FCC pressures Paramount to limit DEI for Skydance merger approval

Paramount’s merger with Skydance Media faces FCC scrutiny amid DEI policy concerns and Trump lawsuit.

A view of the Paramount Global headquarters in New York, on August 27, 2024. Photo by Yuki Iwamura/Bloomberg

By Anna Fadiah and Hayu Andini

The Federal Communications Commission has entered discussions with Paramount Global regarding its proposed merger with Skydance Media, raising new concerns about the company's diversity practices as part of the approval process. The FCC Paramount Skydance merger—a high-profile media deal that has stalled for months—is now facing scrutiny not just for antitrust or market implications, but for its stance on corporate social policies.

People familiar with the matter say one of the agency’s considerations is a potential agreement by Paramount to limit or end certain diversity, equity, and inclusion (DEI) initiatives. This condition appears to align with FCC Chairman Brendan Carr’s broader push to curb DEI policies within the media and telecommunications sectors. Carr has made it increasingly clear that companies seeking merger approval under his watch may need to demonstrate a shift away from these internal programs.

Political backdrop complicates merger landscape

The Paramount Skydance deal enters a politically fraught atmosphere. Paramount is currently embroiled in a separate $20 billion lawsuit filed by Donald Trump over CBS News’ coverage of Kamala Harris during the 2024 election. The former president alleges that the network manipulated an interview in Harris’s favor, giving her a political edge.

This lawsuit is running parallel to the FCC's evaluation of the Paramount Skydance merger and has added another layer of complexity. The merger, if approved, would involve the transfer of key broadcast licenses, including those held by CBS, requiring direct FCC oversight.

Although Carr has said the lawsuit and merger review are distinct matters, insiders suggest that Trump’s legal actions—and his vocal criticisms of CBS—have influenced the tone and trajectory of the FCC's internal conversations.

Paramount’s dual-track strategy: settle the lawsuit, secure the merger

Shari Redstone, Paramount's nonexecutive chair and controlling shareholder, has been at the center of both the legal and regulatory maelstrom. Redstone has advocated for a settlement with Trump in hopes that doing so might remove obstacles to the FCC Paramount Skydance merger. Sources indicate that she views a swift resolution to the legal battle as a prerequisite for merger approval, especially given Trump’s continued influence over Republican-appointed regulators.

However, not all Paramount executives share Redstone’s view. Some insiders worry that any settlement—particularly one that includes a public apology or financial payout—could be interpreted as an improper influence attempt. These concerns are especially sensitive given that Paramount is a licensee under FCC jurisdiction. A misstep could not only derail the merger but expose the company to legal jeopardy.

The stakes escalated last October when Trump filed the initial lawsuit, seeking $10 billion in damages. That amount was doubled to $20 billion in an amended filing in February. Mediation talks are now scheduled to begin next week.

Internal dissent and editorial shake-up

As merger talks with Skydance unfold, the fallout within CBS News continues to ripple. Earlier this week, “60 Minutes” Executive Producer Bill Owens announced his resignation, citing a loss of editorial independence. While Owens did not explicitly tie his departure to the Trump lawsuit or merger review, colleagues say the decision came after sustained internal tensions over political coverage and corporate priorities.

Redstone has reportedly expressed frustration with how some CBS News segments have been produced, including those on “60 Minutes.” She has become increasingly outspoken about the need for journalistic recalibration—though it remains unclear whether that aligns with broader editorial sentiment inside the network.

Many at CBS News remain resistant to settling with Trump, especially if doing so compromises journalistic autonomy or results in public concessions. Some also fear the precedent it could set for political figures attempting to influence newsrooms through legal and regulatory pressure.

Lobbying, leverage, and connections to Trump

Meanwhile, Paramount has bolstered its political outreach. Earlier this year, the company retained Florida lobbyist Brian Ballard, a longtime Trump ally and key fundraiser. Federal filings show that Ballard has received at least $90,000 from Paramount so far. He played a crucial role in raising more than $50 million for Trump’s 2024 re-election campaign, suggesting close alignment with the former president’s inner circle.

Skydance, the other party in the deal, is owned by David Ellison, son of Oracle co-founder Larry Ellison—another prominent Trump supporter. These affiliations could provide political capital as the deal moves through regulatory review, especially under a Trump-friendly FCC majority.

Still, it remains to be seen whether such connections will be enough to satisfy agency concerns, particularly if diversity policy rollbacks are viewed as politically motivated or legally problematic.

FCC’s evolving role under Carr

Chairman Carr’s push to reshape the agency’s oversight role has extended beyond typical telecom regulations. His public skepticism toward DEI programs and his emphasis on media accountability have introduced a new rubric for evaluating mergers. In January, he suggested that companies embracing “ideological orthodoxy” should not assume their transactions will receive rubber-stamp approval.

His position has drawn praise from some conservative lawmakers and advocacy groups but raised alarms among civil rights organizations. Critics argue that conditioning merger approval on internal diversity policies represents a troubling intrusion into corporate governance and a potential First Amendment overreach.

Paramount’s internal legal team is reportedly evaluating how far they can go to accommodate the FCC without exposing the company to lawsuits or reputational damage. The company must navigate a treacherous path—one where political optics, regulatory demands, and shareholder expectations collide.

What’s next for the Paramount Skydance merger?

The FCC Paramount Skydance merger remains in limbo. The agency’s demand signals a more ideological and less predictable regulatory process, complicating Paramount’s strategic calculus. Settlement talks with Trump are imminent, but any agreement will be closely scrutinized—by regulators, the press, and public interest groups.

For now, all eyes are on the mediation room and the FCC’s next move. Whether Paramount can successfully thread the needle—securing merger approval while maintaining corporate integrity—will likely define its future in the post-Biden media landscape.