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Hello and welcome back to What I’m Hearing+, the walk-off homer of the WIH ball game (yes, I’m going to Dodgers-Marlins tonight). As Paramount and Donald Trump head to mediation tomorrow over the CBS 60 Minutes interview with Kamala Harris, today I’ve got a (somewhat heated!) debate between Eriq Gardner and myself over the mechanics and motivations at issue, and how this might all play out. Plus, Eriq unearthed a curious filing in the Justin Baldoni–Blake Lively litigation that says a lot about the origin of this case, as well as some updates on the Murdoch family feud, Warners’ Superman litigation, and the latest (baseball-related!) front in the war over celebrity images. All yours, Eriq…
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Eriq Gardner |
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- Will Trump’s war on Big Law tackle the NFL?: When Donald Trump says something should happen, it’s smart to gauge the fallout if he doesn’t get his way. To wit: During the NFL Draft this past weekend, Trump blasted the “stupid” owners who passed on Shedeur Sanders—the quarterback son of Deion—and insisted that they select him immediately. Shedeur eventually went to the hapless Cleveland Browns in the fifth round. But it’s hardly far-fetched to imagine Trump, who has been nursing a grudge against the NFL since his USFL flameout in the ’80s (and exacerbated by the Colin Kaepernick protests during his first term), eventually turning his attention to the league’s much-lauded “Rooney Rule,” which requires that teams interview minority candidates during their head coaching searches.For guidance on how that might go, commissioner Roger Goodell should pay attention to the president’s ongoing war against Big Law. Not every firm folded. Perkins Coie, Jenner & Block, Susman Godfrey, and WilmerHale pushed back, filing lawsuits after being targeted for their affiliations with Trump’s perceived enemies. Buried within these cases, past all the noise about Trump’s vendettas and retaliatory tactics, was a deeper legal fight over whether the administration can investigate diversity-promoting practices like the Rooney Rule.
The legal community’s Mansfield Rule—which requires law firms to interview diverse candidates, report data, and submit to annual certification—was explicitly modeled on the NFL’s playbook. Trump’s D.O.J. lawyers are arguing that the Mansfield Rule, which has led firms to hire and promote significantly more women and attorneys of color, is enough to justify federal scrutiny and even to disqualify firms from government contracts. Whether courts agree will have huge implications—not just for law firms, but potentially for the NFL and any company sensitive to diversity in hiring decisions.
- Celebrity face value on trial: A couple weeks ago, I flagged a moment of Hollywood unity around proposed legislation that would crack down on nonconsensual deepfakes while carving out protections for biopics, journalism, and other works protected by the First Amendment. SAG-AFTRA loved it. The Motion Picture Association signed off. But now the issue of celebrity images has again cropped up, this time in a sports gambling dispute. The Major League Baseball Players Association is suing DraftKings for using players’ faces in its apps and social media promos without permission. DraftKings tried to dodge the suit by claiming a public interest exception under Pennsylvania’s right of publicity law—basically arguing that player stats are “newsworthy.” No dice, said U.S. District Judge Karen Marston.DraftKings is now asking for an immediate appeal, hoping to get a federal appeals court to settle the reach of public interest exceptions to image rights laws. They’re also throwing shade at the MLBPA for trying to push a class action on behalf of all players. Marston has scheduled a hearing for tomorrow, and if she gives a green light on what’s being touted as a first-of-its-kind appeal, you can be sure that Hollywood’s interest groups will want to have their say.
- Murdoch’s novel theory in family feud: The Nevada Supreme Court has granted a camera-access request and will allow livestreaming of its May 7 hearing over the secrecy of the Rupert Murdoch trust battle. One has to consider this a positive sign for media outlets hoping to convince these justices to unseal court filings in the Murdoch family’s intergenerational brawl.Meanwhile, Murdoch is appealing a lower court ruling that blocked his efforts to amend the trust and consolidate control under his eldest son, Lachlan. The 94-year-old media mogul is arguing that his moves were all part of a long-standing, unified plan to protect his media empire for the family’s benefit. His legal team is invoking the “step transaction” doctrine, arguing that the various trust maneuvers should be treated as a single, integrated event. Notably, in court documents I’ve reviewed, Murdoch’s lawyers admit this is the first time such a theory has been tested at the Nevada Supreme Court.
- Baldoni, Lively, and the “sham” subpoena: There are plenty of reasons why the Blake Lively–Justin Baldoni legal war blew up, but one of the biggest is that publicist Stephanie Jones decided to hand over her former employee Jennifer Abel’s texts to Lively’s camp, perhaps using a subpoena as cover. The texts revealed how Baldoni’s crisis management team initially game-planned the developing rift with Lively, and how they were monitoring social media interactions. Now there’s new information about that subpoena. According to an amended complaint filed by Team Baldoni against Jones, the subpoena was part of what they call a “sham legal proceeding” initiated in New York by a corporate entity tied to Lively and Ryan Reynolds. That case closed in December.I tracked down the mystery complaint filed in that case, and I’ve got to say that Vanzan, Inc. v. Does 1-10 does seem extremely shammy. The filing reads like it was drafted by ChatGPT after being fed only the vaguest prompts—generic allegations, anonymous defendants, and hand-wavy claims about breached obligations and reputational harm. This thing is the equivalent of a house made of matchsticks. It likely wouldn’t have survived the slightest judicial scrutiny. But judge for yourself: Here’s the very first court filing in what would explode into Lively v. Baldoni.
- O Toberoff!: A federal judge may have thrown out his Superman case a few days ago, but I doubt that Marc Toberoff, the famously relentless entertainment litigator, is done trying to wrestle foreign rights to the character away from Warner Bros. I’m not sure why Toberoff didn’t spend more time shoring up the glaring jurisdictional issues—it was obvious to me from the get-go—but the recent dismissal probably won’t stop him, especially with James Gunn’s would-be blockbuster Superman looming this July and significant precedent at stake. I’d expect Toberoff to resurface in one of the countries where rights revert 25 years after an author’s death. Let’s just say I know that Toberoff enjoys spending time in Canada.
- I got you in court, babe?: Another week, another Hollywood trial. This time it’s Cher v. Mary Bono, Sonny Bono’s widow and a former congresswoman. Mary, as I previously reported, tried to cut off Cher’s 50 percent royalty payments from songs that Sonny wrote and the two recorded as beloved pop duo Sonny & Cher. Last May, Cher largely prevailed, with the judge ruling that her rights to songwriting money, granted under her 1978 divorce agreement with Sonny, weren’t wiped out by the termination provisions of copyright law. Still, some loose threads remain: royalties that music publisher Wixen allegedly diverted to Bono before the judge’s decision, plus side issues involving administration fees and Cher’s sale of her interests to a company controlled by Irving Azoff.
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And now for this week’s main story…
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An insider debate over how the Paramount-Skydance sale actually plays out: Will Shari settle the 60 Minutes suit? Is Trump pulling Brendan Carr’s strings? Can the president be flattered into approving the deal? And what’s the future of CBS if its owners bend the knee?
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The seemingly endless, $8 billion merger of Skydance and Paramount remains the hottest topic in the media business—and with good reason. Every week seems to bring a fresh complication. The F.C.C. is dragging its feet on regulatory approval, and Donald Trump’s lawsuit over 60 Minutes’s election coverage lurks in the background. Is there some kind of détente on the horizon, or will the whole thing collapse under the weight of legal and political theatrics?
The pressure is starting to show. Last week, 60 Minutes executive producer Bill Owens abruptly resigned. On Sunday, Scott Pelley used the closing moments of the broadcast to make it plain: “Our parent company, Paramount, is trying to complete a merger,” he said. “The Trump administration must approve it. Paramount began to supervise our content in new ways.” Owens, he added, “felt he lost the independence that honest journalism requires.”
Of course, nothing is ever that simple… or is it? Starting tomorrow, attorneys for CBS and Trump will sit down for mediation with Daniel Weinstein at JAMS. Maybe they’ll hammer out a truce. Maybe not. Either way, the clock is ticking—for the merger deal, for Shari Redstone’s exit plans, and for anyone still clinging to the notion that this story ends cleanly. Matt Belloni and I debate all the potential twists and endgames here.
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Eriq Gardner: I’ve got to say, I’m skeptical about the prevailing narrative—something you touched on when you wrote that the most powerful figure in this affair is Weinstein, the mediator. As someone who’s covered legal affairs for a long time, I’ve never viewed the mere act of going to mediation to be particularly meaningful. Mediation is often just a box to check in civil litigation, and plenty of judges—including this Texas character Matthew Kacsmaryk—routinely nudge parties toward settlement talks as a matter of course. So why are we reading so much into this particular mediation?
Matthew Belloni: First, Weinstein has settled a ton of high-stakes and complex litigations—including, I’m told, one that involved Donald Trump. Second, both sides are motivated here. Redstone and David Ellison, obviously, want a deal that will hopefully grease the wheels of their deal. And Trump—or at least his legal team—must know that his case is shaky at best. Plus, a public apology would be a needed win for him. And to the extent that the case is connected to the F.C.C. approval, chairman Brendan Carr must know that Redstone and/or Ellison could sue if he blocks the transaction—and, given the lack of antitrust issues and the high standard for “bias,” they’d probably win.
Eriq: I totally buy that Shari wants a settlement. And I’ll accept that Ellison wouldn’t mind if the case just disappeared. But neither is a direct party to the Trump lawsuit. CBS is the defendant, and from what I hear, top executives there aren’t exactly eager to cut a deal with the president—especially Matthew Schafer, one of the country’s top First Amendment scholars, who’s leading litigation strategy at the company.
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Matt: Hold on. Shari is CBS. She’s the controlling shareholder of Paramount, the parent company, via her National Amusements. I know that the board must approve the settlement, and she’s told them she’ll recuse herself, but the board has outlined terms that are acceptable to a deal, according to the Times, and ultimately, Shari controls the board.
Eriq: Let’s not forget—she still has fiduciary duties to the company. To suggest that the controlling shareholder will simply force a settlement is to suggest she’s meddling for her own enrichment.
Matt: But you’re suggesting that settling a winnable case isn’t in the best interests of the company. Wouldn’t it be in the company’s interest to resolve a public fight with the president, not to mention remove a potential impediment to its sale to a deep-pocketed buyer?
Eriq: So they’re entitled to the business judgment that CBS would be better off in someone else’s hands? Sure. I’m sure the lawyers can’t wait to make that argument—right after they cough up all her 60 Minutes texts to the shareholders who are suing her. Maybe the $200 million in indemnification she squeezed out of Skydance has given her peace of mind, even if that money won’t go nearly as far as she thinks once the billable hours start piling up. Maybe she’s decided the CBS News journalists are expendable collateral. But I’m not quite ready to believe she’s willing to torch her own newsroom to cash out—at least, not yet.
Matt: Money is money, and this is an $8 billion transaction that will put $2.4 billion in her family’s pocket. Journalistic ethics are the foundation of the CBS News brand, but if Shari is presented with a choice between a massive journalism scandal or potentially tanking the sale she’s negotiated for more than a year to a buyer she handpicked, she will side with the money and the deal. Even if the scandal damages the brands of CBS News and 60 Minutes.
Eriq: That’s not nothing. You can sell off the furniture, sure. But gutting the credibility of CBS News is setting fire to a brand that still commands political access and advertiser trust. Let me tell you, if there does come a settlement, I look forward to covering the fallout in the Delaware Court of Chancery. I’d expect a good derivative action accusing her of self-dealing and demanding that, at the very least, she personally pick up the tab for the Trump payout. Maybe more, too. I’ll repeat what I’ve said before: They need to rename the courthouse there in Wilmington after the Redstones.
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The Shari Desperation Index
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Eriq: I’m also having a hard time following the supposed logic here. The idea is if CBS settles with Trump, he’ll somehow prod Brendan Carr into approving the merger. But there’s no way to explicitly tie merger approval to a settlement—that would be a straight-up bribe.
Matt: I’m sorry, have you been paying attention to this administration? Carr may have said the settlement talks “have nothing to do with the work that we’re doing,” but does anyone believe him? Disney paid Trump $16 million to settle a very winnable ABC News case. Meta paid $25 million to settle its own litigation, a move widely seen as a gift to Trump. Amazon didn’t even bother to couch its bribe—sorry, payment—as a settlement. The company just agreed to pay $40 million for a Melania documentary.
Eriq: Perhaps, though I think the ABC example actually proves my point. They settled, yet Carr is still going after Disney for the crime of “wokeness.”
But the broader point here is that the lawyers circling this mess will want to be careful. So in reality, any settlement would need to make zero mention of the Paramount merger—and then everyone would have to trust that Trump would voluntarily follow through. Maybe he posts some rambling endorsement of David Ellison on Truth Social. Maybe he tags Carr for good measure. But honestly: Who in their right mind would trust Trump to do anything once the ink is dry?
Matt: That’s a good point. Worst case for Shari is Paramount pays Trump an eight-figure settlement and the F.C.C. still blocks her deal. But even in an administration filled with Trump sycophants, Carr has displayed particular fealty to the president. Whether it’s an explicit or implicit directive, Carr will likely do what Trump wants here. And if the president gets the apology from CBS News that he clearly covets, I don’t think he will be able to resist giving the nod to Carr. Remember, both Shari and Larry Ellison are Trump supporters.
Eriq: As was Mike Pence, Michael Cohen, Bill Ackman… should I go on? As for Carr, I wrote about him last week, and I’ve got to say: I don’t think a settlement moves the needle at all. Not even an eight-figure payout with a groveling apology. So if Shari’s willing to damage CBS News’s credibility on the off chance it might influence Carr, that’s a terrible investment. At best, maybe it finally gets Carr and Ellison in the same room, but I’m not even sure of that. I guess the real question is, just how desperate is Shari? Is she so hard up that she’s willing to be the Neville Chamberlain of the media industry?
Matt: It’s not a great situation. But maybe Shari blows up CBS News to get the sale done, knowing Ellison will quickly move to repair the damage once he and Jeff Shell take over the company. Maybe their first move will be to hire Bill Owens back at 60 Minutes. They’d be heroes.
Eriq: It sounds to me like you think there’s a good chance this all wraps up soon. As I’ve said, I still see it as a jump ball. That’s my way of avoiding a firm prediction—but if you made me bet Rams tickets on it, I’d probably lean toward “no approval” by the time the new NFL season kicks off in September.
Matt: I will buy you the second-worst seat at SoFi Stadium if this thing isn’t wrapped up by September.
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Okay, that’s it for today. I’ll be back on Thursday night.
Matt
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Puck founding partner Matt Belloni takes you inside the business of Hollywood, using exclusive reporting and insight to explain the backstories on everything from Marvel movies to the streaming wars.
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