Paramount Board Worried That CBS Paying Too Much to Trump Risked Shareholder Lawsuits Claiming ‘Bribery’: NYT

AP Photo/Evan Vucci

The decision by Paramount Global, CBS’ parent company, to settle the lawsuit President Donald Trump filed against the network over a 6o Minutes interview with then-Vice President Kamala Harris last October conflicted the company’s directors who worried refusal to settle would derail the planned merger with Skydance but settling for too much could increase the risk of a shareholder lawsuit and congressional investigations.

Trump has been complaining about Harris’s October interview with CBS’s long running Sunday evening program since it aired, filing a lawsuit right before the November election and then amending it to add additional claims and demand a whopping $20 billion in damages and adding Rep. Ronny Jackson (R-TX) as a plaintiff as part of a tenuous effort to support jurisdiction in the U.S. District Court for the Northern District of Texas, a court favored by forum–shopping litigants like Trump and Elon Musk.

At the heart of Trump’s complaints about the Harris interview are his claims that a question asked by Bill Whitaker and an answer given by the Democratic presidential candidate were edited to change the appearance of her answer. This is not accurate. CBS released the full raw video footage and transcripts, insisting that the show’s broadcast “was not doctored or deceitful.” There were edits of the kind television programs frequently make to condense for time, but Trump’s accusation that they “changed” her answer simply is not true. His repeated rants that the interview somehow changed the results of last November’s election are nonsensical as well — he won that election.

CBS initially took a strongly defiant tone in two motions to dismiss filed in March that challenged both the Texas venue and the underlying cause of action in the lawsuit, denouncing the lawsuit as “an affront to the First Amendment and is without basis in law or fact.”

As the months went on, however, rumors continued to swirl that Paramount and CBS were anxious to end the conflict with the president in order to pave the way for the Skydance merger, even if it meant coughing up a large amount of money.

In the very early hours of Wednesday morning, news broke that Paramount had agreed to settle the case. The terms of the settlement, according to The New York Times, would include paying $16 million (partly to cover Trump’s legal fees and the rest to go to his presidential library), “release transcripts of ’60 Minutes’ interviews with eligible U.S. presidential candidates after such interviews have aired, subject to redactions as required for legal or national security concerns.”

Notably, the settlement did not include having CBS issue an apology.

A report by Fox News claimed that the total amount of money paid by Paramount “could reach north of $30 million,” due to “an expectation that there will be another allocation in the mid-eight figures set aside for advertisements, public service announcements, or other similar transmissions, in support of conservative causes by the network.”

However, Paramount denied this report, giving an on the record statement to Times media reporter Ben Mullins.

“Paramount now denying on the record they are party to a settlement involving PSAs for President Trump,” tweeted Mullins, along with the following statement from Paramount:

Contrary to some news reports or media speculation, Paramount’s settlement with President Trump does not include PSAs or anything related to PSAs. Paramount has no knowledge of any promises or commitments made to President Trump other than those set forth in the settlement proposed by the mediator and accepted by the parties. The material terms of the settlement agreement in principle are those disclosed by us yesterday.

The Foundation for Individual Rights and Expression (“FIRE”), a nonpartisan free speech advocacy nonprofit, released a statement from their Chief Counsel Bob Corn-Revere in response to the settlement.

The statement read:

A cold wind just blew through every newsroom this morning. Paramount may have closed this case, but it opened the door to the idea that the government should be the media’s editor-in-chief.

Trump has a long history of filing frivolous lawsuits to intimidate critics, and his targets have a long history of capitulating to avoid legal headaches. And here, he had the added tactic of using the FCC and its review of the multi-billion dollar Paramount-Skydance merger to bring added pressure to bear.

Behavior that gets rewarded gets repeated. This settlement will only embolden the president to continue his flurry of baseless lawsuits against the press — and against the American people’s ability to hear the news free from government intrusion.

The Times further reported that Paramount chair and controlling shareholder Shari Redstone had recused herself from board discussions about any potential settlement due to the conflict of interest from her large financial stake in the company, but she had nonetheless made it clear “she favored exploring a settlement” with Trump.

Numerous reports over the past months have noted internal concerns that leaving the litigation unresolved would make it more likely that the Trump administration would seek to delay or even derail the merger, which is within the powers of Trump appointee Federal Communications Commission chairman Brendan Carr.

According to the Times, Redstone had also privately criticized some editorial judgment calls at CBS and fretted that regardless of the merits of the president’s lawsuit, the litigation might not be easily or quickly resolved in court and “could cost hundreds of millions of dollars and jeopardize other divisions that have business with the government.”

The settlement does end the court battle before a looming deadline for the beginning of document production, which in other recent notable media litigation matters has led to bombshell revelations that embarrassed the companies involved.

But a multimillion dollar payout brings its own problems and scrutiny — and possible accusations of bribery. From the Times report:

Senators like Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont have warned that any payment by Paramount to Mr. Trump could be construed as a bribe, and they said they would consider holding a congressional hearing about it.

The prospect of being accused of bribery, and perhaps facing legal action because of it, had vexed Paramount’s directors, who had to weigh the corporate benefits of a settlement against the perception that they were greenlighting a deal to secure an unrelated merger.

Freedom of the Press Foundation, a First Amendment group, has said it planned to file a lawsuit on behalf of shareholders against Ms. Redstone and the Paramount board in the event of a settlement; the group has retained the prominent litigator Abbe Lowell for its effort

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