Shareholder Lawsuit Filed in Delaware: Investors claim David and Larry Ellison breached fiduciary duties by allegedly promising to overhaul CNN, provide up to $20 million in free advertising, and arrange a $16 million settlement payment to Trump — all to secure merger approval.
Paramount+ Subscribers Denied Injunction: A federal judge in Oakland, California, rejected a bid by Paramount+ subscribers to block the merger, citing a complete lack of evidence. Judge Araceli Martinez-Olguin also expressed doubts about the plaintiffs' standing to bring antitrust claims.
12 State Attorneys General Seek Restraining Order: A coalition of blue states will attempt to secure a temporary restraining order on Friday to pause the merger, arguing it will harm competition in theatrical and basic cable markets.
Writers Guild of America Joins Fight: The WGA filed a federal antitrust suit on Tuesday, adding to the growing legal pressure.
Why this matters: If the alleged side deal is proven, it could expose Paramount to enormous financial and legal risk, including potential investigations by Congress and future administrations. For consumers, the merger could reshape the streaming and media landscape.
The shareholder lawsuit, filed in Delaware Chancery Court, paints a concerning picture of how the Ellisons secured the merger. According to the complaint, the Ellisons made sweeping promises to overhaul CNN's editorial direction, offered up to $20 million in free advertising, and facilitated a $16 million settlement — paid by Paramount's previous ownership — to resolve a lawsuit Trump had filed against CBS over a *60 Minutes* interview with Kamala Harris.
The lawsuit states: *"The Ellisons' actions not only harm the reputations of the news outlets they currently own, which are hemorrhaging viewers, but they are latent liabilities waiting to be triggered by a future administration."*
Paramount has denied any knowledge of such promises, stating that the $16 million settlement terms "are those disclosed by us" in a July 1 announcement. The company also said it "has no knowledge of any promises or commitments made to President Trump."
The complaint also highlights the turmoil at CBS News, which recorded its lowest ratings in 25 years. The lawsuit alleges that Paramount's decision to reshape CBS's coverage in line with Trump's preferences has triggered a talent exodus, further damaging the network's credibility and viewership.
On Thursday, Judge Araceli Martinez-Olguin denied a preliminary injunction sought by Paramount+ subscribers who claimed the merger would lead to price hikes and reduced viewing options. The judge noted that the plaintiffs submitted "not a single item of evidence" in support of their motion.
However, the legal battle is far from over. On Friday, a coalition of 12 state attorneys general will seek a temporary restraining order, arguing that the merger will stifle competition. Paramount's lead lawyer, Jeffrey Kessler, has called the states' lawsuit "one of the weakest in modern history."
Adding to the controversy, ProPublica reported that FCC Chairman Brendan Carr and fellow Republican FCC Commissioner Olivia Trusty received pricey gifts from Paramount — tickets to the Kennedy Center Honors, which were televised by the network. The FCC has significant oversight of the studio, having approved the transfer of broadcast licenses for the Skydance-Paramount deal, and is currently reviewing a request to allow Gulf sovereign wealth funds to own a 49.5% stake in the combined company.
What is the $16 million settlement about?
Paramount Global agreed to pay $16 million to settle a lawsuit from President Trump, who sued over a *60 Minutes* interview with Kamala Harris. The company denies any side deal beyond this amount.
Who are the main parties trying to block the merger?
A coalition of 12 state attorneys general, the Writers Guild of America, Paramount+ subscribers, and now shareholders have all filed lawsuits seeking to block or pause the $111 billion merger.
What happens if the merger is blocked?
If successful, the legal challenges could unwind the deal entirely, leaving Paramount and Warner Bros. Discovery as separate entities. This could affect streaming services, content production, and pricing for consumers.
How does this affect CNN?
The lawsuit alleges that the Ellisons promised to overhaul CNN as part of the deal. CNN's editorial independence and future direction are central to the controversy.
Who this affects most: Media consumers, Paramount+ and Warner Bros. Discovery subscribers, CBS and CNN viewers, and employees across the merged companies.
How to stay informed: Follow court rulings in Delaware Chancery Court and the Oakland federal court, where the state attorneys general case is being heard.
What to watch for: The Friday hearing for the states' temporary restraining order will be a key indicator of whether the merger proceeds or faces significant delays.
Key takeaway: The merger's fate now hinges on multiple legal battles — from shareholder claims of improper dealings with the President to antitrust concerns from state regulators. The outcome could reshape the media industry for years to come.
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