House Dems. probe Paramount-Skydance merger over possible 'illegal bribe' paid to Trump - CNBC

House Democrats Jamie Raskin and Frank Pallone are investigating potential improper pressures from Donald Trump regarding the approval of the $8 billion merger between Paramount and Skydance Media, raising concerns about a $16 million settlement that may have influenced FCC decisions.

The lawmakers suggest that the settlement and Trump's demand for an additional $20 million in advertising could constitute unlawful bribery, as they believe it was contingent upon the FCC’s approval of the merger rather than serving any public interest.

Raskin and Pallone have expressed that the companies' acquiescence to Trump's claims reflects a disregard for ethical standards and potentially violates anti-bribery laws, prompting them to request internal documents from Paramount related to communications with Trump and the FCC.

The situation has garnered media attention, with CBS's cancellation of "The Late Show with Stephen Colbert" following his comments characterizing the settlement as a bribe, indicating possible internal dissent at the network.

Investigation of Alleged Illegitimate Demands in Paramount and Skydance Merger

Two prominent House Democrats are delving into potential improper pressures from former President Donald Trump concerning the approval of the $8 billion merger between Paramount and Skydance Media. This investigation is reportedly based on a joint letter issued by Representatives Jamie Raskin of Maryland and Frank Pallone of New Jersey, highlighting concerns raised in a recent CNBC report.

In their correspondence addressed to David Ellison, the newly appointed CEO of Paramount Skydance Corporation (NASDAQ:PSKY), Raskin and Pallone emphasized, "Two wrongs do not make a right." They contend that any perceived demands from either the Federal Communications Commission (FCC) or the Trump Administration do not exempt the companies from possible malfeasance.

The merger, which had faced a nearly year-long delay, received clearance shortly after Paramount agreed to a $16 million settlement in a lawsuit initiated by Trump. This lawsuit revolved around allegations that a CBS interview with then-Vice President Kamala Harris was misleadingly edited to favor the Democratic Party during the previous presidential campaign.

The lawmakers raised alarming questions regarding the nature of the settlement, suggesting it could constitute an unlawful bribe—specifically, the $16 million payment made to Trump in return for the FCC's endorsement of the merger. They articulated their concern in the letter: “For both Paramount and Skydance to acquiesce to President Trump’s meritless claims in order to consummate the merger demonstrates an extreme disregard for anything that might stand in the way of profit."

According to Raskin and Pallone, this collaboration with Trump potentially violates several anti-bribery and corruption clauses that the companies filed with the FCC.

Moreover, they referenced Trump's expectation of receiving an additional $20 million in "advertising, PSAs, or similar programming" from the new owners of Paramount. They argued that such a side agreement "was necessarily contingent on the FCC approving the deal and does not appear to present any legitimate value to the public, only to President Trump." This situation raises serious ethical questions, with the lawmakers equating it to "an offer of payment and benefits to a government official designed to achieve a specific outcome from the government—in other words, a bribe."

Adding to the discourse, the representatives highlighted CBS's recent decision to cancel "The Late Show with Stephen Colbert," given Colbert's characterization of the settlement as a "big fat bribe," which could suggest broader discontent within the network regarding the matter.

The representatives have given Paramount a two-week deadline to address their inquiries and to submit relevant internal documents and communications linked to Trump, the White House, the FCC, and the Trump Organization.

In unrelated market developments, shares of PSKY experienced a notable increase of 14.6% by Thursday afternoon.