redstone

By early spring, Paramount Global was in crisis. President Trump wouldn’t budge from his demand for an eye-popping sum of money and an apology from the company to settle his lawsuit over a CBS News “60 Minutes” interview with Kamala Harris. Journalists at the storied broadcaster were in revolt against the parent company.

Meanwhile, Paramount’s board faced withering pressure, with a settlement widely seen as a prerequisite for getting government approval for the company’s $8-billion sale to David Ellison’s Skydance Media, or the deal would collapse.

Then a new emergency erupted.

On May 4, CBS aired a hard-hitting “60 Minutes” segment that took aim at Trump’s targeting of law firms. Correspondent Scott Pelley anchored the report, which relied heavily on an interview with a leading Trump irritant — former top Hillary Clinton advisor Marc Elias.

Trump was furious. He threatened Paramount with an additional lawsuit alleging defamation, according to people close to the situation who were not authorized to comment.

The behind-the-scenes drama eventually would culminate with Paramount agreeing to pay $16 million to end the president’s battle over edits to October’s Harris interview, which Trump alleged was manipulated to boost the then-vice president’s election chances. Trump’s suit had demanded $20 billion in damages.

The deal resulted from months of back-and-forth among a constellation of power players with competing interests: the president, mogul Shari Redstone, tech billionaire Larry Ellison and his son David, Hollywood super agent Ari Emanuel, CBS News’ ousted leader Wendy McMahon and Jeff Shell, a former NBCUniversal chief now with RedBird Capital Partners, which backs Ellison’s Skydance.

The settlement, which the president approved late Tuesday, included a commitment by Trump to drop his claims and not sue over the May “60 Minutes” broadcast, according to sources and a Paramount statement.

Paramount said it agreed to pay Trump’s legal fees. The remainder of the $16-million settlement will go toward his future presidential library.

But the beleaguered company behind “Mission: Impossible” and “Yellowstone” mustered victories, withstanding the Trump team’s earlier demand for a $100-million payout, the knowledgeable sources said.

The company also refused to apologize for CBS’ reporting or edits, a stance to protect its journalistic ethics and 1st Amendment rights.

“This settlement allows Paramount to focus on its prospective sale, and CBS can maintain its principles,” said C. Kerry Fields, a business law professor at the USC Marshall School. “But principle has its price, and there certainly was one set here.”

The eight-month skirmish with Trump shined a harsh light on Paramount’s vulnerabilities — and deep divisions within the company and its prospective new owners.

Paramount had a narrow window to reach a truce. The company wanted to finalize the settlement before Wednesday, when Paramount held its annual shareholder meeting and three new members joined the board.

“This [settlement] was all about survival — it was that dark,” Fields said. “Paramount has to execute the sale to Skydance in order to survive.”

At first, Paramount’s sale to the Ellison family seemed like a sure bet. Larry Ellison, co-founder of Oracle Corp., is close to Trump and is also a possible buyer for TikTok, another deal of interest to the president. The landmark Paramount-Skydance deal, struck a year ago, could reshape one of Hollywood’s original studios and the entertainment landscape.

Redstone and her family agreed to part with their entertainment holdings, National Amusements Inc., and controlling Paramount shares. The family’s shaky finances were a catalyst for the sale. Redstone has borrowed heavily to meet debt obligations, including a $186-million term loan from Larry Ellison last year. The family is waiting for the cash from the sale of Paramount and National Amusements to the Ellisons and RedBird, a private equity firm.

But an unexpected blunder altered the deal’s course.

Last fall, “60 Minutes” invited Trump and Harris to participate in preelection interviews. Trump agreed, then backed out. CBS News went forward with a Harris sit-down.

Former Vice President Kamala Harris talks to “60 Minutes” correspondent Bill Whitaker.

(CBS News)

Correspondent Bill Whitaker asked Harris about the Biden administration’s rocky relations with Israel’s prime minister. Producers used different portions of her answer on two programs: a convoluted response on CBS’ Sunday morning show “Face the Nation,” and a more succinct part on “60 Minutes.”

Trump and his supporters zeroed in on the discrepancy. They accused CBS of doctoring the interview. CBS News denied the allegation, saying the edits were routine.

Days before the election, Trump sued in Amarillo, Texas, ensuring the case would be overseen by a Trump-appointed judge.

His lawsuit alleged the “60 Minutes” edits amounted to election interference — “malicious, deceptive, and substantial news distortion calculated to confuse, deceive, and mislead the public,” in the suit’s words.

President Donald Trump in the Oval Office.

(Bloomberg)

1st Amendment experts said the case had no merit; some figured it was a campaign stunt.

Days later, Shell, the RedBird executive who will become Paramount’s president should Skydance take over, held a conference call with top CBS executives. Shell suggested “60 Minutes” release the full Harris interview transcript in a bid for transparency, according to people familiar with the matter.

News executives refused, drawing a clear division between some high-level Paramount executives and Ellison’s team.

Those Paramount executives have bristled over Shell’s involvement, including a comment he reportedly made to McMahon late last year, stating the company eventually would have to settle. Skydance has said it has an agreement with Paramount that gives Ellison and Shell the ability to give input on key business issues — even before acquiring Paramount.

A spokesperson for Shell declined to comment.

The role of Shell, ousted from his previous role running NBCUniversal after acknowledging an inappropriate relationship with an underling, has been controversial. Representatives for the creators of “South Park” have accused him of overstepping his authority and meddling with a protracted negotiation over their overall deal and streaming rights to the long-running cartoon. A representative for Shell denied that accusation.

Trump had scored previous victories over media organizations. In December, the Walt Disney Co. agreed to pay him $16 million, including $1 million for his attorney fees, to end a dispute stemming from ABC anchor George Stephanopoulos’ inaccurate description of Trump’s liability in a civil court case. Press advocates howled.

Paramount held firm. But it failed to get Trump’s case dismissed or moved to a court in New York, where CBS and “60 Minutes” are based.

So the company was in a box. Its sale to Skydance requires the approval of the Federal Communications Commission to transfer CBS TV station licenses to the Ellisons, and that consent has been elusive.

In one of his first moves as FCC chairman, Trump appointee Brendan Carr launched an inquiry into whether CBS’ edits of the Harris interview rose to the level of news distortion — the crux of Trump’s lawsuit.

In February, Carr demanded CBS release a raw transcript of the Harris interview and the unedited footage. CBS complied; the material showed Harris had been accurately quoted.

The Texas judge ordered Paramount and Trump’s lawyers into mediation. Talks began April 30.

That weekend, “60 Minutes” ran its report on Trump and the law firms, riling Redstone and others. The Trump team and Paramount were already far apart, the sources said.

Soon, CBS News and Stations President Wendy McMahon was forced out. Knowledgeable sources attributed her departure to months of strife and persistent criticism from Redstone, who serves as Paramount’s chair. McMahon also made missteps, including overseeing an unsuccessful reboot of “CBS Evening News.”

Her exit followed that of Bill Owens, the longtime executive producer of “60 Minutes,” who fought efforts to settle.

The day McMahon was ousted, left-leaning U.S. Sens. Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.) and Ron Wyden (D-Ore.) lobbed a salvo at Redstone. In a May 19 letter, they warned that Paramount board members risked possible bribery charges if they paid Trump to settle the lawsuit as a way to win FCC approval for the Skydance deal.

By early June, Redstone and the Ellison team were getting restless.

Emanuel, the agent, stepped in to help get the dealmaking back on track, people familiar with the matter said. Emanuel is Trump’s former talent agent and one of Ellison’s closest allies.

On June 7, Ellison met briefly with Trump at a UFC event in New Jersey. Emanuel is executive chairman of the WME Group and chief executive of UFC’s parent company, TKO.

According to a source, Emanuel associate Dana White, the Trump-supporting UFC chief executive, helped facilitate the Ellison meeting with the president, which occurred steps away from the fighters’ octagon.

People close to Ellison and Emanuel declined to discuss Ellison’s interactions with the president. Representatives of Skydance, Redstone and Emanuel declined to comment for this story.

Finally, a breakthrough came when Trump offered support for Ellison and the Skydance deal, though he continued to blast Harris and CBS News.

“Ellison is great,” Trump said from the White House lawn on June 18. “He’ll do a great job with it.”

Meanwhile, the clock was ticking. Redstone and others wanted the board to handle the settlement before the shareholder meeting, when one director stepped down, and three new members joined the board.

Redstone recused herself from voting but made her wishes known.

The settlement was finally reached about 10 hours before the Paramount board switched.

One person close to the legal effort said the agreement “got over the finish line” due to a sweetener for Trump. His team anticipates that Paramount networks eventually will run millions of dollars worth of free commercials, or public service announcements, in support of Trump causes, including combating antisemitism and increasing border security.

Paramount denied this.

“Paramount’s settlement with President Trump does not include PSAs,” the company said in a statement. “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.”

Skydance declined to comment. Emanuel did not respond to messages.

The settlement does contain another provision championed by Trump.“60 Minutes” will release transcripts of interviews with eligible U.S. presidential candidates after those interviews air, “subject to redactions as required for legal or national security concerns,” Paramount said.

1st Amendment advocates were discouraged by the deal. So were Trump’s enemies, including the senators who had vowed to investigate the deal for bribery.

Paramount’s move to “settle a bogus lawsuit with President Trump over a 60 Minutes report he did not like is an extremely dangerous precedent,” Sanders, the U.S. senator, said in a statement. “Paramount’s decision will only embolden Trump to continue attacking, suing and intimidating the media.”

Paramount Global’s efforts to appease President Trump could carry a steep price, and not just financially. As Paramount executives struggle to win government approval for its planned sale, the legal risks and political headaches are spreading — from Washington to Sacramento.

Three U.S. senators have warned Paramount’s controlling shareholder Shari Redstone and other decision-makers that paying Trump to drop his $20-billion lawsuit over an October “60 Minutes” interview with former Vice President Kamala Harris could be considered a bribe.

Scrutiny widened late last week when two California Democrats proposed a state Senate hearing to probe details of the drama that has roiled the media company for months. The senators invited two former CBS News executives — who both left, in large part, because of the controversy — to testify before a joint committee hearing in Sacramento to help lawmakers examine problems with a possible Trump settlement.

“I haven’t seen a president act in this brazen of a manner,” state Sen. Josh Becker (D-Menlo Park) said in an interview. “We’re concerned about a possible chilling effect any settlement might have on investigative and political journalism. It would also send a message that politically motivated lawsuits can succeed, especially when paired with regulatory threats.”

Settling the Trump lawsuit is widely seen as a prerequisite for regulators to finally clear Paramount’s $8-billion sale to Skydance Media, which Redstone has been desperately counting on to save her family’s fortunes.

Trump contends CBS edited the “60 Minutes” interview to enhance Harris’ appeal in the 2024 presidential election, which she lost. He reportedly rebuffed Paramount’s recent $15-million offer to settle his lawsuit, which 1st Amendment experts have dismissed as frivolous.

“This is a really important case,” said Scott L. Cummings, a legal ethics professor at UCLA’s School of Law. “Legislators are starting to raise alarms.”

But whether federal or state politicians could foil a Trump settlement is murky. Experts caution, for example, that it may be difficult, if a settlement is reached, to prove that Paramount’s leaders paid a bribe.

Congress has grappled with such distinctions before, Cummings said. The U.S. Senate acquitted Trump in February 2020 after the House voted to impeach him for allegedly holding up nearly $400 million in security aid to pressure Ukraine to investigate former President Biden and his son Hunter. Major universities and law firms offered significant concessions to the administration this year to try to carve out breathing room.

“We would have to have a lot more facts,” Cummings said. “Bribery requires a quid pro quo … and [Trump and his lieutenants] are always very careful not to explicitly couple the two things together. But, clearly, they are related, right? This is the challenge, legally speaking.”

Even if a Paramount payoff could be proved to be a bribe, it’s unclear who would prosecute such a case.

No one expects the Trump-controlled FBI or others within the U.S. Department of Justice to investigate allegations of bribery. Trump also has a grip on congressional Republicans and the Federal Communications Commission is run by a Trump appointee, Brendan Carr, who in one of his first acts as chairman, opened a public inquiry into whether the “60 Minutes” edits rose to the level of news distortion.

It may fall to state prosecutors to dig into the issue, Cummings said.

Vice President Kamala Harris talks to “60 Minutes” correspondent Bill Whitaker.

(CBS News)

That hasn’t stopped nationally prominent progressive lawmakers from sounding alarms.

U.S. Sens. Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.) and Ron Wyden (D-Ore.) have demanded Paramount provide information about the company’s deliberations or concessions to facilitate a deal with Trump, including whether newscasts were toned down.

“It is illegal to corruptly give anything of value to public officials to influence an official act,” the lawmakers wrote in their May 19 letter to Redstone. “If Paramount officials make these concessions … to influence President Trump … they may be breaking the law.”

Redstone and Paramount failed to respond to the senators’ questions by this week’s deadline, according to Warren’s office.

Sen. Elizabeth Warren (D-Mass.) has suggested that Paramount executives could be liable for unlawfully paying a bribe if it settles President Trump’s lawsuit against CBS to secure approval of Paramount’s sale to Skydance Media.

(Mark Schiefelbein / Associated Press)

Paramount and a Redstone spokesperson declined to comment.

Lawmakers often express interest in big media takeovers, and Skydance’s proposed purchase of an original Hollywood movie studio and pioneering broadcaster CBS could be an industry game changer. But this time, interest is less focused on vetting the Ellison family or the deal’s particulars and more about determining whether Trump inappropriately wields his power.

Trump has demanded Paramount pay “a lot” of money to settle his lawsuit. The president also has called for CBS to lose its station licenses, which are governed by the FCC.

For more than a month, attorneys for Paramount and Trump have participated in mediation sessions without resolution.

Paramount offered $15 million but Trump said no, according to the Wall Street Journal. Instead, the president reportedly demanded at least $25 million in cash, plus an additional $25 million in free commercials to pump his favorite causes. He also wants an apology.

The latter is a red line for CBS News executives who say they have done nothing wrong, according to insiders who were not authorized to discuss the sensitive deliberations.

Paramount’s leaders have clashed over settlement efforts, according to the sources.

The two California state senators — Becker and Tom Umberg (D-Orange) — hope such fractures provide an opening.

Late last week, the pair invited former CBS News and Stations President Wendy McMahon and former “60 Minutes” executive producer Bill Owens to testify at a yet-unscheduled oversight hearing in Sacramento.

McMahon exited CBS last month under pressure for her management decisions, including resistance to the Trump settlement, sources said.

Owens resigned in April, citing a loss of editorial independence.

“You are being approached as friendly witnesses who may help our committees assess whether improper influence is being exerted in ways that threaten public trust and competition in the media sector,” Becker and Umberg wrote to the former executives. Becker is chairman of the Senate Energy, Utilities & Communications Committee; Umberg heads the Senate Judiciary Committee.

California has an interest, in part, because Paramount operates in the state, including a large presence in Los Angeles, Becker told The Times.

The controversy over the edits began in October after CBS aired different parts of Harris’ response to a question during a “60 Minutes” interview a month before the election. Producers of the public affairs show “Face the Nation” used a clip of Harris giving a convoluted response. The following day, “60 Minutes” aired the most forceful part of her answer, prompting conservatives to cry foul.

Trump filed his federal lawsuit in Texas days before the election, alleging CBS had deceptively edited the Harris interview to boost her election chances, an allegation CBS denies. After returning to the White House, Trump doubled the damages he was seeking to $20 billion. His team claims he suffered “mental anguish” as a result of the interview.

CBS has asked the Texas judge, a Trump appointee, to dismiss the lawsuit, saying the edits were routine.

Since then, the FCC’s review of Paramount’s Skydance deal has become bogged down. Paramount needs Carr’s approval to transfer CBS television station licenses to the Ellison family.

Paramount has said it is treating the proposed settlement and FCC review on the Skydance merger as separate matters.

Experts doubt Trump sees such a distinction.

Trump and his team “essentially are using government processes to set up negotiations that end up benefiting Trump personally in ways that raise corruption concerns,” Cummings said.

Paramount’s decision could open the company to shareholder complaints.

The reason Trump’s CBS “60 Minutes” lawsuit has become such a lightning rod is “because the lawsuit is so ridiculously frivolous,” said Seth Stern, advocacy director for the Freedom of the Press Foundation, which owns Paramount shares and has vowed a lawsuit if the company capitulates.

“This is so transparently an abuse of power — a shakedown,” Stern said.

Media analyst Richard Greenfield of LightShed Partners suggested that Trump’s goal may be about more than his reported demand of nearly $50 million.

“The far bigger question is whether there is any number that Trump would want to settle the CBS/60 Minutes lawsuit,” Greenfield wrote in a blog post this week. “If Trump’s goal is to weaken the press and cause persistent fear of lawsuits that could negatively impact business combinations, keeping the CBS/60 Minutes lawsuit ongoing could be in the President’s best interests.”

UCLA’s Cummings sees another deleterious outcome.

A settlement could “legitimize the narrative that Trump puts out that there’s some sort of corruption within these media entities,” Cummings said. “He could point to a settlement and say: ‘I told you they did something wrong, and they now agreed because they paid me this amount of money.’ ”

“Even though they would be paying to get this deal through,” Cummings said.

Paramount Global chairwoman and controlling shareholder Shari Redstone is battling cancer as she tries to steer the media company through a turbulent sales process.

“Shari Redstone was diagnosed with thyroid cancer earlier this spring,” her spokeswoman Molly Morse said late Thursday. “While it has been a challenging period, she is maintaining all professional and philanthropic activities throughout her treatment, which is ongoing.

“She and her family are grateful that her prognosis is excellent,” Morse said.

The news comes nearly 11 months after Redstone agreed to sell Paramount to David Ellison’s Skydance Media in a deal that would end the family’s tenure as major Hollywood moguls after four decades.

However, the government’s review of the sale to Skydance hit a snag amid President Trump’s $20-billion lawsuit against Paramount and its subsidiary CBS over edits to an October “60 Minutes” broadcast.

Redstone, 71, told the New York Times that she underwent surgery last month after receiving the diagnosis about two months ago. Surgeons removed her thyroid gland but did not fully eradicate the cancer, which had spread to her vocal cords, the paper said.

She continues to be treated with radiation, the paper reported.

The Redstone family controls 77% of the voting shares of Paramount. Since Bob Bakish was ousted as chief executive last year, the company has been managed by a trio of executives who share the title of co-chief executive.

Her father, the late Sumner Redstone, built the company into a juggernaut but it has seen its standing slip in recent years. There have been management missteps and pressures brought on by consumers’ shift to streaming. The trend has crimped revenue to companies that own cable channels, including Paramount.

The COVID-19 pandemic followed by the 2023 writers and actors strikes also took a toll on Paramount and the Redstone family’s private firm, National Amusements Inc., which owns movie theaters.

Paramount cut its dividend to shareholders two years ago, leaving the family in a financial bind.

Financial pressures contributed to Redstone’s decision to entertain offers for Paramount and National Amusements, which holds the Paramount shares.

Nearly two years ago, Ellison and Redstone began talks that culminated last July with an agreement on a multi-phased $8-billion deal that would pass the torch to Ellison.

Redstone wants to close the deal. National Amusements would receive $2.4 billion, which would pay its debts and leave the family with more than $1.7 billion.

She has urged the company to settle the lawsuit Trump filed in October, weeks after “60 Minutes” interviewed then-Vice President Kamala Harris. Trump accused CBS of deceptively editing the interview to make Harris look smarter and improve her election chances, a charge that CBS has denied.

The dispute over the edits has sparked unrest within the company, prompted high-level departures and triggered a Federal Communications Commission examination of alleged news distortion.

The FCC’s review of the Skydance deal has become bogged down. If the agency does not approve the transfer of CBS television station licenses to the Ellison family, the deal could collapse.

The two companies must complete the merger by early October. If not, Paramount will owe a $400-million breakup fee to Skydance.

Redstone, through National Amusements, also owes nearly $400 million to a Chicago banker who loaned the family money in 2023 and tech titan Larry Ellison, who is helping bankroll the buyout of Paramount and National Amusements.

Last week, Paramount nominated three new directors to serve on the company’s board following its July 2 investor meeting.

In a proxy filing, Paramount asked shareholders to expand the board to seven directors, including Redstone and three recruits: attorney Mary Boies (a member of the firm led by her husband David Boies); Silicon Valley venture capital executive Charles E. Ryan; and former Massachusetts trial court judge Roanne Sragow Licht.

They would join longtime board members Linda M. Griego, Susan Schuman and Barbara M. Byrne.