Lawmakers Call for FCC Corruption Probe Over Skydance/Paramount

“The appearance of this wink-wink deal basically lets every other company and every other billionaire know that Trump is open for business, apparently happy to accept offers in exchange for favors,” said Sen. Elizabeth Warren, D-Mass. “All networks -- ABC, NBC, PBS, NPR -- are under the same obligations to the public and the Commission” as CBS, emailed Center for American Rights President Daniel Suhr, whose news distortion complaint is the basis of the FCC’s proceeding. “Those other networks are under the same standard and should adopt the same approach.”

The FCC approved the deal in a 2-1 vote in an order late Thursday, just hours after FCC Chairman Brendan Carr at a press conference said there was “no new news on that particular front.” The order said Skydance's promises to eschew diversity programs, hire an ombudsman to monitor news bias for two years, and work closely with affiliate stations resulted in the deal being in the public interest. “These commitments, if implemented, would enable CBS to operate in the public interest and focus on fair, unbiased, and fact-based coverage,” said Carr in a news release.

Republican FCC Commissioner Olivia Trusty said the purchase “reflects the free market at work, where private investment, not government intervention, is preserving an iconic American media institution.” Democratic Commissioner Anna Gomez blasted the transaction as an assault on the First Amendment but praised Carr for bringing it to a vote before the full FCC instead of approving it “behind closed doors” on delegated authority.

In an interview on CNBC Thursday evening, Carr pushed back on lawmaker accusations that the approval following on the heels of Paramount paying $16 million to settle a lawsuit from President Donald Trump amounts to bribery. “The new owners of CBS came in, they made a commitment to making progress on bias and actually trying to move back towards fact-based journalism. And as soon as they did that, Democrats in the House all of a sudden launched an investigation,” Carr said. “I guess we can't return to fact-based journalism.”

Trump earlier in the week said the new owners of Paramount promised him $20 million in public service announcements on top of the settlement amount (see 2507220070). The FCC, Skydance and Paramount didn’t comment on the corruption accusations.

Carr said Thursday that the Trump lawsuit, the FCC’s news distortion proceeding, and the Skydance approval are “three very separate things.” Lawmakers, Gomez, free speech advocates and public interest groups disagree. “In an unprecedented move, this once-independent FCC used its vast power to pressure Paramount to broker a private legal settlement and further erode press freedom,” Gomez said. “Even more alarming, it is now imposing never-before-seen controls over newsroom decisions and editorial judgment, in direct violation of the First Amendment and the law.”

'Far Afield'

The conditions touching on news bias and diversity programs “are far afield from the FCC's legitimate interest in reviewing a merger,” emailed the Foundation for Individual Rights and Expression’s Robert Corn-Revere, a former FCC chief of staff. “The President's crowing about a side deal with Skydance for PSAs as part of the CBS litigation settlement confirm that Chairman Carr was less than honest when he said the merger and the settlement are not linked.”

The order leaves the news distortion proceeding against CBS open, though communications attorneys told us outstanding investigations or enforcement proceedings against licensees are traditionally resolved by the agency before it approves transactions. The item is likely being left open “to keep a hook” on the network and preserve the FCC’s leverage over it, said Public Knowledge Senior Vice President Harold Feld. “Our action today does not pre-judge or in any way prejudice any actions we may take in that proceeding,” the FCC order said.

CAR's Suhr said the FCC should use a “trust but verify” policy with New Paramount going forward. “We appreciate the commitments they have made in their letters, and we will remain vigilant on behalf of viewers to ensure they follow through on them,” Suhr said. After being asked on Fox News Thursday if the daytime talk show The View is in the administration’s crosshairs after it was criticized by the White House, Carr said that Trump has “exposed the media gatekeepers” and that the consequences of that “aren’t quite finished.”

“The Paramount payout and this reckless approval have emboldened those who believe the government can -- and should -- abuse its power to extract financial and ideological concessions, demand favored treatment, and secure positive media coverage,” said Gomez. “It is a dark chapter in a long and growing record of abuse that threatens press freedom in this country.” Suhr said that “Of course it shouldn't take the leverage of a licensing proceeding to get companies to comply with the law” but that he “will still take it as a win.”

Carr told CNBC that Skydance's promises are all similar to concessions made in past acquisitions approved by the FCC. The agency has put ombudsmen in place in prior deals (such as Comcast/NBCU), Carr said. “The prior FCC during the Biden years, put pro-DEI [diversity, equity, and inclusion] commitments in different transactions,” Carr said. “The procedures that we put in place in this deal have lots of precedent.” Robby Starbuck, an anti-DEI activist who has met with Carr, praised him for getting the concessions from Skydance. Carr “has once again delivered!” Starbuck said in a post on X. “Proud to have advised him and the FCC as they root out these discriminatory policies!”

During a Multicultural Media, Telecom and Internet Council (MMTC) conference Friday (see 2507250033), Rep. Glenn Ivey, D-Md., said the Skydance order’s ombudsman provision “looks a lot more like a censor to me,” he said. The administration “is using the censorship power to undermine legitimate political disagreement, to push it to the side … and to continue the bullying tactics that have been exhibited by the Trump administration,” he said.

Hill Pushback

House Commerce Committee ranking member Frank Pallone of New Jersey, Senate Communications Subcommittee ranking member Ben Ray Lujan of New Mexico and several other senators in the Democratic caucus roundly criticized the FCC's approval and in some instances claimed Paramount engaged in bribery to secure the decision. Pallone said he “will be launching an investigation into the circumstances of this approval, including the conduct of the FCC, Skydance, and Paramount,” over actions that he sees as “blatant corruption.”

Pallone said it’s “clear that the FCC is in Trump’s pocket and that Skydance and Paramount have been engaging in a quid pro quo for months. If there was any doubt, it’s now obvious why Paramount threw 60 Minutes … under the bus” and canceled Stephen Colbert’s The Late Show. “Trump demands allegiance from everyone around him, and it’s disgusting to see companies like Skydance and Paramount bowing to his endless and illegal demands,” Pallone said.

Lujan and Sen. Ed Markey, D-Mass., said the timing of the decision in relation to the settlement “reeks of the worst form of corruption.” The senators are “glad” that the FCC took a vote on the deal, but the “stench of this transaction will linger over the Commission for years.” Attorneys told us that while it is possible a prosecutor could choose to look into bribery allegations around the deal, such charges are very hard to prove. Appeals of FCC merger decisions have also not fared well in recent years, Feld said.

Warren has also sought a probe of the FCC’s handling of the review. “It’s an open question whether the Trump administration’s approval of this merger was the result of a bribe,” she said. “It sure looks like Skydance and Paramount paid $36 million to [Trump] for this merger, and he’s even bragged about this crooked-looking deal. I’ve been ringing the alarm bell for months, launching a Senate investigation into possible corruption, and this merger must be investigated for any criminal behavior.”

“These people don’t hide the corruption,” said Sen. Chris Murphy, D-Conn. “They celebrate it.” He noted the FCC’s “major concerns [about Skydance/Paramount] all went away once Paramount pulled Donald Trump’s biggest critic off the air” by canceling The Late Show. Sen. Bernie Sanders, I-Vt., called the sequence of events that led to the FCC approving Skydance-Paramount “authoritarianism in action." Sanders, Warren and Sen. Ron Wyden, D-Ore., opened a probe in May into whether Paramount was “engaging in improper conduct involving the Trump Administration” in a bid to smooth approval of the Skydance purchase.

At the MMTC event, former Democratic FCC Chairman Reed Hundt said the various merger issues raise the question of whether Congress should eliminate the FCC’s public interest standard. “It is a way for any commission to pressure a license holder in the media realm,” he said. Hundt also noted that the FCC’s work on DEI is in keeping with the U.S. Supreme Court’s evolving view of discrimination. Traditionally, the FCC focused on “communications-specific” concerns, not employment practices, said former FCC acting Chairwoman Mignon Clyburn. “That’s the shift that we’re talking about here,” she said.

Former Commissioner Mike O’Rielly said he has long supported limiting what the FCC can do based on the public interest standard or eliminating the standard. “This has been a long time coming” and the FCC couldn’t have done a worse job than it did handling Standard's failed purchase of Tegna in the last administration (see 2306010077), he said.