Something is rotten in the FCC

Paramount gave in to Trump. What they get in exchange might not be what they expect

FCC Chairman Brendan Carr (Graeme Sloan/Sipa USA)(Sipa via AP Images)

Today, the Federal Communications Commission (FCC) approved the proposed merger between Paramount Global and Skydance Media, a decision that has surprised few and alarmed many.

FCC Chairman Brendan Carr said in a statement:

It is time for a change. That is why I welcome Skydance’s commitment to make significant changes at the once storied CBS broadcast network. In particular, Skydance has made written commitments to ensure that the new company’s programming embodies a diversity of viewpoints from across the political and ideological spectrum. Skydance will also adopt measures that can root out the bias that has undermined trust in the national news media.

The FCC’s actions in the Paramount-Skydance matter are a study in how the Trump administration has weaponized federal power. By using the considerable regulatory powers of the FCC (and also claiming some new ones) to punish perceived enemies and compel obedience to the administration’s policies, the FCC is executing a play straight from the authoritarian playbook — eliminating dissent and disabling institutions of our civil society that hold power to account.

What should have been a mundane matter of regulatory review instead became a showdown between Trump’s FCC, corporate media, and principled journalists struggling to maintain a free press. The episode has seen the departure of veteran news editors, the cancellation of The Late Show with Stephen Colbert, inquiries from federal and state officials around potential criminal implications, accusations of bribery, and millions of dollars paid into the president’s shadowy “presidential library fund.”

No doubt the boards of Paramount and Skydance are hoping this saga ends today — now that they’ve appeased the FCC and cleared merger review. But as we’ve seen time and again, businesses that capitulate to the Trump administration find themselves captured rather than in the clear — with the president quick to change his mind and come back for more.

The broader context: a weaponized FCC and “a big fat bribe”?

This story begins innocently enough — with a routine interview. In October 2024, then-presidential candidate Kamala Harris gave an interview to CBS’s flagship news magazine, 60 Minutes, in the final months of the election. CBS, which is owned by Paramount, edited the interview as is customary in journalism (and, by the way, protected by the First Amendment according to the Supreme Court).

But then-candidate Donald Trump was outraged at this bit of routine journalism, claiming that CBS cast Harris in a favorable light and this constituted “election interference.” He filed a lawsuit against Paramount and CBS, asking for $10 billion in damages. (He would later up it to $20 billion).

At the time, Trump’s lawsuit was considered a desperate piece of lawfare, unlikely to go anywhere. His claims were frivolous; CBS’s First Amendment right to choose what portions of an interview to publish is firmly established. And that may have been the end of the story — had Trump not won the election and had Carr not been elevated to the chairmanship of the FCC.

The FCC is supposed to be an independent agency, charged with regulating the communications industry free from direct presidential control. Carr — who previously had a reputation in Washington as a serious regulator who valued bipartisan consensus — quickly got to work using the FCC’s considerable regulatory powers to attack President Trump’s perceived enemies and advance presidential priorities unrelated to telecommunications.

Carr reopened previously dismissed complaints against ABC, NBC, and CBS —the latter of which was decried by a bipartisan group of former FCC commissioners as a “remarkable departure” from the agency’s historical practice in both procedure and substance. He launched an investigation into a California radio station (owned by George Soros-backed Audacy) because it covered an ICE raid; threatened PBS and NPR with investigation over their underwriting announcements; and demanded information from Comcast, NBCUniversal, Disney, and ABC related to their DEI programs.

All of these actions target entities the president or his advisors have publicly attacked. And all raise serious questions under both the First Amendment and the statutory limits on the FCC’s powers.

At the same time, Carr also began to use the FCC’s merger review authority to extract concessions from companies that needed the agency’s approval to transfer broadcast licenses. In May, the FCC openly touted that it approved a merger between Verizon and Frontier Communications only after Verizon agreed to scrap its DEI programs in conformity with the president’s policy agenda.

It thus came as no surprise that the FCC appeared to be holding up the Paramount-Skydance merger to pressure CBS to settle Trump’s lawsuit. Federal and state lawmakers raised concerns that offering a monetary settlement in exchange for favorable regulatory review could constitute a bribe. A Paramount shareholder threatened a derivative suit. Paramount retained outside counsel to advise on the liability it might be exposing itself to. Nevertheless, in July, Paramount announced that it was going to settle President Trump’s lawsuit — a lawsuit CBS vehemently argued in court was frivolous — for $16 million.

In so doing, Paramount probably imagined that it was making a reasonable business calculation. The company — and the chair of the board personally — stood to make billions from the merger with Skydance. The FCC would get out of the way if they’d simply pay $16 million to the president’s library slush fund. To Paramount, the cost of the merger just went up $16 million, but with billions on the table, it was still a good deal to make. Who cares if the settlement looks like, as CBS’s erstwhile late night host Stephen Colbert put it, “a big fat bribe”?

Why this isn’t over for Paramount

But as experts who study authoritarian behavior have warned, and as we have already seen in the case of the law firms and universities that have capitulated to the president, these bargains with the administration are less like legal settlements, which finally resolve a dispute with mutually agreed upon terms, and more like protection rackets, where the dominant party demands regular tribute in exchange for its forbearance — where the mob keeps coming around.

Read more: A natural experiment in how to survive Trumpism.

Paramount is already experiencing this steady inflation in their settlement with the president. Trump maintains that Paramount owes him $16 to $19 million in free advertising, in addition to the $16 million in cash paid to his library fund. Skydance’s CEO agrees, saying that the company will provide millions in public service announcements that “support conservative causes supported by President Trump.” Skydance has also revealed that it has met with Chairman Carr to assure him that CBS’s editorial decision-making will “reflect[] the varied ideological perspectives of American viewers.” It’s hard not to see this as evidence that Paramount’s agreement is further entangling the company with the administration, rather than freeing the company from the administration's oversight.

This mirrors the dynamic in the “settlements” between Trump and law firms, which the president has unilaterally changed, and the previous experience of Columbia University, whose capitulation failed to buy it lasting favor with the administration (it remains to be seen whether the university’s recent major concession will succeed).

Read more: Universities have no choice.

The lesson here is that the costs of capitulation are higher than they might initially seem, and the business calculation that Paramount and many others have made may be wrong. The price of protection only goes up, and the mob keeps coming around.

The settling law firms have learned that many clients (like Microsoft) would rather hire attorneys willing to defend their rights than those under the administration’s thumb. The same idea applies to media companies. As a former FCC official recently wrote, Paramount’s capitulation will make it “harder and more expensive” for the company to win projects if producers, directors, writers, and actors can’t trust management to stand by their programs in the face of controversy. So even putting aside the risk of bribery charges and shareholder derivative suits, Paramount’s decision to cave seems short-sighted, to say the least.

Our colleagues have written before about how the divide and rule strategy is at the heart of the authoritarian playbook and the only effective response is a collective response. This is no less true for corporations whose primary concern is their individual bottom lines. The only question is when they will realize it.