A potential $35 million settlement of President Trump’s lawsuit against Paramount’s CBS affiliate has been delayed after the company’s management continued to fear a potential legal backlash, The Post has learned.
Paramount’s hesitancy to make a deal prompted members of Trump’s legal team to maintain its initial bargaining position and demand even more money to end the protracted legal dispute, according to people close to the matter.
The two sides, however, remain in active settlement negotiations, according to a regulator filing. A potential deal breakthrough is always a possibility.
The $35 million settlement was recently floated and considered by both sides, according to two sources, as negotiations over the $20 billion lawsuit enter their sixth month. The impasse threatens to throttle a bigger prize — media heiress Shari Redstone’s plan to sell Paramount to independent studio Skydance.
Approval of the deal by Trump’s regulators at the Federal Communications Commission is seen as contingent on settlement of the case, people at Paramount tell The Post. Trump legal reps and officials deny that the two issues are related, but Paramount executives are concerned that any large settlement would be considered a bribe since the fate of the $8 billion Paramount-Skydance merger is at stake.
A settlement for $35 million would have been a 30% haircut from the original $50 million Trump’s legal advisers had tried to squeeze out of the company to end the lawsuit filed in Texas federal court last year, as The Post previously reported.
“(The Trump people) appeared to be willing to settle for less, but even that amount worries the Paramount people,” one deal insider told The Post.
A source close to the Trump legal team denied that it was on the verge of settling for $35 million.
“We have a strong case,” the source said.
A Paramount spokesman declined comment. A legal rep for Trump didn’t return a request for comment. A Redstone rep didn’t return a request for comment.
One thing appears certain: Paramount’s continued reluctance to pay a significant settlement, one lower than the Trump people had initially sought, hardened the president’s legal team’s position and could create a situation where the case remains in court for a protracted period, sources close to the matter say.
The lawsuit alleges that CBS News’ longtime news program “60 Minutes” doctored an interview with Democratic presidential nominee Kamala Harris ahead of the 2024 presidential election.
It comes as Trump-nominated FCC Chair Brendan Carr subsequently launched a probe into the alleged biased editing, casting a cloud over whether the merger will get the green light from the regulator.
Redstone, Paramount’s controlling shareholder, stands to net as much as $2 billion when her long-held desire to unload the company to Skydance is completed. Without a settlement, there is no windfall for the cash-bleeding Redstone, and therein lies the issue for Paramount.
Redstone has officially recused herself from negotiations given she will personally benefit, but the notion that the lawsuit is tied to the regulatory approval of her deal is vexing her management team and preventing it from signing off on a payment of any size that could be legally construed as a bribe. The team fears it could be subject to litigation and even criminal bribery charges that are not covered by insurance, people with direct knowledge of the matter tell The Post.
Several Democrats in Congress have raised the bribery issue and the worry is that a state attorney general or Congress — if it changes hands in the midterms — could launch an investigation.
Redstone had indicated in the past she was willing to pay as much as $50 million to make the case go away so she can preserve some semblance of her inheritance from her late father, media mogul Sumner Redstone, which has been decimated with the decline in Paramount’s fortunes in recent years.
The board has recently offered $15 million — the same amount paid by Disney-owned ABC News to settle a defamation lawsuit brought by Trump after “This Week” anchor George Stephanopolous repeatedly accusing him of “rape.”
In the CBS lawsuit, both sides have weighed making up the difference with public service ads involving causes that the president would appreciate, including those combating antisemitism and promoting US veterans, The Post previously reported.
But the stalemate continues with the Trump team brushing off the $15 million offer, the $35 million deal stalled and the PSA offer not advancing. Meanwhile, the delay — and its implications for the Paramount-Skydance deal — has been looming large for all the players involved.
Skydance is run by movie maven David Ellison, the son of Trump friend and Oracle co-founder Larry Ellison, who is worth approximately $250 billion.
Behind the scenes, Skydance continues to draw up plans for a massive restructuring of the media properties, including CBS, once considered the crown jewel of the Redstone empire for its top-rated shows, sports and influential news programming such as “60 Minutes.”
Cord-cutting and changes to the media business landscape have squeezed profits at CBS News. The network’s boss Wendy McMahon and longtime “60 Minutes” executive producer Bill Owens recently departed, voicing concerns over the settlement of what it considers a frivolous case with Trump in order to proceed with the deal.
Skydance and its deal partner, private equity powerhouse RedBird Capital, have anointed former NBCU chief Jeff Shell as the new CBS chief if the deal gets done. He is likely to downsize the organization and, according to sources, address the alleged political biases in its news programming that are at the center of the Trump lawsuit.
For years conservatives have complained that CBS tilts the scales in interviews and programming that projects a left-leaning political bias that under a strict reading of Federal Communications Commission rules could violate the law since it operates over public airwaves that demand it serve the “public interest.”
CBS has denied the charges and the main allegation that it purposely edited the Harris interview to edit out her famous “word salad” vernacular to make her sound more presidential.
If there is no settlement, the federal judge in the Trump lawsuit is expected to grant discovery in the case in the coming weeks, which would be a significant legal escalation that Paramount and Redstone wanted to avoid.
If the matter doesn’t get resolved by October, the deal could be voided under the preliminary agreement reached between Skydance and Paramount.
Redstone has a looming tax bill coming due over her late father’s estate and other obligations that could total in the hundreds of millions of dollars.
