(newsrealtime) -- Paramount Global's merger with David Ellison's Skydance Media moved one step closer to completion this week after the New York-based media company settled with President Donald Trump's news-bias lawsuit against its CBS News division.
Now, it's up to the Federal Communications Commission and its chairman, Brendan Carr, to either reject Paramount's sale to Skydance or approve it, possibly with conditions.
Trump named Carr to lead the agency in January, elevating an outspoken supporter who has repeatedly fired public broadsides at the press. The FCC chairman said earlier this year that the president has "been right on these media bias issues," and suggested he would look at how CBS handled the interview that prompted Trump's lawsuit in the context of the agency's merger review. Broadcasters benefit from access to public airwaves and therefore must serve the public interest, he said.
Carr also said he would examine the Skydance deal in light of Paramount's efforts to end " invidious forms of discrimination reflected in media companies' DEI policies. Trump has been pushing to eliminate diversity, equity and inclusion policies from the federal government, corporate America and beyond, issuing executive orders banning these practices and asking agency heads to identify targets, including listed companies, to investigate for "illegal DEI" efforts.
Trump accused CBS of selectively editing quotes in a 60 Minutes interview with then Vice President Kamala Harris during the presidential race last fall to make her answers more succinct. To settle the case, Paramount agreed to pay $16 million for his legal expenses and a donation to his future presidential library.
“This has nothing to do with that,” Trump told reporters early Friday morning. The CBS interview “was just totally separate. This was when I was running. This had nothing to do with what was taking place in government.”
If the FCC does impose conditions on the merger, it could take cues from complaints filed by the Center for American Rights, a conservative-leaning nonprofit public interest law firm that has accused US media outlets of bias.
The center has suggested that approval be contingent on concessions, including that Paramount locate broadcast executives and editorial staff in cities other than New York and Los Angeles to better ensure a balance of viewpoints. The group also wants an independent ombudsman to resolve complaints about coverage and for Paramount to commit to an ideologically diverse hiring pipeline by recruiting at schools like Liberty University and Hillsdale College.
The agency is also likely to scrutinize Paramount's board for ideological diversity—whether it has representation from different backgrounds and political persuasions.
Daniel Suhr , president of the Center for American Rights, said he's "especially encouraged about the inclusion of disclosure for interview transcripts," one of the terms of the CBS settlement.
The addition of a news bias monitor that's somehow supervised by the FCC would be unprecedented and would likely violate a provision in the federal Communications Act that bars government censorship, said Harold Feld, senior vice president at the advocacy group Public Knowledge.
“We’ve never seen this before, and it certainly would seem to go against everything that the FCC stands for,” he said.
Although the FCC has not previously imposed conditions exactly like the ombudsman role in past merger reviews, it is not unusual in antitrust cases for monitors to be appointed to ensure compliance with certain conditions, said Andrew Jay Schwartzman, senior counselor at the Benton Institute for Broadband & Society.
Journalists within CBS News are concerned that the merger could compromise their newsroom's independence and integrity, according to current employees. Staffers are worried that if an independent ombudsman were appointed, that person could interfere with news coverage.
Prominent journalists , including former Washington Post executive editor Marty Baron and former CBS News president Andrew Heyward, have criticized the settlement. Former CBS anchor Dan Rather told Variety The deal marked a "sad day for journalism."
CBS News has already come under more scrutiny in recent months. Former CBS News president Susan Zirinsky returned in January to oversee standards at the division, adding a new level of scrutiny . And Paramount Chair Shari Redstone requested to review 60 Minutes segments focused on Trump after the president criticized the show's reporting on him in April.
Paramount has long maintained that the Trump lawsuit was "without merit," citing broad First Amendment protections for the press and the fact that CBS did not report anything factually incorrect.
But the case coincided with the FCC's review of Paramount's $8 billion merger with Skydance and raised issues that have traditionally been popular with Republican critics of the media.
Both Carr and Paramount have stated that the lawsuit and regulatory review are unrelated, but individuals within Paramount have long believed that a settlement was necessary before any ruling on the merger, which was agreed to almost exactly one year ago.
The FCC's media bureau, which reviews such mergers, could approve the Paramount deal with conditions, without elevating it to a public vote by the full commission. Verizon Communications Inc.'s recent acquisition of Frontier Communications was approved at the bureau level after the carrier agreed to curb its DEI efforts.
Democrats on Capitol Hill and at the FCC were quick to criticize the settlement and to link the agreement to the pending decision at the FCC.
Democratic Senator Edward Markey called Trump's lawsuit "frivolous" and said its timing "raises serious questions about FCC independence and Paramount's true reason for settling with Trump." The FCC's merger review should be free from political interference and proceed with "the utmost transparency." He said Carr must hold a full commission vote on the merger.
Democratic Senator Elizabeth Warren said Wednesday she's calling for an investigation into whether the Paramount settlement with Trump violates any anti-bribery laws.
“Paramount folded at the same time it needs Trump’s approval for a billion-dollar merger,” she said in a social media post.
Trump has aggressively attacked media organizations from CNN to the New York Times and the Washington Post, using the term “fake news” to discredit unflattering reports. The president won a $15 million settlement from ABC News last year over claims that host George Stephanopoulos defamed him by describing a previous court verdict.
After 60 Minutes aired segments about Trump's contentious visit with Ukraine's president in February and his designs to take control of Greenland, Trump lashed out on social media and called on Carr specifically to " impose maximum fines and punishment" on CBS.
Anna Gomez, the only Democratic FCC member and an outspoken critic of the commission’s current stance on the media, said Paramount’s decision to settle “casts a long shadow over the integrity of the transaction pending before the FCC.” She will be participating in a town hall organized by the American Civil Liberties Union to discuss the state of free speech rights on July 8.
She also called on her colleagues to bring the Skydance merger before the full commission for a vote.
--With assistance from Stephanie Lai.
(Updates with comment from President Trump in sixth paragraph)
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