The Freedom of the Press Foundation notified company executives that a settlement “could amount to a bribe.”
If Paramount Global, the parent company of CBS News, settles a $20 billion lawsuit brought by U.S. President Donald Trump, it could face another lawsuit from a leading press freedom organization.
The Freedom of the Press Foundation (FPF), a Paramount shareholder, notified company executives in a letter on Friday that a settlement with Trump “could amount to a bribe” to the president and his administration “for their approving and not impeding” a merger of Paramount and the entertainment company Skydance.
FPF addressed its letter to Shari Redstone, Paramount’s controlling shareholder. In recent weeks, Redstone — who stands to profit from federal approval of the merger — has come under fire for advocating a settlement with Trump and keeping tabs on CBS coverage of the president, who claims the outlet deceptively edited an interview it conducted with Kamala Harris ahead of the 2024 election.
Paramount’s leadership has reportedly discussed settling the Trump lawsuit for up to $20 million. Redstone has privately pushed for a settlement in hopes that it will “clear the way for the merger’s approval,” The Wall Street Journal reported last month.
“I am writing to demand that you institute an immediate litigation hold, as FPF plans to file a shareholder derivative lawsuit on behalf of Paramount in the event of a settlement by Paramount,” wrote Seth Stern, FPF’s director of advocacy. “We expect that other long-term shareholders will join the suit.”
FPF notes that a derivative lawsuit “is a procedure that allows shareholders of a company to recover damages incurred due to impropriety by executives and directors.”
“Any damages award would go to Paramount, not FPF,” the group added.
The lawsuit warning comes after a trio of U.S. senators cautioned that Paramount “may be engaging in potentially illegal conduct” by pursuing a settlement with Trump in exchange for approval of the Skydance merger.
“Paramount appears to be attempting to appease the administration in order to secure merger approval,” wrote Sens. Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), and Ron Wyden (D-Ore.) in a May 19 letter to Redstone.
Internally, Paramount executives have acknowledged that settling the Trump suit “could expose directors and officers to liability in potential future shareholder litigation or criminal charges for bribing a public official,” the Journal reported in February.
In a statement on Friday, Stern said that “corporations that own news outlets should not be in the business of settling baseless lawsuits that clearly violate the First Amendment and put other media outlets at risk.”
“A settlement of Trump’s meritless lawsuit may well be a thinly veiled effort to launder bribes through the court system,” said Stern. “Not only would it tank CBS’s reputation but, as three U.S. senators recently explained, it could put Paramount executives at risk of breaking the law.”
“Our mission as a press freedom organization is to defend the rights of journalists and the public, not the financial interests of corporate higher-ups who turn their backs on them. When you run a news organization, you have the responsibility to protect First Amendment rights, not abandon them to line your own pockets,” Stern added. “We hope Paramount will reconsider the dangerous path it appears to be contemplating but, if not, we are prepared to pursue our rights as shareholders. And we hope other Paramount shareholders will join us.”
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