Paramount’s Legal and Regulatory Crossroads: Can the CBS-Trump Lawsuit Derail the Skydance Deal?

The mediation between Paramount Global (owner of CBS) and Donald Trump over his $20 billion lawsuit has become a high-stakes test of corporate resilience, regulatory patience, and shareholder resolve. With Paramount’s $8 billion sale to Skydance Media hanging in the balance, the outcome of this politically charged legal battle could reshape the media landscape—and investor returns—more than any courtroom ruling.

The lawsuit, filed in October 2024, alleges that CBS deceptively edited a 60 Minutes interview with then-Vice President Kamala Harris to sway the 2024 election. Trump’s team claims the edits violated Texas consumer protection laws and the federal Lanham Act, demanding $20 billion in damages—a figure critics call “a political stunt” rather than a credible legal claim. Yet for Paramount, the case is no laughing matter: its pending merger with Skydance Media requires Federal Communications Commission (FCC) approval, and the agency has tied that decision to the lawsuit’s resolution.

The Legal Stakes
Paramount’s board has privately acknowledged the need to settle, even if Trump’s case lacks merit. On April 18, 2025, the board outlined parameters for a potential settlement, though dollar figures remain undisclosed. The company’s controlling shareholder, Shari Redstone, has pushed for compromise to secure the Skydance deal, which would net her family $1.75 billion. But internal dissent is mounting. 60 Minutes executive producer Bill Owens resigned in late April, citing “corporate pressure” and fears of compromised editorial independence. Veteran correspondent Scott Pelley echoed these concerns, noting heightened oversight linked to Paramount’s desire to appease Trump.

The FCC’s role looms largest. Chairman Brendan Carr—a Trump appointee—has explicitly tied the merger’s approval to the lawsuit’s resolution. He has also revived a conservative group’s complaint about the Harris interview under rarely enforced “news distortion” policies, adding further regulatory hurdles.

Regulatory Hurdles
The FCC’s review has already delayed the merger’s closing deadline twice. Originally set for April 7, 2025, it was extended to July 7, with a potential second 90-day extension possible. A key sticking point is Paramount’s adherence to FCC demands on diversity, equity, and inclusion (DEI) policies, which Carr has labeled “invidious.” The company scaled back DEI initiatives in February 2025 to comply, but the agency now seeks stricter guarantees.

The merger’s fate also hinges on whether Paramount can satisfy the FCC while avoiding a costly settlement. Legal experts estimate Trump’s case has less than a 10% chance of success in court, given First Amendment protections. Yet a settlement—potentially in the hundreds of millions—could placate Carr and fast-track regulatory approval.

Corporate Fallout
The internal strife at CBS underscores the high cost of appeasing political pressures. Susan Zirinsky’s appointment as an “interim executive editor” signals corporate efforts to address “bias” claims—a move critics call a surrender of journalistic autonomy. Meanwhile, the New York Times reported in April 2025 that Trump’s legal team threatened the outlet with a $5 billion lawsuit for “tortious interference” over its coverage of the case, a claim the Times dismissed as baseless intimidation.

Investment Implications
For investors, the calculus is stark. Paramount’s stock has underperformed peers since the lawsuit’s announcement, down 18% year-to-date as of May 2025. The merger’s collapse would likely trigger a further 25–30% decline, given the company’s reliance on Skydance’s cash infusion. Conversely, a swift settlement could stabilize the stock, though a $200–300 million payout would eat into Paramount’s 2025 net income (projected at $1.8 billion).

The FCC’s timeline is critical. If the merger clears regulatory hurdles by October 2025—the latest possible deadline—shareholders might see a 10–15% rebound. However, prolonged delays could invite activist investors to challenge Redstone’s leadership, as her family’s control (via National Amusements) faces scrutiny for prioritizing personal gains over broader stakeholder interests.

Conclusion: A High-Risk Gamble with Narrow Odds
Paramount’s path forward is narrow but navigable. A settlement in the low hundreds of millions—far below Trump’s $20 billion demand—could satisfy the FCC while avoiding shareholder backlash. The merger’s $8 billion price tag implies a 4.3x revenue multiple, a discount reflecting current risks. However, the FCC’s politicized stance and CBS’s internal fractures add layers of uncertainty.

Investors should prepare for volatility. If the merger closes by October 2025, Paramount’s stock could rebound to pre-lawsuit levels ($25–$30 range). If not, a worst-case scenario—$500 million in legal costs plus regulatory fines—could slash the company’s market cap by 40%. For now, the stakes are clear: Paramount’s future hinges not just on winning a lawsuit but on surviving a political and regulatory gauntlet.