Paramount Global/Skydance merger - Variety: Trump Payout Just the Latest – and Most Blatant – Political Interference at FCC: ‘Sad That It’s Come to This’

Story from Variety:

The controlling owner of Paramount Global, Shari Redstone, delivered a commencement speech at Boston University last year on the theme of “moral leadership.”

“Too many leaders are unwilling to take a stand, even when they know what is right,” she said. “To be a true moral leader, you must be willing to take a stand.”

A year later, Paramount settled with President Trump, agreeing to pay $16 million to end a lawsuit over a “60 Minutes” interview. At CBS – and in newsrooms around the country – the deal was seen as a shameful capitulation.

But among those who deal regularly with the Federal Communications Commission – and who are used to what they see as arbitrary power – the deal was largely seen as the price of doing business.

“On one hand, I’m quite disappointed,” says Jerald Fritz, a longtime FCC insider. “On the other hand, I get the business decision that Shari had to make. It’s philosophy versus reality.”

Redstone needs the FCC’s blessing to close her $8 billion sale to Skydance Media. The FCC has not been shy about killing transactions simply by doing nothing, and frustrated companies have found that such action – or inaction – is effectively unreviewable in the courts.

The settlement is thus dispiriting but not surprising, says a retired CBS executive, who asked not to be named to protect relationships.

“Shari needed to get out of it,” the exec says. “And if this is in the way, then $16 million is a rounding error in the greater scheme of the deal.”

Formally, the FCC has no fingerprints on the transaction. Brendan Carr, the Trump-appointed chairman, reopened a “news distortion” complaint over the “60 Minutes” interview, invited public comment on it, and suggested it might be considered in the course of the merger approval.

But it would be hard to make a constitutional claim out of that. In his defense, Carr has said the case is no different than the way a Fox station in Philadelphia was treated under Jessica Rosenworcel, his Biden-appointed predecessor. She used a license renewal process to solicit comment on Fox News’ coverage of Trump’s election denial. Liberal groups have also asked to investigate broadcasters that carried Trump’s claims regarding COVID treatments.

Advocates for free speech like to quote Justice Stephen Breyer: “The FCC works in the shadow of the First Amendment.” But he wrote that in dissent, in a case upholding the FCC’s power to regulate expletives on the airwaves.

In reality, the agency has been subject to political agendas for 80 years – though this may mark a new low. 

“History is replete with government stepping in and trying to control content,” Fritz says. “Has it been this blatant? No. I don’t recall anything in the history of the FCC where it has been this blatant.”

President Reagan moved to curtail content regulation at the FCC. His chairman, Mark Fowler, repealed the fairness doctrine, which required broadcasters to give opposing views on controversial topics.

Fowler believed then, and still believes, that the government should not meddle with broadcasters’ expression. He said he was disappointed in Carr’s handling of the “60 Minutes” case.

“I know Brendan Carr well enough to know that he knows better,” Fowler says. “It looks like it’s corrupt – and I say that as a Trump donor and supporter. This is exceedingly disappointing… They’re trying to undo everything President Reagan did.”

-In February, Trump issued an executive order bringing the FCC and other agencies under White House control – giving Trump even greater power over regulated companies.

Ironically, when Carr is not investigating media outlets that get crosswise with the president, he is pursuing a traditional deregulatory agenda. And broadcasters, who are struggling to compete with globe-spanning tech platforms, have every incentive to cheer him on.

They see a golden opportunity to eliminate the ownership caps that have prevented station groups from consolidating. They are also hopeful that a new transmission standard will allow them to rent excess spectrum, opening up a revenue stream.

“Broadcasters are salivating at the opportunities on the horizon if that gets done,” Fritz says.

The industry’s priorities are reflected in an 81-page comment letter submitted by the National Association of Broadcasters in April. The first 13 pages pushed repeal of the ownership rules. A three-paragraph plea to eliminate the news distortion policy – calling it unconstitutional – was tucked on p. 78.

“They don’t really care too much about the First Amendment or other things like that,” Fowler says. “Those are not dollar-impact issues.”

But from the FCC standpoint, many are dismayed by what they see as an abuse of power.

“It’s very sad that it’s come to this,” says Clay Calvert, a non-resident senior fellow at the American Enterprise Institute. “The use of government regulatory power to serve the personal interests of the president in litigation – it’s rather disturbing.”

Fowler agrees.

“The law doesn’t seem to matter,” he says. “It feels a bit like the wheels are coming off.”