Paramount’s Big Merger Faces a Fourth Lawsuit

What’s Going On? (The Simple Version)

Imagine two giant toy companies want to combine into one super toy company. That’s kind of what Paramount (a big media company) is trying to do by buying Warner Bros. Discovery (another big media company). But not everyone is happy about it. A fourth lawsuit (a formal complaint in court) has been filed to try to stop this deal.

This new lawsuit was filed by shareholders — people who own a tiny piece of Paramount, like owning a slice of the toy company. They say the Ellisons (David Ellison and his dad Larry Ellison, a very rich tech man) made a secret, illegal deal with President Trump to get permission for the merger.

What Are the Shareholders Accusing the Ellisons Of?

The investors filed their complaint on Tuesday in a special court in Delaware. Here is what they claim happened:

• The Ellisons promised to make big changes at CNN (a news channel Paramount owns) just to get the deal approved.
• They allegedly promised up to $20 million in free advertising to Trump-friendly causes.
• They say Paramount’s old owners already paid Trump $16 million to settle a silly lawsuit he filed against CBS (another Paramount company).

Important Point: The lawsuit says 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.” That means the news channels are losing lots of viewers, and the deal could cause big legal trouble later.

Who Is Being Sued?

The lawsuit says the Ellisons broke their fiduciary duty — a fancy way of saying they had a responsibility to act in the best interest of the company, but instead created “enormous financial and legal risk” for Paramount.

• People named in the lawsuit:
  • David Ellison
  • Larry Ellison
  • Other members of Paramount’s Board of Directors (the group that helps run the company)

Others Who Don’t Want the Merger

This is not the only fight against the merger. Before this lawsuit:

1. A group of 12 state attorneys general (top lawyers for 12 states) sued.
2. The Writers Guild of America (a group for TV and movie writers) sued.
3. Paramount+ subscribers (people who pay to watch their streaming service) sued.

All of them want a court order to stop the merger.

What Does the Complaint Say About Trump’s Role?

The investors claim:

• Trump helped Paramount win the bidding war for Warner Bros. Discovery.
• He removed regulatory barriers (government rules that were in the way).
• Congress and future presidents will likely investigate Paramount, causing long-term legal problems.

CBS News Is Struggling

The complaint also mentions:

• CBS News is losing viewers fast — its lowest ratings in 25 years.
• After the Ellisons changed CBS’s coverage, many talented people left the company.
• A lawyer for the investor wrote: “After receiving regulatory approval, the Ellisons proceeded to remake CBS in the President’s image, bought properties he enjoyed, and even hosted events to honor him.”

The $16 Million Settlement and the “Side Deal”

Here is a weird timeline of events:

1. On July 1, late at night, Paramount said it would pay Trump $16 million total to settle his lawsuit about a 60 Minutes interview with Kamala Harris.
2. That same night, a reporter said there was also a “side deal” for up to $20 million of programming supporting conservative causes.
3. Paramount said it didn’t know about that side deal.
4. Trump later said he got millions in advertising from Paramount’s “new owners.”

Paramount denies the settlement included any public service announcements and says it “has no knowledge of any promises or commitments made to President Trump.”

Gifts to Government Officials

On Wednesday, a news group called ProPublica reported:

• FCC chairman Brendan Carr and commissioner Olivia Trusty got expensive gifts from Paramount.
• The gifts were tickets to the Kennedy Center Honors (a fancy TV event) worth thousands of dollars.

Why the FCC Matters

Since 2024, the FCC (Federal Communications Commission — the government team that watches TV/radio rules) has had a lot of power over Paramount.

• They approved Skydance buying Paramount and handing over broadcast licenses.
• They are now reviewing if big funds from Gulf countries can own 49.5% of the new combined company (but without voting power).

Summary

A fourth lawsuit tries to block Paramount from buying Warner Bros. Discovery. Shareholders say the Ellisons made illegal promises to Trump — like changing CNN and giving free ads — to get the merger approved. The lawsuit claims this hurts Paramount and its news channels, which are already losing viewers. Other groups (states, writers, subscribers) also sued. Paramount says it did nothing wrong and didn’t promise Trump anything. Meanwhile, government officials got gifts, and the FCC is still reviewing the deal.

FAQ

Q: What is a merger?
A: It’s when two companies join together to become one bigger company — like two lemonade stands becoming one super stand.

Q: Who are the Ellisons?
A: David Ellison is a movie/TV producer, and his father Larry Ellison is the super-rich founder of Oracle (a tech company).

Q: What does “hemorrhaging viewers” mean?
A: It means losing a lot of viewers very fast, like a sink with the faucet left open and the drain unplugged.

Q: What is the FCC?
A: The Federal Communications Commission — the government group that makes sure TV and radio follow the rules.

Q: Did Paramount admit to any wrongdoing?
A: No. Paramount said it paid the $16 million as disclosed and has no knowledge of extra promises to Trump.