Media giant Paramount Global (PARA) has finally settled the looming lawsuit with U.S. President Donald Trump for $16 million. The two parties agreed to the settlement yesterday after a month-long negotiation over the settlement amount. The closure of the Trump lawsuit also paves the way for the long-pending merger with Skydance Media. PARA stock gained 2% following news of the settlement.
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The settlement includes payments to Trump’s future presidential library and coverage of legal fees. Additionally, Paramount has agreed to release transcripts of interviews with presidential candidates in the future. Despite agreeing to settle the lawsuit, CBS News has maintained its position that the broadcast was not “doctored or deceitful.”
Paramount and Trump Settle Lawsuit
In October 2024, Trump sued Paramount’s CBS News, alleging that it wrongfully edited a “60 Minutes” interview with presidential candidate Kamala Harris to portray her as a stronger candidate. The lawsuit sought $20 billion in damages.
Recently, the two parties were close to settling for $35 million when, at the last minute, Trump’s lawyers pivoted back to their original demand of $50 million. For Paramount, a major point of consideration in determining the settlement amount was to prevent any potential class action lawsuits or criminal charges against its executives and board for bribing a public official, and to minimize liability.
The Paramount-Skydance Merger Is on the Horizon
The merger is currently under review by Federal Communications Commission (FCC) Chairman Brendan Carr, who was appointed by President Trump. Notably, Carr has previously stated that a third-party complaint alleging news distortion in the interview’s editing could hinder approval of the merger. Therefore, settling the lawsuit was an important step towards removing an obstacle to the merger’s approval.
Carr is reviewing how CBS News handled the interview edit and the related complaint. He also requested the release of the full transcript and raw footage of the interview for verification, which CBS News has provided. The FCC’s role in approving the Skydance merger is significant, as it involves the transfer of broadcast TV licenses held by CBS.
Is Paramount Stock a Good Buy?
On TipRanks, PARA stock has a Hold consensus rating based on two Buys, seven Holds, and five Sell ratings. Also, the average Paramount Global price target of $12.09 implies 8.1% downside potential from current levels. Year-to-date, PARA stock has gained 26.9%.
