Media advocacy group Freedom of the Press Foundation has despatched a warning letter to Paramount mogul Shari Redstone, outlining plans to file a lawsuit if the media firm settles a swimsuit introduced by President Donald Trump in opposition to its subsidiary, CBS.
“Corporations that own news outlets should not be in the business of settling baseless lawsuits that clearly violate the First Amendment,” Freedom of the Press Foundation director of advocacy Seth Stern stated in a press release.
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 wasting corporate assets by engaging in conduct that US senators and others believe could amount to unlawful bribery that falls outside the scope of the business judgment rule.” The White House and Paramount didn’t instantly reply to requests for remark.
Last 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 News 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 Global has a market cap of roughly $8.5 billion.
Although Paramount beforehand referred to as the lawsuit “an affront to the First Amendment” in authorized filings to dismiss this March, it has reportedly sought to settle; the corporate has a doubtlessly profitable merger pending with Hollywood studio Skydance that might require the Trump administration’s signoff.
Last 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 will quantity to bribery. “If Paramount officials make these concessions in a quid pro quo arrangement to influence President Trump or other Administration officials,” they wrote, “they may be breaking the law.”
Talks of a possible settlement had roiled CBS for months. Longtime 60 Minutes govt producer Bill Owens abruptly resigned in April, and CBS News president and CEO Wendy McMahon resigned earlier this month. “It’s become clear the company and I do not agree on a path forward,” she wrote in a memo to workers on the time.
Trump’s lawsuit in opposition to Paramount isn’t an remoted assault on the media. He sued ABC News, owned by the Walt Disney Company, for defamation in March 2024 over feedback from anchor George Stephanopoulos portraying the president as “liable for rape.” (A federal jury discovered President Trump accountable for sexual assault in a 2023 civil case, however not rape.) The firm settled the case in December. In late April, Trump posted feedback on his social platform Truth Social that appeared to threaten The New York Times with the potential for authorized motion sooner or later.
The sort of lawsuit the Freedom of the Press Foundation plans to file, often known as a shareholder by-product lawsuit, permits folks and organizations who personal shares of a publicly traded firm to get well 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 more durable for traders to pursue this sort of lawsuit.)
Best recognized for its free speech advocacy for media organizations, the Freedom of the Press Foundation sees this motion—which is not like any authorized problem it’s mounted earlier than—as an extension of that mission, although it targets a media group.
If the Freedom of the Press Foundation does search authorized motion and efficiently sues Paramount over a proposed settlement, the damages would go to Paramount fairly than the nonprofit itself. “You don’t expect, as advocates for press freedom, to have to file lawsuits against executives of media publishers,” says Stern. “We’re a press freedom organization trying to recover money for a media outlet from rogue executives.”
https://www.wired.com/story/freedom-of-the-press-foundation-paramount-trump-settlement/