CBS discusses settling $US10bn Trump suit as it eyes hurdles to winning Skydance merger approval
Moves by Paramount, owner of CBS, signal efforts to dial down tensions with the incoming president who alleges the network edited an interview with Vice President Kamala Harris, favouring her campaign for president.
Paramount Global executives have held internal discussions about settling a lawsuit filed by Donald Trump over a CBS News interview with Vice President Kamala Harris, according to people familiar with the situation, a sign of larger efforts to dial down tensions with the incoming president.
Paramount, owner of CBS, its namesake studio and several cable channels, has a major piece of business in front of the new administration: its planned merger with Skydance Media. It’s become clear to executives at both companies that Trump’s dissatisfaction with CBS News will make the review tougher than they anticipated, and that they’ll likely need to offer concessions to win approval, people familiar with the situation said.
Incoming Federal Communications Commission chairman Brendan Carr gave Paramount executives a warning to that effect at a reception late last year following the taping of the Kennedy Center honours in Washington, according to people familiar with the exchange, and he has echoed the message in public remarks.
The FCC has the authority over the transaction because it would involve the transfer of broadcast-TV licences held by local CBS-owned stations.
Trump’s lawsuit against CBS, which seeks $US10 billion ($16bn) in damages, alleges that the network committed election interference by editing portions of an interview with Harris, favouring her campaign for president. Trump claimed CBS aired one version of the interview on 60 Minutes and another version on its show Face the Nation, each containing different answers about Israel.
CBS has said it aired a more succinct version of Harris’s interview on 60 Minutes. There was no indication that Paramount had approached Trump’s team about a settlement, but executives at the company were gaming out options to reduce friction with the incoming administration.
“What’s going on here is a lot of bluster to discipline the future operations of CBS,” said Andrew Jay Schwartzman, a longtime public-interest attorney and senior counsellor at the Benton Institute for Broadband & Society.
“My guess is that this is just to kind of soften them up and a warning to others.”
CBS News is not alone in drawing Trump’s ire. Last year, he filed a defamation lawsuit against Disney’s ABC News and star anchor George Stephanopoulos over comments he made on air stating that Trump had been found civilly liable for raping writer E. Jean Carroll. A federal jury determined Trump was liable for sexual abuse.
Last month, Disney settled the suit, agreeing to contribute $US15 million to Trump’s presidential foundation or museum and to pay $US1 million in legal fees to Trump’s lawyer.
Paramount and Skydance executives have considered a number of possible changes the company could make to shore up CBS News editorial operations while reassuring Trump’s camp, including adding new processes around programming and possibly releasing the transcript of its 60 Minutes interview with Harris, according to the people familiar with the situation.
Skydance is run by David Ellison, the son of billionaire Oracle co-founder Larry Ellison, who has a good relationship with Trump. Under the terms of the deal, Skydance and its investors agreed to spend more than $8 billion to acquire control of Paramount from media heiress Shari Redstone and merge it with Skydance. A person close to Skydance said David Ellison would support measures to promote unbiased journalism.
Paramount finds itself in a similar predicament to the one CNN owner Time Warner faced in 2016 when it proposed merging with telecom giant AT&T. Trump regularly took aim at CNN for alleged bias, and his Justice Department sued to block the deal on antitrust grounds.
Then, however, CNN’s editorial practices weren’t officially part of the government review, which on its face was about whether a unit that included CNN should be sold off as a condition of the deal. AT&T and Time Warner resisted and prevailed, closing their deal.
This time around, an FCC leader is making a news organisation’s fairness an explicit issue. For Paramount, as with Time Warner, any concessions to Trump come with the risk of upsetting Hollywood talent.
“Paramount has the same problem, which is if you bend the knee on the editorial side, there’s a talent problem on the streaming side,” said Blair Levin, a former FCC official and analyst at New Street Research.
The Paramount-Skydance deal could face other serious challenges. John Moolenaar, the Republican chairman of the House select committee on China, said Wednesday that the merger warranted review by the Committee on Foreign Investment in the US China’s Tencent Holdings, which was recently added to a US blacklist of Chinese military-linked companies, is an investor in Skydance. A Skydance spokeswoman said the Tencent investment in the new Paramount would be less than 5 per cent.
CBS’s news operations have had a season of turbulence, with certain programming drawing criticism from inside and outside the company. Most recently, the Jan. 12 episode of 60 Minutes on the Biden administration’s handling of the war in Gaza triggered concerns over bias at the news division.
Jewish organisations and the Anti-Defamation League blasted the episode for being slanted against Israel. Internally, executives raised questions about why more context wasn’t added to the piece to make it more balanced, said people familiar with the situation.
Within hours of the episode airing, Paramount had reached out to Susan Zirinsky, its former president, to oversee standards and help vet stories on an interim basis, according to people familiar with the situation. In recent days, CBS News has reached out to several senior cable news executives to replace Zirinsky on a permanent basis, according to other people familiar with the discussions.
Last fall, CBS News anchor Tony Dokoupil opened an interview about Israel with author Ta-Nehisi Coates by stating that the content in Coates’s new book The Message, which is critical of Israel, “would not be out of place in the backpack of an extremist.” Dokoupil’s interview caused CBS’ race and culture unit to express concern that his tone and phrasing gave a perception that he was biased.
The incident set off a backlash at the company. Some employees said Dokoupil went too far, while others felt the news division came down too hard on him. Redstone, the controlling shareholder of Paramount, even gave a public statement in support of Dokoupil.
Since then Redstone and David Ellison have spoken about the need for changes at CBS News to make sure it is objective, according to people familiar with the situation.
Carr has said that bias accusations are fair game for the media regulator. In a November Fox News interview, he cited a news-distortion complaint from the Center for American Rights as an element he would consider during the merger review.
Outgoing FCC Chairwoman Jessica Rosenworcel, a Democrat, dismissed the complaint on Thursday, saying in a statement that “the FCC should not be the President’s speech police” or “journalism’s censor-in-chief”.
– Isabella Simonetti contributed to this article.
Dow Jones Newswires
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