Media advocacy group Freedom of the Press Basis has despatched a warning letter to Paramount mogul Shari Redstone, outlining plans to file a lawsuit if the media firm settles a go well with introduced by President Donald Trump in opposition to its subsidiary, CBS.
“Firms that personal information shops shouldn’t be within the enterprise of settling baseless lawsuits that clearly violate the First Modification,” Freedom of the Press Basis director of advocacy Seth Stern mentioned in an announcement.
Stern issued the warning by asking for a litigation maintain on Friday afternoon, demanding that Paramount protect any paperwork referring to a possible Trump deal and urging the corporate to not settle. The nonprofit is ready to search damages as a result of it owns shares of Paramount. It plans to behave on behalf of itself and different shareholders, alleging that the settlement would quantity to the corporate’s executives “breaching their fiduciary duties and losing company belongings by partaking in conduct that US senators and others consider might quantity to illegal bribery that falls outdoors the scope of the enterprise judgment rule.” The White Home and Paramount didn’t instantly reply to requests for remark.
Final October, President Trump sued Paramount subsidiaries CBS Broadcasting and CBS Interactive, alleging that an interview with former Vice President Kamala Harris that aired on longstanding CBS Information program 60 Minutes was deceptively edited, in a way that constituted election interference. Initially in search of $10 billion in damages, Trump amended the lawsuit in February to ask for $20 billion. Paramount International has a market cap of roughly $8.5 billion.
Though Paramount beforehand referred to as the lawsuit “an affront to the First Modification” in authorized filings to dismiss this March, it has reportedly sought to settle; the corporate has a probably profitable merger pending with Hollywood studio Skydance that might require the Trump administration’s signoff.
Final week, Democratic senators Elizabeth Warren, Bernie Sanders, and Ron Wyden despatched a letter to Redstone in search of details about any potential settlement, elevating issues that it could quantity to bribery. “If Paramount officers make these concessions in a quid professional quo association to affect President Trump or different Administration officers,” they wrote, “they might be breaking the regulation.”
Talks of a possible settlement had roiled CBS for months. Longtime 60 Minutes government producer Invoice Owens abruptly resigned in April, and CBS Information president and CEO Wendy McMahon resigned earlier this month. “It’s turn out to be clear the corporate and I don’t agree on a path ahead,” she wrote in a memo to employees on the time.
Trump’s lawsuit in opposition to Paramount isn’t an remoted assault on the media. He sued ABC Information, owned by the Walt Disney Firm, for defamation in March 2024 over feedback from anchor George Stephanopoulos portraying the president as “accountable for rape.” (A federal jury discovered President Trump accountable for sexual assault in a 2023 civil case, however not rape.) The corporate settled the case in December. In late April, Trump posted feedback on his social platform Reality Social that appeared to threaten The New York Instances with the potential for authorized motion sooner or later.
The kind of lawsuit the Freedom of the Press Basis plans to file, often known as a shareholder by-product lawsuit, permits individuals and organizations who personal shares of a publicly traded firm to get better damages when executives hurt the corporate. This is identical sort of authorized motion that Tesla shareholders took to efficiently struggle CEO Elon Musk’s hefty $56 million compensation bundle, which Musk is now interesting. (Tesla additionally modified its company bylaws this month to make it tougher for traders to pursue such a lawsuit.)
Greatest recognized for its free speech advocacy for media organizations, the Freedom of the Press Basis sees this motion—which is not like any authorized problem it’s mounted earlier than—as an extension of that mission, regardless that it targets a media group.
If the Freedom of the Press Basis does search authorized motion and efficiently sues Paramount over a proposed settlement, the damages would go to Paramount quite than the nonprofit itself. “You do not count on, as advocates for press freedom, to must file lawsuits in opposition to executives of media publishers,” says Stern. “We’re a press freedom group attempting to get better cash for a media outlet from rogue executives.”