concentration of power in the sector.

Khan blamed consolidation and vertical integration for creating a "market structure where we hear about how writers and producers and showrunners are all making less, even as companies are charging customers more."

National Amusements engaged antitrust attorneys at the law firm Ropes & Gray in the lead up to the agreement, the law firm said on Sunday. One of the partners involved, Michael McFalls, worked as attorney-advisor to the FTC's chairman from 1998 to 2000, according to Ropes & Gray's website.

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

Tech and consumer companies in the FTC's crosshairs

Khan's FTC is targeting various industries, not just Hollywood. Last month, Khan said in a conference that her agency was going after the "mob boss," investigating tech companies that create the "biggest harm."

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

Under Big Tech critic Khan, the agency has also brought 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 that the $69 billion deal would suppress competition in gaming.

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

The US government has also filed similar recent lawsuits against Amazon, Google parent Alphabet, and Meta.