Investing.com -- Paramount Global has been considering options to settle a $10 billion lawsuit filed by Donald Trump over a CBS News interview with Vice President Kamala Harris, according a report from the Wall Street Journal, citing to sources familiar with the matter. The lawsuit alleges that CBS News committed election interference by editing portions of the interview, favoring Harris's presidential campaign.
The media conglomerate, which owns CBS, its namesake studio, and several cable channels, is currently planning a merger with Skydance Media. However, Trump's dissatisfaction with CBS News could potentially complicate the review process for the merger, leading the companies to consider offering concessions for approval.
Federal Communications Commission ( FCC (BME:FCC)) Chairman Brendan Carr has reportedly warned Paramount executives about the potential challenges. The FCC has jurisdiction over the merger as it involves the transfer of broadcast-TV licenses held by local CBS-owned stations.
Paramount and Skydance are contemplating changes to CBS News' editorial operations to ease tensions with the incoming administration. These changes could include new programming processes and possibly releasing the transcript of the contentious "60 Minutes" interview with Harris.
Skydance, led by David Ellison, son of Oracle (NYSE:ORCL) co-founder Larry Ellison, is set to acquire control of Paramount in a deal exceeding $8 billion. David Ellison has expressed support for measures promoting unbiased journalism.
The situation mirrors the challenges faced by CNN owner Time Warner when it proposed merging with AT&T (NYSE:T) in 2016, which faced opposition from Trump over alleged bias. The current FCC leader has made the fairness of a news organization an explicit issue in the merger review.
The proposed Paramount-Skydance merger could face additional hurdles. Republican chairman of the House select committee on China, John Moolenaar, stated that the merger should be reviewed by the Committee on Foreign Investment in the U.S due to China's Tencent Holdings (OTC:TCEHY), an investor in Skydance, being added to a U.S. blacklist of Chinese military-linked companies. A Skydance representative confirmed that Tencent's investment in the new Paramount would be less than 5%.
Paramount's CBS News operations have recently faced criticism for certain programming. A January episode of "60 Minutes" on the Biden administration's handling of the war in Gaza drew accusations of bias. In response to these concerns, Paramount has sought to oversee standards and vet stories more rigorously, reaching out to senior cable news executives for potential replacements for its former president, Susan Zirinsky.
Paramount's controlling shareholder, Shari Redstone, and David Ellison have reportedly discussed the need for changes at CBS News to ensure objectivity. FCC Chairman Carr has stated that bias accusations are a valid concern for the media regulator and will be considered during the merger review. Outgoing FCC Chairwoman Jessica Rosenworcel, however, dismissed these concerns, arguing against the FCC acting as a speech police or journalism's censor-in-chief.
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