By Joe Flint and Drew FitzGerald
Donald Trump has filed lawsuits against Disney's ABC and Paramount Global's CBS, railed against "fake" and "failing" news organizations, and called for the government to revoke some broadcasters' licenses.
Now, he will be bringing those grudges back to the White House. The question is whether Trump will stay in the realm of verbal attacks against news organizations and personalities -- or extend into regulatory action.
Mergers offer an avenue for Trump to exercise his clout. Business leaders expect the next Trump administration to foster a more permissive overall dealmaking environment. But Washington observers say media companies are a special case, because editorial content can be a wild card in influencing Trump's approach to the sector.
"Will they feel a chill? They might," said Robert McDowell, a former commissioner at the Federal Communications Commission. With plenty of pent-up demand for deals, he said, media companies considering such moves might have concerns. "I would definitely have to think how the administration views me and how that would affect regulatory approvals," said McDowell, a Republican who is now a partner at law firm Cooley.
During Trump's first term, his administration unsuccessfully sued to block AT&T's acquisition of CNN parent Time Warner. Trump often vented his anger at the news network's coverage of him, and his Justice Department repeatedly suggested that the unit housing CNN might need to be sold for a deal to proceed.
Trump will return to office as a handful of major deals await U.S. approval, including Skydance Media's merger with Paramount Global and the union of satellite broadcasting companies DirecTV and Dish.
Comcast is also considering spinning off its cable-television networks, including MSNBC and USA, into a separate, publicly traded company, with an eye on acquiring assets to add into such a venture.
Telecom and media lobbyists say the next administration could be unpredictable when it comes to dealmaking and regulation. Trump tried to ban the Chinese-owned social-media app TikTok through an executive order during his first term, citing national-security concerns. He softened his stance earlier this year, saying a potential ban would be a "tough decision" best left to Congress. President Biden earlier this year signed a law that will force a ban or sale of the app.
Trump "could use the FCC to try to settle the scores," said Gigi Sohn, a former Federal Communications Commission official during the Obama administration and co-founder of the media-advocacy group Public Knowledge. "It depends on how he's feeling on any particular day," she added.
"The American people re-elected President Trump by a resounding margin giving him a mandate to implement the promises he made on the campaign trail. He will deliver," said transition-team spokeswoman Karoline Leavitt.
'Enemy camp'
Trump already has some media companies in his sights. In his victory speech, he referred to "certain networks" as "the enemy camp," name-checking CNN and MSNBC.
He sued Disney's ABC and morning-show anchor George Stephanopoulos for defamation, and alleged Paramount misled the public and disadvantaged him because of how it edited a "60 Minutes" interview on CBS with Vice President Kamala Harris. In addition to lawsuits, he or his surrogates have suggested that ABC and CBS should lose their broadcast licenses because of their reporting on various topics. He also called for yanking the local TV licenses of Comcast's NBCUniversal.
Trump's lawyers sent the New York Times a letter before the election accusing the outlet of defamation for reporting in a book by Times reporters about the president-elect's business practices, an article about Trump's history of scandals and business failures, and an interview with a former Trump White House chief of staff, according to a person familiar with the matter. Trump has a history of making legal threats against the Times, and he and his campaign have unsuccessfully sued the newspaper previously.
A president's direct weapons against the news media are limited. Broadcasters and publishers enjoy free-speech protections, and the FCC is an independent agency with decisions subject to potential court challenges.
The FCC issues broadcast licenses, which typically run eight years. The next cycle begins in 2028, though challenges can be made before renewal applications are filed and during the renewal process.
Trump's first-term threats to revoke broadcast licenses of TV stations owned by the major networks failed to gain traction. Ajit Pai, the FCC's chairman under Trump, said in 2017 that the regulator did "not have the authority to revoke a license of a broadcast station based on the content of a particular newscast."
The only time a television station lost its FCC license for failing to serve the public interest was in 1971, when a Jackson, Miss., station was stripped of its license for defending segregation.
Cable networks such as CNN and MSNBC aren't regulated by the FCC because they don't use public airwaves to transmit their signals.
Last month, investor and Trump loyalist David Sacks suggested on the social-media platform X that CBS, NBC and ABC no longer serve the public interest and that the broadcast spectrum their local stations use should be reclaimed and auctioned off. "The networks can continue to operate on cable like hundreds of other redundant channels," he wrote.
That might be a tough sell in Congress, where broadcasters have strong relationships with lawmakers. The fact that several major broadcasters have politically conservative owners could stymie efforts to make major changes to the licensing system, too.
" Nexstar, Fox and Sinclair have a lot of sway with Trump," said Blair Levin, a Brookings Institution fellow and former FCC official.
Paramount concern
Trump's antitrust approach has defied easy categorization. In his first term, his administration threatened to block deals across sectors including semiconductors, health and telecommunications. In the media realm, the FCC in 2018 derailed the merger of TV-station owners Sinclair Broadcast Group and Tribune Media, dealing a setback to Sinclair, a media company known for its chairman's conservative politics.
Skydance needs approval from the FCC to complete its takeover of Paramount Global and transfer licenses for stations that broadcast CBS.
The Justice Department approval period under the Hart-Scott-Rodino Act has lapsed, which indicates there will be no antitrust challenge to the deal from that government body.
Shari Redstone, the controlling shareholder of Paramount Global parent National Amusements, and Larry Ellison, a major stakeholder in Skydance and founder and chairman of Oracle, both have long ties to Trump.
This month, Trump filed a $10 billion lawsuit against CBS that accused the network of deceitfully editing an interview Harris did for the newsmagazine show "60 Minutes." CBS has denied any wrongdoing and said the suit is without merit.
Spokespeople for Skydance and Paramount Global declined to comment.
Brendan Carr, a Republican named FCC commissioner during Trump's first term and renominated by Biden, is considered by people close to the Trump campaign to be a leading contender to become the agency's new chairman. Leavitt said the president-elect will announce his picks for key posts as the decisions are made.
Carr outlined many of his views for the FCC in the Heritage Foundation's Project 2025 policy paper. The paper pushed for increased scrutiny of big tech firms such as Meta Platforms and Alphabet's Google and urged authorities to further deregulate the broadcast industry to allow more local TV stations to merge.
Many TV broadcasters, programmers and cable companies struggling with flagging growth see mergers as their surest path to boost profits.
"We have an upcoming new administration and it's too early to tell. But it may offer a pace of change and an opportunity for consolidation that may be quite different," Warner Bros. Discovery Chief Executive David Zaslav said during his company's earnings call on Thursday.
--Alexandra Bruell contributed to this article.
Write to Joe Flint at Joe.Flint@wsj.com and Drew FitzGerald at andrew.fitzgerald@wsj.com
(END) Dow Jones Newswires
November 14, 2024 05:30 ET (10:30 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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