Corporatized Battle over Unrestricted Expression
The Freedom of the Press Foundation (FPF) has taken a bold step in challenging media conglomerate Paramount over a recent settlement with CBS News. The FPF, a shareholder of Paramount, believes that the settlement could be a violation of federal bribery laws.
The controversy stems from a lawsuit against CBS News, with Paramount agreeing to pay sixteen million dollars to settle the case. This settlement was made as Paramount was pursuing an eight-billion-dollar merger with Skydance, requiring approval from the Federal Communications Commission (FCC).
The FPF's lawyer, Brenna Frey, is incensed about the settlement and considers it an affront to CBS's reporters and the First Amendment. She believes that the settlement undermines the integrity of journalism and compromises the editorial operations of CBS and ABC, much to the dismay of the journalists who work at each network.
The FPF's legal pressure is drawing attention to Paramount's disregard for the journalists it employs. The FPF's lawsuit against Paramount would be filed in Delaware's court system, where the recent changes to Delaware law have limited the FPF's ability to access communications between directors.
Despite these challenges, the FPF is displaying admirable creativity in putting legal pressure on Paramount, seeking to protect the independent press. The FPF's shares in Paramount will convert into shares of the combined Skydance-Paramount, but decisions made by the predecessor firm's board will have no bearing on the new entity.
Meanwhile, other TV outlets are in the process of regaining some independence. Comcast's cable portfolio, including MSNBC and CNBC, will be spun off into a new company called Versant by the end of 2025.
The FPF's lawsuit against Paramount is time-sensitive, as the clock began ticking the moment the FCC approved the merger, and once the two companies officially become one, the window for litigation will close. An injunction to delay the merger is a possible option, but it's hard to imagine a judge granting it.
Shari Redstone, Paramount's controlling shareholder, stands to make two billion dollars from the merger. The settlement between Paramount and Trump has done irreparable harm to the company's reputation, particularly in the eyes of its journalists and shareholders. The FPF has sent a letter to Paramount demanding records relevant to the decision, with the intention of putting together a shareholder derivative lawsuit.
The FPF's lawsuit against Paramount is an attempt to win a free-speech argument in a courtroom where the First Amendment is simply not relevant. However, the FPF's belief that such a settlement could be a violation of federal bribery laws adds a new dimension to the ongoing debate about media consolidation and its impact on journalistic integrity.
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