Paramount’s settlement with 12 state attorneys general includes the creation of a five-person board charged with protecting CNN and CBS News from influence by their owners and shareholders.
But how effective can it be when Paramount’s own directors choose all five members?
The structure — and the objections that cropped up in reaction — adds scrutiny to the editorial-independence protections that helped clear the final major legal hurdle for Paramount’s $110 billion acquisition of Warner Bros. Discovery. Those concerns come as sovereign wealth funds tied to Saudi Arabia, Qatar and Abu Dhabi are set to contribute $24 billion toward the transaction and will hold 38.5% of the combined company’s non-voting equity — giving them significant economic stakes but no voting or governance rights.
Concerns over press freedom have also intensified after President Donald Trump barred CNN, MS NOW and Politico from the White House. A coalition of more than 100 journalists, rights organizations, academics and advocates has called on Ellison to condemn the ban and commit to backing CNN’s legal challenge if Paramount acquires the network.
Questions about editorial independence have followed Ellison’s stewardship of CBS News and his relationship with Trump, who has publicly touted his ties to the Ellison family. Ellison named Bari Weiss CBS News editor-in-chief last year, and her tenure has brought sweeping changes to the news organization, including an overhaul at “60 Minutes” that just had a bumpy season premiere.
It’s why critics were surprised California Attorney General Rob Bonta and the other AGs didn’t ask for more explicit protections.
“We already have a canary in the coal mine with CBS News — why weren’t they more aggressive about CNN?” said J. Christopher Hamilton, an entertainment attorney and professor at Syracuse’s Newhouse School of Public Communications.
Will the board have teeth?
Under the settlement, the News Editorial Independence Board will monitor CNN and CBS News for adherence to journalistic standards and “editorial independence, including from the Combined Entity’s ownership and shareholders.”
Its five members must be active or retired journalists with at least 10 years of experience. Paramount officers, directors, shareholders and non-journalist employees or contractors cannot serve, and no more than two members can be affiliated with the same political party.
Members are expected to serve three-year terms and can be removed by Paramount’s board only for good cause. The panel will establish editorial principles based on CNN and CBS News’ existing standards and practices and resolve certain disputes between newsroom employees and management, reporting to Paramount’s corporate board through the company’s chief compliance officer.
Jane Kirtley, a media-law professor emerita at the University of Minnesota and former executive director of the Reporters Committee for Freedom of the Press, said the appointment structure raises questions about how independent the panel will be in practice.
“The ‘Editorial Independence Board’ is appointed by Ellison’s own board of directors, so it’s not clear just how independent these folks will be,” Kirtley told TheWrap.
Kirtley said she would also be wary of government officials such as state attorneys general making the appointments, and questioned how effective any outside body tasked with reviewing journalists’ work could be.
“Whether that will lead to any meaningful oversight, I cannot say,” she said.
A Paramount spokesperson did not respond to a request for comment
The foreign investor factor
The board’s mandate also intersects with the deal’s unusual financing. Saudi Arabia’s Public Investment Fund is set to contribute $10 billion, while the Qatar Investment Authority and Abu Dhabi’s L’imad Holding Company will each contribute $7 billion to the overall acquisition of Warner Bros. Discovery. The FCC approved the foreign investment structure last week, allowing foreign investors to collectively hold as much as 49.5% of the combined company.
Those investments come with important restrictions. The Ellison family and RedBird Capital will hold 100% of the combined company’s voting shares, with no other equity participant receiving governance rights. The FCC also said the foreign investors will not be permitted to exercise “influence, direction, or control” over Paramount’s content decisions or company management, or provide commentary or guidance on those decisions.
But just how effective those guardrails will be in practice remains to be seen, and the onus will be on the editorial board. Indeed, the distinction between economic ownership and corporate control is highlighted by the settlement’s explicit mandate that the new panel guard against influence from “shareholders.”
The board, however, won’t be in place immediately.
Bad timing
Paramount has up to 180 days after the Warner Bros. Discovery acquisition closes to establish the editorial board. CEO David Ellison told employees Monday that the company expects the transaction to close in approximately two weeks, meaning CNN and CBS News could operate under their new common ownership for months before the panel is in place.
Kirtley said she was “not terribly troubled” by the 180-day period, noting that implementation windows of that length are common in settlements and in government implementation of laws.
Seth Stern, chief of advocacy at the Freedom of the Press Foundation, which criticized the editorial-independence provisions Monday, took a different view. He argued that “a lot of harm can be done during that time” before the editorial board is established.
Other compliance mechanisms take effect sooner. Paramount must appoint an internal compliance monitor within 21 days of closing, while the company and a committee representing the states will jointly select an independent monitoring trustee within 90 days.
The decree, however, expressly excludes the section establishing the News Editorial Independence Board from the independent trustee’s monitoring responsibilities. The internal compliance monitor will be an employee or officer of the combined company who reports directly to its chief compliance officer.
Stern also pointed to the Ellison family’s voting control and David Ellison’s roles as chairman and CEO, arguing that Paramount’s directors are “unlikely to appoint editorial board members who will meaningfully push back” against the family.
The editorial board emerged as a compromise after at least one state pushed for a far more sweeping remedy. Connecticut Attorney General William Tong said Monday that his state demanded the full divestiture of CNN and CBS News during negotiations.
“Connecticut wanted and demanded full divestiture of CNN and CBS News,” Tong said. “We wanted to save ethical and independent journalism and news. We fought aggressively for that remedy. I am deeply disappointed that we could not do more.”
The settlement instead allows Paramount to retain both news organizations while imposing editorial safeguards that will have to operate independently within the ownership structure they were created to monitor.
