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Dawn Ostroff and Nicole Seligman were on the independent special committee tasked with finding the best deal for all shareholders

Three Paramount Global PARA -6.87%decrease; red down pointing triangle directors are expected to leave the board soon, as the Shari Redstone-controlled entertainment company discusses a merger with Skydance Media.

Dawn Ostroff, a former Spotify executive, Nicole Seligman, an attorney and former president of Sony Entertainment, and Rob Klieger, Redstone’s longtime attorney, are expected to step down from the board in coming weeks, according to people familiar with the situation.

The directors’ expected departures come at a sensitive time for Paramount Global, as the company is in exclusive talks to merge with Skydance. Seligman and Ostroff are on a special committee of independent board directors that is tasked with pursuing the best possible deal for the company, whether that is with Skydance or another suitor.

The planned departures could be disclosed in a Paramount securities filing as soon as this week.

Skydance Media, the production company that has partnered with Paramount on such movies as Tom Cruise’s “Top Gun: Maverick” and “Mission: Impossible—Dead Reckoning Part One,” has agreed in principle to acquire Redstone’s National Amusements, the privately held company that owns almost 80% of the voting shares of Paramount Global, for around $2 billion in cash, The Wall Street Journal reported last week.

In a second step of that proposed deal, Paramount Global—owner of broadcaster CBS, cable brands like Nickelodeon and MTV, and the Paramount film studio—would acquire Skydance in an all-stock deal valued at around $5 billion.

The structure of that proposed deal has faced criticism from some investors, who have voiced concerns in letters to the board that the deal would be good for Redstone but would dilute Paramount’s nonvoting shareholders, people familiar with the situation said.

Skydance Media is a production company run by David Ellison and backed by his father, Oracle co-founder Larry Ellison, as well as investors such as Red Bird Capital Partners, KKR and Chinese tech-investment giant Tencent.

Private-equity firm Apollo Global Management submitted a competing offer to buy Paramount for $26 billion just before the company’s exclusive talks with Skydance began. Paramount directors decided not to engage with the offer because it wasn’t clear that Apollo had financing lined up and the company had not yet done due diligence, the people said.

Any deal is subject to approval by the independent committee of directors at Paramount.

Ostroff, who most recently ran content and advertising at Spotify, is leaving Paramount’s board after a year.

Seligman, who last month joined the board of artificial-intelligence company OpenAI, is departing the board after eight years. She joined the board of Viacom in 2016 before it was merged with CBS, the other wing of the Redstone empire, to form what is now Paramount Global.

Klieger joined the CBS board in 2017 and stayed on following the merger with Viacom.

Rating agency voices concern as Beijing transitions from property-led growth model

Fitch Ratings cut its outlook on China’s long-term credit rating to negative on Wednesday, citing uncertain prospects for the economy as the country transitions from its property-led growth model.

The move by the rating agency, which maintained the country’s A plus credit rating, follows a similar outlook downgrade from rival Moody’s Ratings in December.

“The outlook revision reflects increasing risks to China’s public finance outlook as the country contends with more uncertain economic prospects amid a transition away from property-reliant growth to what the government views as a more sustainable growth model,” the agency said.

“Wide fiscal deficits and rising government debt in recent years have eroded fiscal buffers from a ratings perspective,” it added.

China’s finance ministry hit back at the downgrade. Fitch’s rating system “failed to effectively anticipate the positive role of fiscal policies in promoting economic growth”, the ministry said.

Beijing has been struggling to boost growth in the post-pandemic era. It is still dealing with multiple economic challenges such as a prolonged property crisis, high local government debt and falling direct foreign investment.

In recent months, Beijing has redirected resources to the manufacturing and high-tech sectors. It has also sought to curb the spending of indebted local governments traditionally reliant on land sales for revenues.

China has set an economic growth target of 5 per cent, the same as last year’s figure and the lowest in decades, but analysts believe it will be difficult to achieve without an increase in domestic consumption and revival of confidence.

Fitch forecast that China’s gross domestic product growth would slow to 4.5 per cent in 2024, citing persistent property sector weakness and subdued household consumption.

A growth target of 5 per cent is “in line with expectations, reality and the need for developments”, the ministry said. The economy’s “long-term positive fundamentals have not changed, and China’s ability and determination to maintain good sovereign credit have also not changed”.

Fitch also forecast that general government debt — which covers local and central government borrowing — would rise to 61.3 per cent of GDP in 2024, up from 56.1 per cent in 2023, primarily due to fiscal support to counter economic pressures.

The finance ministry said China’s debt was under control, while hidden debt — local government’s off-balance sheet liabilities — was also declining.

President Xi Jinping has launched a charm offensive to revive investor confidence in China, engaging in high-level meetings with foreign executives.

The outlook downgrade follows a week-long trip to China by US Treasury secretary Janet Yellen, who voiced concern about the potential impact of excess Chinese capacity on global trade.