Paramount’s board of directors is facing a ticking clock to settle President Trump’s $20 billion lawsuit against CBS — over CBS News’s conduct during the election — if it hopes to keep its merger with Skydance Media on track. 

As the Skydance deal — considered critical for the survival of the company — has been on hold for months, attorneys for Mr. Trump and Paramount have been negotiating a potential settlement of his lawsuit over the October 2024 “60 Minutes” interview with Vice President Harris. Lawyers for CBS Inc. have unsuccessfully sought to have the case dismissed.

However, last week, private attorneys for Mr. Trump filed a motion asking to extend deadlines in the lawsuit until mid-July “because the Parties are engaged in active settlement discussions, including continued mediation.” A media analyst, Rich Greenfield, said in a recent note that Paramount is currently “paralyzed by legal fears” about the Skydance deal because of the CBS lawsuit. 

Liberal journalists and coastal legal analysts believe the Federal Communications Commission is holding up the deal until Paramount settles Mr. Trump’s lawsuit against CBS News, which alleges the Harris interview was improperly edited to help her campaign and caused him harm and distress at the climax of the election season. Members of Paramount’s board reportedly feel the same. 

In roughly two weeks, Paramount will run into a series of deadlines that could complicate its attempt to close its merger with Skydance. On July 2, Paramount will be electing new board members who would have to vote to approve any potential settlement with Mr. Trump. The all-but-certain failure to get the Skydance deal approved by its July 7 deadline means that the two studios will have one more extension to get the deal over the finish line — otherwise, it could die, with potentially dire consequences for the company and the thousands of entertainment industry professionals it employs directly and indirectly. 

Indeed, Paramount’s deal is seen as necessary to keep one of Hollywood’s oldest studios intact. Meanwhile, the deal would give the family that controls Paramount, the Redstones, funds to pay off their debts and walk away without about $1.8 billion. If the deal fails, the Redstones would be on the hook for about $400 million in kill fees, which experts on corporate transactions say the family will have difficulty raising. Paramount Global would likely be carved up and sold to private equity firms — which are not known for sentimentality or good corporate stewardship. 

The Skydance acquisition of Paramount — funded by Larry Ellison, the fourth richest American, whose son, David, aspires to be an old-school studio mogul — needs the approval of the FCC and has been on hold for months. The Trump-appointed chairman of the regulatory agency, Brendan Carr, has said the president’s lawsuit is not related to the review process. Still, the commission is conducting a news distortion investigation of the Harris interview that Mr. Carr said could factor into the review of the Skydance deal.

Left-wing journalists have cast settling Mr. Trump’s lawsuit as a payoff — and a bending of the knee — to Mr. Trump.

As the process has dragged on, there have been growing doubts about whether the merger will happen. The deadline for the deal has already been extended to July 7 from April 7. If that deadline is not met, the deal would be automatically extended one more final time, until October 7, after which point the deal would be dead.

A media analyst at LightShed Partners, Mr. Greenfield, says he is “increasingly concerned the deal could collapse as Paramount is paralyzed by legal fears surrounding the pending President Trump-CBS 60 Minutes lawsuit.”

In a note about the Skydance deal earlier this week, Mr. Greenfield said he thinks it is “unlikely” that the FCC will complete its review of the Skydance deal until the “current Trump/CBS lawsuit is resolved.”

If a settlement deal is not reached by the time Paramount’s new directors are elected, the new board would have to vote to approve a settlement, which poses its own risks as Paramount is facing a pressure campaign not to settle the lawsuit. Democrats in state and federal government have been warning Paramount that settling Mr. Trump’s lawsuit could violate anti-bribery lawsuits. A group of three powerful, left-wing Democratic senators, including Bernie Sanders and Elizabeth Warren, sent a letter to the matriarch of the Redstone family, Shari Redstone, saying that it could constitute an illegal bribe.

Meanwhile, California’s state senate invited the ousted CEO of CBS News and Stations, Wendy McMahon, and the ousted executive producer of “60 Minutes,” Bill Owens — both recently pushed out after expressing opposition to a settlement — to testify about attempts to settle Mr. Trump’s lawsuit and examine whether a deal to resolve the lawsuit would constitute a bribe. 

Several reports have indicated that Paramount’s board is concerned that the possibility of settling Mr. Trump’s lawsuit could expose them to legal perils. A columnist for the New York Post, Charles Gasparino, reported that the board is concerned its liability insurance might not cover legal expenses stemming from a potential settlement as such insurance typically does not cover legal expenses related to bribery allegations. 

One way to try to muddy the waters and avoid the appearance of the bribe is to offer an apology for the Harris interview, which would likely include an admission of wrongdoing. However, Puck’s Eriq Gardner notes an apology comes with its own risks, as the producers of “60 Minutes” might sue Paramount for defamation if they feel they are being accused of acting improperly. 

Another way to try to avoid the appearance of a bribe is to keep a settlement within the range of what other companies have paid to resolve Mr. Trump’s lawsuits. In December, Disney agreed to pay $16 million to settle a defamation lawsuit after host George Stephanopoulos repeatedly and falsely said Mr. Trump had been “found liable for rape.” Disney — and Mr. Stephanopoulos — also apologized in the form of a small note at the end of a news article on ABCNews.com.

Aside from the legal perils, executives at Paramount may also have to contend with high-profile resignations at “60 Minutes” (or firings, if talent or producers are asked to apologize and refuse), as some of CBS News’s marquee talent have become increasingly vocal about opposing a settlement. 

Even if a settlement is reached before the fast-approaching July deadline, it is unclear if the FCC would review the Skydance deal before October 7. The agency typically aims to complete such reviews within 180 days. Currently, it is on day 214, according to a tracker on the agency’s website. It is unclear how long the review process will take and if it will be completed before the final deadline. 

If neither side can reach an agreement by July 7, it would likely put immense pressure on Paramount to reach a deal with Mr. Trump, as it would mean there would be one last window for the deal to be approved. That pressure could lead Paramount to make major concessions to salvage the Skydance deal before its October 7 expiration date. 

However, Mr. Greenfield notes, “It appears quite clear that Paramount’s Board of Directors and senior executives are concerned about personal liability tied to signing off on a Trump settlement.” The position of the new, incoming directors on the settlement is unclear. 

If the deal is not approved, Ms. Redstone’s family would be out the nearly $2 billion, stuck with Paramount, which has seen its market value plummet in recent years, and in need of a new way to pay off its debt.

The family of the CEO of Skydance Media, the Ellisons, and BDT Capital Partners loaned the Redstones’ company, National Amusements, $400 million. Without the infusion of money from the Skydance deal, it is not entirely clear how the Redstones would pay off that loan or what the repayment plan would be. Some media reporters have suggested that the Redstones’ controlling shares in Paramount could be an asset that is used to pay off the loan, potentially giving Ellisons control of Paramount without having to pay the amount they would have under the terms of the Skydance deal. 

Representatives for Paramount did not respond to the Sun’s request for comment by the time of publication.