President Donald Trump claimed yesterday on his Truth Social (DJT) platform that Paramount Global’s (PARA) new owner, Skydance Media, will pay an additional $20 million in public service announcements (PSAs) as part of his recently settled lawsuit against CBS’ 60 Minutes. In response to Trump’s post, Paramount issued a statement that the settlement did not include any such PSAs and that it has no knowledge of any promises or commitments made to the president in this regard.
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On July 1, the two parties agreed to a settlement amount of $16 million to be paid toward Trump’s future presidential library and legal fees. Trump also confirmed receipt of the $16 million payment in his post, calling it a “BIG AND IMPORTANT WIN in our Historic Lawsuit against 60 Minutes, CBS, and Paramount.” Additionally, he declared that major media networks were officially “ON NOTICE” and vowed to hold “Fake News Media” accountable.
Why Is Trump Claiming a $36M Settlement?
Trump is now stating that the total value of his settlement is $36 million, which includes the $16 million cash payment and an additional $20 million in PSAs, expected after the closure of the Skydance-Paramount merger.
On July 2, a report by the New York Post suggested that Skydance’s CEO David Ellison had reached a “secret side deal” with Trump to run up to $20 million in PSAs to promote conservative causes supported by the president.
Ellison is the son of Oracle (ORCL) co-founder Larry Ellison and has been a supporter of Trump during the campaign. While Trump may be referencing this alleged side agreement, Paramount maintains it has no knowledge of such an arrangement.
Paramount is facing challenges from declining revenues in legacy TV channels, pressure on digital advertising, and ongoing streaming losses. This new claim intensifies the pressure on the already struggling media giant.
Skydance-Paramount Merger Awaits FCC Approval
Paramount’s long-pending merger with Skydance is awaiting approval from the Federal Communications Commission (FCC), whose Chairman Brendan Carr is currently reviewing the deal.
According to the agreement, Skydance would acquire National Amusements, the controlling stakeholder in Paramount. After the merger, Ellison will become Paramount’s new CEO.
Ellison has shown a keen interest in facilitating the merger. As part of the FCC review process, he met with Carr and other senior officials. Regulatory filings note that Skydance has committed to “unbiased journalism and its embrace of diverse viewpoints, principles that will ensure CBS’s editorial decision-making reflects the varied ideological perspectives of American viewers.”
Is Paramount Stock Worth Buying?
On TipRanks, PARA stock has a Moderate Sell consensus rating based on two Buys, seven Holds, and six Sell ratings. Also, the average Paramount Global price target of $11.92 implies 9.1% downside potential from current levels. Year-to-date, PARA stock has gained 26.4%.
