Is “Pay-For-Play” Here to Stay? The Troubling Regulatory Implications of the Paramount-Skydance Merger
On July 24, the Federal Communications Commission (FCC) approved the $8 billion-valued merger of Paramount with the Hollywood studio Skydance, which settled one of the most contentious major media deals in years.
Skydance was formed in 2006 by David Ellison, son of American tech entrepreneur Larry Ellison. With popular movies like Top Gun: Maverick and the Mission: Impossible trilogy, Skydance has had enormous success in both the film and television industries. However, Paramount has struggled in recent times, particularly in streaming, posting a $286 million quarterly streaming loss at the end of 2024.
According to Alex Weprin in the Hollywood Reporter, “A key thesis behind the merger was plans by Ellison to expand Paramount’s technological capabilities. This includes improving recommendation engines through artificial intelligence so subscribers spend more time on the platform, upgrading advertising technology to give marketers more reach and information, and the unification of cloud providers to slash costs.”
Accusations of censorship and “pay-for-play”
But underlying the financial and technological benefits of this merger for Paramount has been an increasingly brewing controversy over what appear to be concessions made by it to the Trump Administration and the FCC to adjust content and business practices strictly to their demands.
In a statement, Republican FCC chairman Brendan Carr said the agency had authorized the acquisition after Skydance's promises that the new firm will be dedicated to objective journalism and refrain from establishing diversity, equity, and inclusion (DEI) programs. “Americans no longer trust the legacy national news media to report fully, accurately, and fairly. It is time for a change,” Carr said. “Today’s decision also marks another step forward in the FCC’s efforts to eliminate invidious forms of DEI discrimination.”
However, in a statement from Democratic FCC commissioner Anna M. Gomez, the FCC utilized "its vast power to pressure Paramount…after months of cowardly capitulation to this Administration, Paramount finally got what it wanted. Unfortunately, it is the American public who will ultimately pay the price for its actions. Even more alarming, it is now imposing never-before-seen controls over newsroom decisions and editorial judgment, in direct violation of the First Amendment and the law.”
These two starkly opposing declarations from key FCC officials only further underscore the ongoing, heated, and highly polarized debates over just how far the Trump Administration will push what journalist Dylan Byers called a “pay-for-play regulatory environment.”
Paramount’s questionable $16 million settlement over alleged “biased” 60 Minutes reporting
Byers said in a recent PBS News Hour broadcast, “And so long as everyone plays ball here, so long as Paramount is willing to make that $16 million settlement, so long as Skydance, the new owners who are coming in, are willing to agree to certain FCC provisions, like getting rid of DEI or hiring an ombudsman to ensure that there's no bias at the network, and allowing FCC to dictate editorial controls, then you run into a position where, call it what you will, this is the way that deals get done, at least so long as Trump is in office.”
Byers was referencing Paramount’s $16 million settlement of Trump’s lawsuit over the editing of a 2024 Kamala Harris interview on the Paramount-owned CBS News program 60 Minutes, which Trump claimed portrayed Harris in a biased manner to sway public opinion in her favor. But according to the New York Times, “Many lawyers had dismissed Mr. Trump’s lawsuit as baseless and believed that CBS would have ultimately prevailed in court, in part because the network did not report anything factually inaccurate, and the First Amendment gives publishers wide leeway to determine how to present information.”
The settlement led to widespread speculation that its primary purpose was to seal the deal for the Trump administration and the FCC’s necessary approval of the Paramount-Skydance merger.
Prominent comedians and satirists fight back over the cancellation of The Late Show With Stephen Colbert
Fuel had already been added to this debate’s fire on July 17 when CBS cancelled The Late Show With Stephen Colbert, a stalwart institution of late night television. CBS executives George Cheeks, Amy Reisenbach, and David Stapf insisted that the cancellation was “purely a financial decision against a challenging backdrop in late night. It is not related in any way to the show’s performance, content or other matters happening at Paramount.”
Colbert, who has relentlessly roasted Trump on his show for years, had called the settlement a “big fat bribe” on July 14, only three days before his show’s announced cancellation. The show’s axing immediately raised a chorus on condemnations from prominent entertainment figures, including The Daily Show host Jon Stewart, who said, “The fact that CBS didn’t try to save their number-one rated late-night franchise that’s been on the air for over three decades is part of what’s making everybody wonder: Was this ‘purely financial’? Or maybe it’s the path of least resistance for your $8 billion merger to kill a show that you know rankled a fragile and vengeful president who’s so insecure that he’s suffering terribly from a case of chronic penis insufficiency.”
South Park goes in for the kill
Sweeping right in on the aftermath of all this high-profile comedic condemnation, South Park, a show that has never been known to shy away from phallic humor among other ribaldries, ruthlessly ripped into both Trump and the Paramount-Skydance merger with what has arguably already become one of its classic episodes: “Sermon on the ‘Mount,” its season 27 premiere.
In the episode, a mercurial and arrogant Trump is shown cozying up in bed to Satan, who seems rather contemptuous of the President while rejecting his advances. The episode also includes a digitally altered image of the President’s genitals—which the character of Satan refers to as "so small.” A character depicting Jesus is then brought in to South Park Elementary by its “Power Christian” Principal, sparking a riot in the community based on the opposition to the mixing of religion and public education, resulting in a $5 billion lawsuit from Trump.
In the end, the town comes to an agreement to pay Trump a smaller $3.5 million settlement and to create a public service announcement (PSA) with "pro-Trump messaging." The episode closes with a very realistic AI-assisted PSA featuring a confused and exhausted Trump wandering through the desert and stripping naked, with a voice over narration: “Who survived the wilderness and gave the ultimate sacrifice? When things heat up, who will deliver us from temptation? Donald J. Trump. No matter how hot it gets, he’s not afraid to fight for America.” After Trump collapses onto the ground, the PSA is “endorsed” by his own googly-eyed penis.
Unsurprisingly, the episode drew a massive amount of attention, with many applauding South Park creators Trey Parker and Matt Stone for being one of the few high-profile entertainment figures to overtly criticize both the Trump Administration and the Paramount-Skydance merger, along with direct references to the 60 Minutes settlement, featuring an animated version of clips from the show depicting its hosts visibly trembling and carefully mincing their words to avoid offending Trump and incurring his wrath. But even in the midst of their controversial season premiere, the duo secured $1.5 billion for the streaming rights to South Park, which guarantees the show's run on Paramount+ for the next five years.
Initial reporting hints that both Skydance and the Trump Administration were aware of the premiere’s content before it aired. Dominic Patten wrote in Deadline, “Looking up the food chain of events, Skydance was warned of the episode’s content earlier it seems. With FCC approval of Skydance’s drawn-out merger with Paramount imminent, the administration was also given a heads up over the what was going to be in the South Park premiere, I’m told.”
South Park is ultimately a much more profitable investment for Paramount compared to The Late Show With Stephen Colbert, which has reported annual losses of around $40 million, whereas South Park is a very successful enterprise with multiple sources of income, including syndication agreements. So, despite its most scathing criticisms of this Administration and the many prominent institutions who have capitulated to it, South Park will live on, once again bolstering the notion that, money not only talks but gets the final word.
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