Welcome back to What I’m Hearing, a little earlier tonight because I’m retraumatizing myself with childhood flying cow memories at the Twisters L.A. premiere.

My media-savvy colleague Dylan Byers is in Idaho chronicling the Sun Valley buzz (and David Zaslav’s ridiculous bandana cravat), so sign up for his In the Room private email here. Meanwhile, I asked him for a little update, and he emailed:

• “Zaslav made waves here yesterday when he told reporters he was less interested in the winner of the presidential election than whether they were friendly to business interests: ‘We just need an opportunity for deregulation, so companies can consolidate and do what we need to to be even better.’ I’ve since learned that the remark is actually part of a broader Zaz campaign to clear the way for greater consolidation in Hollywood. He’s made several trips to Washington in recent months to meet with Commerce Secretary Gina Raimondo and other members of the Biden administration, as well as senior Republicans, arguing that M&A is essential to compete with Amazon, Google, and Netflix. He’s also been discussing the issue here with Raimondo—a regular Allen & Co. attendee—and his fellow entertainment executives. Zaz has his own dealmaking motivations, of course, but his official pitch is a patriotic appeal to the heart: Without a green light for consolidation, U.S. media companies will fail to keep pace with global tech giants, depriving Americans of local programming and the world of its greatest export: storytelling.”

Let’s begin…

• Jeffrey and the Clooney bomb: Everyone in town seems to want to blame Jeffrey Katzenberg for Joe Biden. I get it—Katzenberg, a campaign fundraising chair, spun the president’s condition to so many of us that when we saw Biden up close at the L.A. fundraiser or the debate, we felt not just alarmed but betrayed—and some, like George Clooney, felt New York Times op-ed betrayed. But man, people are all but questioning whether Jeffrey will lose his table at the Polo Lounge. The pitchforks are a bit much. I doubt we’ll see Jeffrey as the string-puller of future L.A. megafundraisers. But if Biden recovers or is replaced by Kamala or someone else, will donors simply ignore Jeffrey’s calls in the future? Maybe. Given the stakes of this election and others, I think eventually no.
• The Amal angle: Little discussed in this mess is that Clooney, despite co-hosting the L.A. fundraiser, had been furious with Biden for denouncing the International Criminal Court’s effort to issue arrest warrants against Israel’s Benjamin Netanyahu. Amal Clooney, a human rights lawyer, had worked with the I.C.C. to review evidence in the matter and issued a report agreeing that warrants were reasonable. George wasn’t just annoyed, here. According to The Washington Post, he called up a Biden aide to complain about the comment and the possibility of the administration sanctioning the I.C.C.—which, of course, could include Amal.
• Horizon could’ve gone to Amazon: Anyone want to bet on whether Horizon: An American Saga: Chapter 2 will ever see theaters? How about Horizon 3, which began shooting earlier this summer despite Kevin Costner having so far failed to raise the money to finish it? Anyway, before Warner Bros. and Costner decided this week to scrap Chapter 2’s Aug. 16 release—sorry, indefinitely postpone it—Amazon MGM Studios inquired about taking the film off Warners’ plate. (Remember, Costner and his mysterious backers paid for the movie and its release, but Warners’ efforts likely wouldn’t be justified given that the $110 million first film in the saga has grossed only $23 million domestic.) Talks were had, but the Amazon offer was just too low to seriously consider, and Costner/WB instead pulled the plug on theaters. (Amazon declined comment.)
• Just kill the ESPYs now: Prince Harry received the Pat Tillman Award for Service tonight at the ESPYs. Yes, the ESPYs, the awards show that honors people who already won or lost their respective games, is still a thing. But please let this Harry decision be the reason it’s finally euthanized by Disney.
• Seacrest out on Sajak’s un-retirement?: You know when you say your goodbyes at a party but forget your jacket so you have to go back and awkwardly see everyone again? That’s Pat Sajak later this summer when he reappears on the Sony lot to tape Celebrity Wheel of Fortune after publicly retiring in June. How did this happen? Per multiple sources, Sajak’s deal for primetime Wheel included episodes that weren’t able to shoot before August. So Pat knew during his tearful goodbyes that he was coming back—which had to annoy Ryan Seacrest, Sajak’s replacement, who is already taping new episodes of the syndicated Wheel. Seacrest likely preferred a smooth handoff, not the impression that he’s the B-show host while only Pat is worthy of primetime—though Seacrest will get that perch (and paycheck) once Sajak’s deal is up.
• Free idea: Why no Wheel of Fortune blooper specials? Clips go viral online every time a contestant guesses something dumb or perverted. Just turn the best of the show’s nearly 50 years into an hour for ABC every season.
• Return of the thirstiest producer: Shane Salerno—the writer, producer, serial fabulist, and, generally speaking, bad guy—is at it again. After I noted his bizarre year of relentlessly planting dubious trade stories about how his volcano movie, Eruption, was tearing up the town, the project finally landed a small development deal this week at Sony. Salerno—sorry, Deadline—then touted that as a “seven-figure deal after several circled.” But per two sources, the option is nowhere near seven figures. It’s actually a $150,000 book deal, which isn’t nothing, but for a bestseller authored by both Michael Crichton and James Patterson, it’s pretty modest. The movie would have to actually get made to turn this into a seven-figure deal, though you’d never know that from the Salerno spin. This was hardly a frenzied auction situation, and “conversations with Keanu Reeves to star” is pure puffery, per a source close to Reeves. I know, nobody believes these breathless articles, but in the annals of Hollywood bullshit artists, Salerno’s an elite performer and deserves special recognition. (He and Sony both declined to comment.)
• Box office over/under: Fly Me to the Moon, Greg Berlanti’s $100 million (!!) period rom-com starring Scarlett Johansson and Channing Tatum, is tracking for a Horizon-esque $13 million to $15 million opening for Apple and Sony. Let’s say $14 million, and I’ll take the under. Another Apple patron project… but at least it’s not Argylle.

But… they know they need to move fast, much more quickly than if they waited around for the government to bless their $8 billion takeover of National Amusements and the controlling stake in Paramount Global. Since Shari’s chosen “office of the C.E.O.” awkwardly articulated a turnaround plan about a week before Skydance bigfooted them, I asked Ellison whether that strategy would stop during the regulatory review, which could take a year or so given the F.C.C. broadcast license changing hands. “That will not stop—and, candidly, cannot stop, given the rapidly changing environment,” he said.

Okay, but obviously George Cheeks, Chris McCarthy, and Brian Robbins—the three C.E.O.s we aren’t calling the Pep Boys—can’t just do whatever they want with Paramount. And on the other side, Skydance now must act like an engaged Mormon, keeping an arm’s length between its merger partner until they’re officially consummated. Ellison told me he’ll be involved in the decisions “within all the regulatory bounds we have,” and that he’ll maintain “the appropriate seat at the tables.” But what does that actually mean in practice? This matters to lots of people at Paramount who want to know who’s actually calling which shots, and how much leeway the conquerors must give their new subjects (and vice versa). I wasn’t sure on the exact rules, so I called up some law professors for some quick answers.

Generally, Skydance “can wield some control with Paramount,” noted Michael Chasalow—a clinical professor who teaches the Business Organizations course at USC Law School, my alma mater—in our chat today. “What they can’t do is to deploy Skydance assets to integrate them or act like they are part of one company when they are not.” Their control can be over “a relatively broad category of things,” Chasalow added, and as contingencies are satisfied and it becomes more likely that the deal will close, Skydance can exercise more control. But “you won’t see any integration until the deal is done. It’s not prudent, and it might upset regulators.”

“Typically, they’ll get veto powers,” added Adam Badawi, a law professor at UC Berkeley who writes about corporate governance and shareholder litigation. We’ve seen these concerns in the recent Disney/Fox and Warner/Discovery transactions, but it’s a little more complicated here because there are two transactions pending—the purchase of National Amusements, followed by the planned merger of Paramount and Skydance. But the principles are largely the same. “If you want to engage in a transaction over x amount, you've got to get the permission of the buyer in order to do that,” Badawi said.

We got further clarity today in Paramount’s 8K filing, which includes specific covenants regarding how the company should be operated as the deal progresses. “It’s pretty standard,” Badawi told me, but there are a couple points worth noting. For instance, there’s a section listing a bunch of things Paramount can’t do without Skydance’s permission—stuff like paying dividends of more than five cents a share, incurring debt, or settling large litigation. Crucially, Paramount is restricted from entering into any “meaningful” deals without Skydance’s green light.

What’s meaningful? It doesn’t specify, but I’m betting it’s more significant than greenlighting A Quiet Place 4 or whatever Taylor Sheridan scribbled on his Texas-shaped notepad between horseback rides this weekend. Like, say, the sale of BET, which the C.E.O.s have already contemplated, or any other channel or studio assets. The document specifically mentions any deals pertaining to Paramount+—say, a joint venture with Amazon or Warner Bros. Discovery, as rumored. “The parties have also buried some stuff in the disclosure letter, which is not public,” Badawi noted. “My guess is that it is some specific deal that the parties want to keep confidential,” he surmised.

Practically speaking, could Ellison or Cardinale or their incoming president, Jeff Shell, just call up one of the C.E.O.s and suggest a deal? “I don’t think there's anything that would say you’re not allowed to do that,” Badawi told me “It might be discoverable if the regulatory stuff ends up getting complicated. But it certainly would be fine for them to provide their input. And, of course, if this person’s going to be your boss when the deal closes, that’s got some pretty significant weight.”

It sounds like a bit of a puppeteer situation, especially since Ellison has worked with Paramount for over a decade and knows a lot of the top people. But it’s kinda one step removed from that. “I would think Ellison could pick up the phone and say, ‘Hey, have you thought about divesting this?’ And they might go ahead and do it or not,” Badawi told me. “And then, if the terms are not acceptable, then they would have a veto right.”

Ellison and the Skydance crew are being super cautious about this stuff, specifically instructing employees and deal folks on who not to meet with. So like with all the choreographed meetings as Disney/Fox and the various Warner deals progressed, we’re probably about to see a full year of high-level M&A kabuki theater.

Correction: Hello Sunshine’s valuation in the Candle Media acquisition was an even wilder $900 million, not the $800 million I noted on Monday. Apologies!

Got a question, comment, complaint, or other awards to give Prince Harry? Email me at Matt@puck.news or call/text me at 310-804-3198.