Paramount’s $35M Trump Settlement Stalls Amid Bribery Fears, Threatening $8B Skydance Merger

Concerns over legal optics delay a potential resolution to Trump’s lawsuit, casting uncertainty over Shari Redstone’s high-stakes plan to sell Paramount to Skydance

Paramount Global is facing a critical impasse in its $20 billion legal standoff with former President Donald Trump, as a proposed $35 million settlement remains stalled due to internal concerns that such a payout could be interpreted as a bribe — especially with regulatory approval of its $8 billion merger with Skydance Media hanging in the balance.

Sources close to the negotiations confirmed that while both parties had recently considered settling the lawsuit for $35 million — a 30% reduction from the original $50 million demanded by Trump’s legal team — Paramount executives are wary of potential legal ramifications. According to insiders, the company’s leadership fears that proceeding with a large settlement may trigger investigations or lawsuits over perceived quid pro quo arrangements, particularly as the transaction still awaits a green light from the Trump-appointed Federal Communications Commission (FCC).

A Settlement Entangled with Bigger Stakes

Trump’s lawsuit, filed last year in Texas federal court, accuses CBS News and its flagship show 60 Minutes of intentionally manipulating a 2024 interview with then-Democratic nominee Kamala Harris to favor her image. CBS has denied the allegation, which centers around claims the network edited out Harris’ “word salad” responses to make her appear more presidential.

The lawsuit has become a roadblock in Shari Redstone’s long-standing effort to divest Paramount, the company her father Sumner Redstone built into a media empire. The proposed acquisition by David Ellison’s Skydance Media — backed by RedBird Capital — would reshape the future of Paramount’s media holdings, including CBS, but the FCC’s approval is widely perceived to be contingent upon resolving Trump’s lawsuit.

Although Trump’s representatives deny any connection between the two issues, Paramount’s legal team is increasingly anxious. Executives fear a large payout, especially under scrutiny from Trump-nominated regulators, could be interpreted as a transactional favor to secure merger approval — a scenario that might expose the company to litigation, reputational damage, or even criminal bribery charges.

Deal in Limbo, Stakes Rising

The delay is already affecting Paramount’s internal dynamics. Despite Redstone recusing herself from settlement discussions due to personal financial interests — she could gain as much as $2 billion from the merger — her management team is reportedly struggling to find a legally and publicly acceptable pathway forward.

According to sources, Paramount’s board recently countered with a much lower $15 million settlement offer — on par with the amount paid by Disney-owned ABC News to resolve a separate defamation suit filed by Trump. But Trump’s team rejected the offer outright. Negotiators have floated creative compromises, including contributions to public service announcements supporting veterans and anti-antisemitism causes favored by Trump, though these proposals have also failed to gain traction.

With Trump’s legal team now hardening its position and pushing for a higher payout, and Paramount digging in its heels over legal liability fears, the lawsuit could remain unresolved for months. The result: uncertainty looms over the Skydance deal, just as media consolidation and restructuring efforts are accelerating across the industry.

Fallout at CBS and Beyond

The political overtones of the lawsuit have created additional strain at CBS News. Sources suggest that recent executive departures — including CBS News president Wendy McMahon and longtime 60 Minutes producer Bill Owens — stemmed in part from discomfort over settling what they view as a frivolous lawsuit, simply to enable a corporate merger.

Behind the scenes, Skydance is already drafting post-acquisition restructuring plans for CBS and Paramount’s broader assets. Jeff Shell, former NBCUniversal CEO and Skydance’s pick to lead CBS, is expected to downsize operations and realign the network’s editorial direction — possibly in response to the political critiques at the heart of Trump’s lawsuit.

Political Risk Grows

Adding to the uncertainty are fears of congressional or state-level investigations. Some Democratic lawmakers have raised the possibility that a large settlement could be legally interpreted as an inducement — prompting worries at Paramount about criminal or civil liability for bribery. These risks, insiders say, are not covered by the company’s standard insurance policies.

As the months-long stalemate continues, it threatens not only Paramount’s deal-making prospects but also its leadership’s ability to steer the company out of a prolonged downturn. The once-prized media conglomerate has seen its fortunes decline amid cord-cutting, audience fragmentation, and digital disruption — a reversal that Redstone hoped to offset with the Skydance merger.

But unless the legal entanglement with Trump is resolved in a way that satisfies both legal and political standards, the deal — and Redstone’s chance at a final windfall — may slip further out of reach.