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Weekend Law: White House Media Ban, Paramount Settles & The Arch · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June Grosso from Bloomberg Radio.
0:08
Speaker 2: It's sick.
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Speaker 3: I mean, there's something wrong with a country that can
0:14
Speaker 3: allow people to write purposely negative stories. Now, if they
0:19
Speaker 3: want to write them, that's fine. But I don't have
0:21
Speaker 3: to let them into the people's house.
0:24
Speaker 4: President Trump admitted on Monday that he was banning three
0:28
Speaker 4: prominent news outlets from the White House because he didn't
0:32
Speaker 4: like their coverage of him. Those news organizations, CNN, MSNOW,
0:37
Speaker 4: and Politico, sued saying the ban was a direct assault
0:41
Speaker 4: on the First Amendment. And by Thursday, they were allowed
0:45
Speaker 4: back into the White House after a federal judge blocked
0:49
Speaker 4: Trump's ban. Judge Timothy Kelly, a Trump appointee, found that
0:53
Speaker 4: the news organizations had met the high bar of showing
0:57
Speaker 4: they were likely to succeed on the merits of the case.
1:01
Speaker 4: Trump's ban marked a significant escalation in his efforts to
1:05
Speaker 4: put restraints on journalists and control the narrative surrounding his presidency,
1:10
Speaker 4: an extraordinary move no president before him has ever taken,
1:15
Speaker 4: and one that former President Barack Obama found stunning.
1:20
Speaker 5: You just can't come to the White House press briefings
1:24
Speaker 5: anymore because you're giving the current president unfavorable coverage. I'm
1:30
Speaker 5: trying to think what would have happened if I had said,
1:33
Speaker 5: you know what, Fox News, you're out of here. It's unimaginable.
1:38
Speaker 4: Joining me is an expert in the First Amendment, Timothy Zick,
1:41
Speaker 4: a professor at William & Mary Law School. Tim, is
1:44
Speaker 4: Trump's war on the press escalating or is it just
1:48
Speaker 4: more of the same?
1:49
Speaker 6: So ever since Trump entered politics, he's been railing against
1:53
Speaker 6: the press and journalists and particularly journalists. outlets that report
1:58
Speaker 6: critically on the administration or him. And when they report
2:02
Speaker 6: things he doesn't like, he denigrates them. He calls it
2:05
Speaker 6: fake news. And now in the second term, he's taking
2:09
Speaker 6: more concrete actions than he was in the first term.
2:13
Speaker 6: So this is an escalation. It's blatantly unconstitutional to exclude
2:18
Speaker 6: the press or particular journalists or particular media based on
2:22
Speaker 6: the point of view that they publish or the content
2:25
Speaker 6: of what they publish, whether he likes it or not.
2:29
Speaker 6: That is the definition of a free press, that the
2:32
Speaker 6: president can't just pick and choose the coverage he wants.
2:35
Speaker 6: Every president would like to do that, of course, but
2:38
Speaker 6: only in authoritarian countries can you actually You can pick
2:42
Speaker 6: and choose which news gets reported and punish reporters that
2:46
Speaker 6: don't sort of toe the party line.
2:48
Speaker 4: Tell us about the news organization's claims in their lawsuit
2:52
Speaker 4: that the ban is a blatant violation of the First Amendment.
2:56
Speaker 6: The president singled out particular media outlets for sanction, in
3:01
Speaker 6: this case, exclusion and revocation of their press credentials based
3:05
Speaker 6: on what they wrote, based on the sort of negative
3:08
Speaker 6: coverage as he sees it or critical coverage or the
3:10
Speaker 6: perspective of their publications. That is a violation of the
3:14
Speaker 6: First Amendment, whether it takes place in this context or
3:17
Speaker 6: some other. And the reason it's a violation here is
3:20
Speaker 6: that journalists are, of course, invited to come to the
3:23
Speaker 6: White House where news is made and to do their job.
3:26
Speaker 6: It's important that they be there. And when the government
3:29
Speaker 6: makes that kind of benefit available, access, it can't deprive
3:32
Speaker 6: it just for certain media outlets based on the content
3:36
Speaker 6: of what they're reporting.
3:38
Speaker 4: Did you expect the judge to issue this temporary restraining order?
3:42
Speaker 4: Was it any surprise?
3:43
Speaker 7: I did.
3:44
Speaker 6: I'm not surprised because the same judge issued a similar
3:47
Speaker 6: order with respect to Jim Acosta, who had been denied
3:50
Speaker 6: his press credential without due process during the first Trump administration.
3:54
Speaker 6: So it's the same judge, same issue. Given the law
3:57
Speaker 6: on the D.C. Circuit with respect to this issue, which
4:00
Speaker 6: has come up multiple times now, it's hard to escape
4:04
Speaker 6: the conclusion in this particular context. So who knows what
4:09
Speaker 6: happens after, but at least as far as due process
4:12
Speaker 6: is concerned, this is a necessary decision and one that
4:15
Speaker 6: follows the law. So it comes as no surprise.
4:17
Speaker 4: Let's talk about the national security argument, which the government
4:21
Speaker 4: raised after the lawsuit was filed. And letters which were
4:26
Speaker 4: provided to the court said that CNN, MSNOW, and Politico
4:30
Speaker 4: were banned for trafficking in verifiable falsehoods about national security issues.
4:35
Speaker 4: and publishing sensitive or classified information. The judge tore that
4:40
Speaker 4: argument apart in several different ways. What's your take on it?
4:45
Speaker 6: Well, I'm as skeptical as the judge was at the
4:48
Speaker 6: hearing and in the opinion, in part because none of
4:50
Speaker 6: that was mentioned when Trump blurted out his ban. So
4:55
Speaker 6: the explanation that he gave was fake news and these
4:59
Speaker 6: stories are negative and they diminish me. And you shouldn't
5:02
Speaker 6: have the right to do that from inside the hallowed
5:04
Speaker 6: halls of the White House. So it seems like a
5:08
Speaker 6: post hoc rationalization, an effort to sort of have a
5:12
Speaker 6: court defer, because when courts hear national security, oftentimes they
5:16
Speaker 6: will give some deference to the government. But this judge didn't,
5:20
Speaker 6: in part because he said this all seems to be
5:22
Speaker 6: post hoc and rational. At least so far on the record,
5:25
Speaker 6: they didn't submit any affidavits or any evidence of any
5:29
Speaker 6: kind of national security breach. Worse than that, I think
5:32
Speaker 6: some of their examples were situations where the press had
5:35
Speaker 6: based its news reporting on anonymous sources from inside the
5:39
Speaker 6: White House. So it's pretextual, I think, is the right
5:43
Speaker 6: word for it, unless and until they come up with
5:45
Speaker 6: some evidence to support it.
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Speaker 4: So was the weight of the judge's decision based on
5:50
Speaker 4: due process arguments?
5:52
Speaker 6: Yes, this opinion is based solely on the deprivation of
5:55
Speaker 6: due process, the lack of any sort of process or
5:58
Speaker 6: standards or notice to these journalists before their credential was revoked.
6:04
Speaker 6: And the court mentions press freedoms, but only as part of.
6:08
Speaker 6: the reason to grant preliminary relief, this sort of irreparable
6:12
Speaker 6: harm that would occur in the absence of some relief.
6:15
Speaker 6: And that irreparable harm, of course, is press freedoms are
6:18
Speaker 6: being violated. So it does not address, you know, is
6:21
Speaker 6: the White House a public forum? Do you have a
6:23
Speaker 6: First Amendment right to report from there? Nothing about the
6:27
Speaker 6: sort of seeming viewpoint discrimination that's part of any of this.
6:31
Speaker 6: So if that's going to come in, it's going to
6:33
Speaker 6: come in in some future proceedings.
6:35
Speaker 4: So what the news organizations got here was a temporary
6:39
Speaker 4: restraining order, which lasts two weeks. The judge is next
6:43
Speaker 4: going to consider whether to grant longer-term relief in the
6:47
Speaker 4: form of a preliminary injunction. Do you expect the arguments
6:51
Speaker 4: for a preliminary injunction will basically be the same, and
6:55
Speaker 4: perhaps the outcome too?
6:57
Speaker 6: I would expect so. You know, it's possible that on
7:00
Speaker 6: that schedule, the administration will have someone, who knows who,
7:05
Speaker 6: sign an affidavit about some national security problem. In other words,
7:09
Speaker 6: try to fix one of the problems that Judge Kelly identified,
7:12
Speaker 6: which is a lack of any sort of evidence. But
7:15
Speaker 6: I'm not sure that's going to fix the problem or
7:18
Speaker 6: unring the bell of the president saying in the beginning,
7:21
Speaker 6: I'm banning a free press. I'm doing it because I
7:23
Speaker 6: don't like the way they report on me. They shouldn't
7:25
Speaker 6: have the right to come here and criticize me was
7:28
Speaker 6: the essence of what he said in my own house.
7:31
Speaker 6: He said in the White House. So I expect the
7:33
Speaker 6: arguments to be similar. I expect maybe a little more
7:36
Speaker 6: in terms of evidence from the administration. But I would
7:40
Speaker 6: expect a preliminary injunction. And then, of course, beyond that,
7:44
Speaker 6: efforts to stay that injunction to get the D.C. Court
7:48
Speaker 6: of Appeals involved.
7:49
Speaker 5: And on we go.
7:51
Speaker 6: What about the.
7:51
Speaker 4: Due process claims? Can the administration cure those?
7:57
Speaker 6: In the sort of interim here, in the period we're
7:59
Speaker 6: in now, It's possible the administration says, well, we'll come
8:02
Speaker 6: up with a process. You can have your credentials back.
8:05
Speaker 6: The court said we had to have a process before
8:07
Speaker 6: we deprived you of them. And they'll come up with
8:10
Speaker 6: a process and then deny them, which may or may
8:13
Speaker 6: not resolve the due process problem. But it says nothing
8:15
Speaker 6: about the First Amendment issue. So going forward, you know,
8:19
Speaker 6: if the administration doesn't do that sort of due process fix,
8:24
Speaker 6: it's going to be the same result. It could be
8:25
Speaker 6: that They can fix the process piece, but not the
8:28
Speaker 6: First Amendment piece. So there's going to be more litigation
8:31
Speaker 6: on this. I don't expect the administration to just lay
8:33
Speaker 6: down and say, well, welcome back in. It's good to
8:35
Speaker 6: see everyone. You know, that's not the M.O. of Trump 2.0.
8:41
Speaker 6: And so expect further proceedings.
8:43
Speaker 4: The M.O. is quite different. The Associated Press sued last
8:48
Speaker 4: year over being excluded from Air Force One and the
8:52
Speaker 4: Oval Office because it refused to use the Gulf of
8:55
Speaker 4: America instead of the Gulf of Mexico. That suit is pending.
9:00
Speaker 4: And the Treasury Department excluded journalists from several outlets, including
9:06
Speaker 4: Bloomberg News, The New York Times, and The Wall Street Journal,
9:09
Speaker 4: from covering the recent Group of 20 Finance Minister Summit.
9:14
Speaker 4: And those are just a few of the examples.
9:16
Speaker 6: There have been lawsuits filed by the New York Times,
9:19
Speaker 6: in particular over new Pentagon press policies. And those have
9:23
Speaker 6: been successful so far in the court. So this is
9:25
Speaker 6: sort of an extensive, all of executive branch campaign against
9:30
Speaker 6: the press. So, you know, the FTC, the FCC, which
9:34
Speaker 6: has been at war with Disney and ABC. It's not
9:37
Speaker 6: just the one thing. To sort of take a wider
9:39
Speaker 6: lens here, And sometimes those restrictions result in lawsuits, and
9:44
Speaker 6: I'm suspecting sometimes they result in, I don't know if
9:47
Speaker 6: you'd call it negotiations behind the scenes rather than litigation,
9:51
Speaker 6: but they're all troubling from a First Amendment perspective, putting
9:55
Speaker 6: aside the sort of technicalities of First Amendment doctrine or
9:58
Speaker 6: due process regulations.
10:00
Speaker 5: Rights.
10:00
Speaker 6: It is not committing yourself to a free press to
10:04
Speaker 6: conduct yourself the way this administration is, quite the opposite.
10:07
Speaker 4: Tim, let's say Judge Kelly grants the preliminary injunction and
10:12
Speaker 4: it's affirmed by the D.C. Circuit, as we expect. Trump
10:17
Speaker 4: will probably go to the Supreme Court. But would the
10:19
Speaker 4: Supreme Court have any interest in taking a case like this?
10:23
Speaker 6: I mean, it's possible they would, you know, whether it's
10:26
Speaker 6: on the due process issue or the First Amendment issue.
10:29
Speaker 6: You know, one of the things the administration was arguing
10:32
Speaker 6: in the district court is some of the D.C. Circuit
10:34
Speaker 6: precedents should be overruled. And we do not have at
10:38
Speaker 6: this point guidance on, again, what kind of forum is
10:41
Speaker 6: the White House, what kind of access rights do journalists
10:43
Speaker 6: have there? So it's possible the court could be interested
10:47
Speaker 6: in making law. I mean, what it said about news
10:50
Speaker 6: gathering and press freedoms, as you probably know, isn't comprehensive.
10:55
Speaker 6: So there isn't a lot of detail. The press has
10:57
Speaker 6: the rights that ordinary Americans have, right, to gather information
11:01
Speaker 6: and publish it. But, of course, the press plays a
11:04
Speaker 6: special role in that process and is a particularly interested institution.
11:08
Speaker 6: And I don't know. I would worry if the court
11:10
Speaker 6: did get it. It has not been sort of making
11:13
Speaker 6: positive noises about press and press freedoms and its opinions.
11:18
Speaker 6: And so I would be wary of the courts opening
11:20
Speaker 6: this issue.
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Speaker 4: Well, we still have a way to go in the
11:22
Speaker 4: litigation before that might come up. Thanks for a great conversation, Tim.
11:27
Speaker 4: That's Professor Timothy Zick of William & Mary Law School.
11:30
Speaker 4: Coming up next on the Bloomberg Law Show, Paramount wins
11:34
Speaker 4: big as it settles the state's antitrust case, clearing the
11:38
Speaker 4: way for its historic $ 110 billion merger with Warner Brothers Discovery.
11:44
Speaker 4: I'm June Grosso, and you're listening to Bloomberg. On Monday,
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Speaker 4: California Attorney General Rob Bonta announced the settlement of the
11:53
Speaker 4: antitrust lawsuit brought by 12 states to stop Paramount's $ 110
11:59
Speaker 4: billion acquisition of Warner Brothers Discovery.
12:03
Speaker 7: This settlement is not a vote of support for this merger.
12:09
Speaker 7: It is not a blessing of the broader merger. Broadly speaking,
12:14
Speaker 7: we believe further consolidation in markets... that are essential to
12:18
Speaker 7: American economic life. It doesn't serve the American economy, consumers,
12:23
Speaker 7: or competition well.
12:26
Speaker 4: The settlement may not have been a vote of support
12:28
Speaker 4: for the merger, but it was the only obstacle left
12:32
Speaker 4: that could have prevented the deal from going through. The
12:35
Speaker 4: Democratic attorneys general and the Writers Guild had argued that
12:39
Speaker 4: the deal would give Paramount an undue share of the
12:42
Speaker 4: movie and cable TV industries, and the settlement does nothing
12:47
Speaker 4: to change that dominance. Paramount is not required to make
12:51
Speaker 4: any divestitures. It just has to comply with a series
12:55
Speaker 4: of terms, like releasing 12 films a year to theaters.
12:59
Speaker 4: the blockbuster deal will vastly reshape Hollywood, with Paramount now
13:04
Speaker 4: controlling two of its biggest studios, two major subscription streaming services,
13:09
Speaker 4: dozens of TV channels ranging from CBS to HBO, and
13:15
Speaker 4: iconic characters from Superman to Batman and Harry Potter to
13:20
Speaker 4: Captain Kirk. Joining me is Bloomberg Intelligence Senior Litigation Analyst
13:24
Speaker 4: Jennifer Rhee. Jen, what is Paramount giving up to get
13:28
Speaker 4: this settlement?
13:29
Speaker 7: Very little.
13:30
Speaker 1: Really, at the end of the day, I think this
13:31
Speaker 1: is a win for Paramount and a surprising settlement because
13:34
Speaker 1: we all expected something structural. And that's where I see
13:37
Speaker 1: it as a win for Paramount because there's nothing structural
13:40
Speaker 1: in it. By that, I mean, June, that they have
13:42
Speaker 1: to sell something rather than just making a bunch of
13:44
Speaker 1: promises about how they're going to behave once they're merged. Now,
13:47
Speaker 1: there are some divestiture commitments in here, but only if
13:50
Speaker 1: the merged company is in breach of certain terms, of
13:53
Speaker 1: which I doubt they'd be in breach of because it's
13:54
Speaker 1: actually a pretty easy agreement with which they can abide.
13:58
Speaker 4: And I understand that a lot of these terms Paramount
14:02
Speaker 4: had been offering for months, including releasing 30 films a
14:05
Speaker 4: year in theaters.
14:07
Speaker 1: Yes, you know, they had. And I think in some ways,
14:10
Speaker 1: some of these commitments really aren't a big change from
14:13
Speaker 1: the way they've just always done business. You know, for instance,
14:16
Speaker 1: people are talking about this commitment to release 30 movies
14:19
Speaker 1: to theaters every year. Now, that's release, not make. So
14:23
Speaker 1: it doesn't necessarily have to be a movie that they produce,
14:25
Speaker 1: but they only have to either produce or co-produce 50%.
14:29
Speaker 1: So that's the first thing. And it's really not that
14:32
Speaker 1: different from what they're already each individually doing. So this
14:36
Speaker 1: isn't asking for much from Paramount.
14:39
Speaker 4: And it seemed like California and the states were holding
14:42
Speaker 4: all the cards. Paramount was set to face late fees
14:46
Speaker 4: of $ 7 million a day if it didn't close the
14:49
Speaker 4: deal by the end of the month and $ 7 billion
14:53
Speaker 4: if the deal fell apart. The states beat Paramount in court,
14:56
Speaker 4: winning a court-ordered pause on the merger and It seemed
15:00
Speaker 4: like they had an edge in the negotiations at this point.
15:03
Speaker 1: Absolutely. It was a very odd situation because I think
15:06
Speaker 1: the states very much had leverage, not because their case
15:09
Speaker 1: against the merger was so strong, because honestly, it wasn't
15:12
Speaker 1: that strong, but because time. Time and the financial aspects
15:16
Speaker 1: were on their side. And I really think that they
15:18
Speaker 1: could have waited this out. It would have put more
15:20
Speaker 1: pressure on Paramount. Maybe they might have gotten better terms.
15:23
Speaker 1: But then Paramount, knowing, I believe, that it didn't have
15:26
Speaker 1: the leverage it needed for a settlement negotiation to come
15:28
Speaker 1: out favorably, threatened to leave California. And I think that's
15:32
Speaker 1: what did it, because that would have been devastating on
15:34
Speaker 1: the state and had an impact on the state's economy,
15:37
Speaker 1: as well as so many employees and people who live there.
15:40
Speaker 1: And I think it was that threat that the Attorney
15:43
Speaker 1: General of California called blackmail. I think of it as
15:45
Speaker 1: just trying to do what they can to get leverage
15:48
Speaker 1: that did give them the leverage to get to this
15:50
Speaker 1: settlement and to get to it when they did, which
15:52
Speaker 1: was mid-September. And I kind of thought late September would
15:55
Speaker 1: be more likely.
15:56
Speaker 4: Apparently, pressure was on the Attorney General Bonta from the governor, L.A.
16:01
Speaker 5: 's mayor.
16:02
Speaker 4: I mean, would Paramount really have left California in the end?
16:06
Speaker 1: It really would have been a major disruption to their
16:08
Speaker 1: business and actually quite an endeavor and very expensive for them.
16:12
Speaker 1: And that was the big question. You know, it was funny.
16:14
Speaker 1: I had so many clients saying, are they going to
16:16
Speaker 1: do this or not? Is this a real threat or not?
16:18
Speaker 1: And I'd say, look, I'm not in their head. I
16:20
Speaker 1: can't say what the company would or wouldn't do, but
16:22
Speaker 1: it was enough of a threat. There was enough of
16:24
Speaker 1: a concern that it did what they wanted it to do,
16:27
Speaker 1: which was to get a settlement out of the states
16:29
Speaker 1: and a settlement that's widely favorable in my view to Paramount.
16:33
Speaker 4: So California had its reasons for this. But the other states,
16:38
Speaker 4: and there were several states that were holding out, including
16:40
Speaker 4: New York, Connecticut, Massachusetts, and Minnesota. According to Bloomberg sources,
16:45
Speaker 4: they decided that the expense of litigating without California would
16:50
Speaker 4: be too much.
16:51
Speaker 1: You know, I have to say that if you look
16:53
Speaker 1: at the cases where states have been the plaintiffs and
16:55
Speaker 1: alone without the federal government or without private parties, it
16:59
Speaker 1: tends to be pretty big groups of states. You have 12.
17:02
Speaker 1: You have 14. I think it was something like 14 states.
17:05
Speaker 1: When the state sued to block T-Mobile and Sprint, you
17:07
Speaker 1: had a pretty big group of states going after Nexstar
17:10
Speaker 1: and Tegna and also a big group of states going
17:12
Speaker 1: after Live Nation. You know, they have one or two
17:14
Speaker 1: antitrust attorneys. They don't have the money. They don't have
17:17
Speaker 1: the physical resources. And then they're going up against major
17:19
Speaker 1: heavy hitter lawyers on the other side and unlimited resources, essentially.
17:24
Speaker 1: And California was leading. So you have to remember that
17:27
Speaker 1: this litigation now has been going for quite some time.
17:29
Speaker 1: California has been in the lead. It is a little
17:31
Speaker 1: bit difficult for another state to take over that role
17:34
Speaker 1: and jump in. So I do think that once California
17:38
Speaker 1: and other states had decided that they were going to settle,
17:41
Speaker 1: the other states really had to, as did the Writers
17:43
Speaker 1: Guild of America, which was also a plaintiff.
17:45
Speaker 4: Yeah, the Writers Guild apparently was blindsided.
17:48
Speaker 1: The settlement they reached is even weaker. And I think
17:51
Speaker 1: they must have been blindsided because their concerns about harm
17:54
Speaker 1: were to writers markets, writers of movies. writers of television shows,
17:58
Speaker 1: writers that are signed on contract with studios. And instead,
18:01
Speaker 1: what they agreed to was some guarantee of employment for
18:04
Speaker 1: CBS News Bureau, which is different from the areas which
18:07
Speaker 1: they said would be harmed.
18:08
Speaker 4: So now let's talk about that. You have now Paramount
18:11
Speaker 4: is going to control both CBS News, and we've seen
18:14
Speaker 4: what's happened at CBS News. So they'll control CBS and CNN.
18:19
Speaker 4: And apparently the Connecticut Attorney General was really pushing for divestiture.
18:23
Speaker 4: of those networks. But Ellison would not agree to that.
18:27
Speaker 4: So now there's going to be an independent editorial oversight board.
18:31
Speaker 4: What does that mean?
18:33
Speaker 1: Well, you know, let's just say that it's really something
18:36
Speaker 1: that's quite unenforceable. So it's a board made up of
18:39
Speaker 1: five people. They have to be journalists, retired or currently
18:43
Speaker 1: acting journalists. And there are a bunch of qualifications written
18:45
Speaker 1: into the settlement as to what that means to be
18:47
Speaker 1: an experienced journalist. And no more than two can be
18:50
Speaker 1: from the same political party. But here's the kicker. They
18:54
Speaker 1: will be appointed by Paramount. So Paramount will be picking
18:57
Speaker 1: these five people, even though no more than two can
19:00
Speaker 1: be from one political party. So they're picking the editorial
19:03
Speaker 1: board that's supposed to oversee their own business. That seems
19:06
Speaker 1: to me a little bit ridiculous if you really wanted
19:09
Speaker 1: this neutral editorial board. But the board is intended to
19:13
Speaker 1: establish guiding editorial principles. And those principles are supposed to
19:17
Speaker 1: be based on CBS News' and CNN's standards and practices now,
19:22
Speaker 1: before they close. So whatever their practicing policies are now,
19:26
Speaker 1: they're supposed to stick to those, and this board is
19:28
Speaker 1: supposed to make sure that they stick to those. And
19:30
Speaker 1: then they're going to resolve disputes if they arise between
19:33
Speaker 1: CBS News or CNN and the management of the combined company.
19:36
Speaker 4: And so let's say there's pressure on CNN to take
19:39
Speaker 4: a conservative turn to, let's say, have more stories in
19:42
Speaker 4: favor of the administration. What can be done? Anything?
19:45
Speaker 1: Well, the first thing that would happen is if there
19:47
Speaker 1: was a dispute, if the journalists object. to this, then
19:50
Speaker 1: this dispute between those journalists and the Paramount management would
19:54
Speaker 1: be resolved by this editorial independence board. Now, there's another
19:58
Speaker 1: layer that oversees this entire agreement. There's a monitor, right?
20:02
Speaker 1: There will be an internal monitor and then also an
20:04
Speaker 1: outside monitor chosen by the states and Paramount together to
20:08
Speaker 1: And then that monitor could step in. But the thing is, June,
20:12
Speaker 1: if there's some problem, if whatever's happening is considered a breach,
20:16
Speaker 1: really the only way to fix it, the only way
20:18
Speaker 1: to make the company act differently would be then to
20:20
Speaker 1: go back to court. You'd need the states. You'd need
20:22
Speaker 1: the attorney generals to agree. They'd have to bring this
20:25
Speaker 1: up back in court in front of the judge that
20:27
Speaker 1: was overseeing this litigation to start. And, you know, that's
20:30
Speaker 1: a lot. And I'm not so sure I see something
20:32
Speaker 1: like that happening.
20:33
Speaker 4: Paramount is paying so much in this deal. I've read
20:36
Speaker 4: the combined company is expected to have about $ 80 billion
20:40
Speaker 4: in debt. Is this deal going to be profitable for them?
20:42
Speaker 1: Well, that's the big question now. I will say this,
20:46
Speaker 1: that those assets, the Time Warner assets, have a checkered
20:49
Speaker 1: history in terms of their acquisition and success. Those assets,
20:52
Speaker 1: the Warner Brothers assets, have been bought and sold numerous times,
20:56
Speaker 1: and the buyers have not had success. And the craziest
20:59
Speaker 1: thing is that this is such a full-circle case, June,
21:02
Speaker 1: because the last time those assets were sold— was when
21:04
Speaker 1: AT & T acquired Time Warner and the Department of
21:07
Speaker 1: Justice went to court to try to challenge that. And
21:10
Speaker 1: the assistant attorney general in charge of antitrust that challenged
21:13
Speaker 1: the deal was Makan Delrahim, who is now the general
21:16
Speaker 1: counsel at Paramount that guided this through. And at the time,
21:19
Speaker 1: he went to court against AT & T and Time
21:21
Speaker 1: Warner because he insisted that they divest CNN. And they said, no,
21:25
Speaker 1: we won't do that. and AT & T won in court. Now,
21:28
Speaker 1: sadly for them, they did not make a success of
21:30
Speaker 1: it with these assets, as has been the history. I'll
21:33
Speaker 1: sort of think of them as cursed. But it's interesting
21:36
Speaker 1: to me that he's come back around to be involved
21:38
Speaker 1: again in the control of CNN.
21:41
Speaker 4: And on the opposite side, which often happens when people
21:44
Speaker 4: go from being lawyers for the federal government into private practice. Now,
21:50
Speaker 4: also on the federal level, there was a lot of
21:52
Speaker 4: pressure to to let this deal go through. I mean, Ellison,
21:57
Speaker 4: father and son, very close to Trump. There was lobbying there.
22:01
Speaker 4: And we saw what happened with the Live Nation antitrust
22:05
Speaker 4: case where it fell apart when trial had already started
22:09
Speaker 4: because of a deal made in D.C. So in a
22:12
Speaker 4: different administration, do you think that the feds would have
22:15
Speaker 4: challenged this?
22:16
Speaker 2: Yes.
22:16
Speaker 3: Yes.
22:17
Speaker 5: I heard rumors.
22:18
Speaker 1: I don't know if they're true or not, that there
22:19
Speaker 1: were DOJ staffers. And, you know, the staffers tend to
22:21
Speaker 1: be there a long time. you know, they're neutral politically,
22:24
Speaker 1: that the staffers were opposed to this and the decision
22:27
Speaker 1: was made over their head to settle. I do think,
22:29
Speaker 1: particularly if it had been the previous Biden administration, that
22:32
Speaker 1: there probably would have been either, you know, a challenge
22:35
Speaker 1: that was settled with a stronger settlement than this. I
22:38
Speaker 1: think they would have demanded some divestiture, particularly of some
22:41
Speaker 1: cable channels, or they would have actually gone to court
22:43
Speaker 1: to try to block it.
22:45
Speaker 4: And looking at the big picture, Jen, How is the
22:48
Speaker 4: Trump administration handling antitrust enforcement? Are they being any more aggressive?
22:55
Speaker 4: Although I suppose this case tells you they're not.
22:58
Speaker 1: The answer would be no. And I can give you
23:00
Speaker 1: some data that backs that up so far in 2026
23:03
Speaker 1: as we come into the fourth quarter. there has been
23:05
Speaker 1: not one single challenge without a simultaneous settlement to a
23:08
Speaker 1: deal by the Department of Justice. I don't even know
23:10
Speaker 1: if there's been one by the FTC. Trump's FTC has
23:13
Speaker 1: challenged a few small healthcare deals and one deal related
23:17
Speaker 1: to do-it-yourself adhesive for construction, Gorilla Glue. So there have
23:22
Speaker 1: been very few challenges across the board since the Trump
23:26
Speaker 1: administration enforcers took over by both the FTC and DOJ.
23:29
Speaker 1: But really what's glaring is this year, nothing at all
23:31
Speaker 1: by the Department of Justice. So When you look at
23:34
Speaker 1: it that way, it's a very business-friendly enforcement era that
23:37
Speaker 1: we're in on the M & A side right now. And,
23:40
Speaker 1: you know, they're beginning also to settle some of the
23:42
Speaker 1: monopolization suits as well that they inherited when they took over.
23:45
Speaker 1: And I think we'll probably see a settlement of a
23:48
Speaker 1: suit that's been running for a few years now against Apple.
23:51
Speaker 1: We may see a settlement of an FTC suit against Amazon,
23:54
Speaker 1: the ones that are left over that were started by
23:57
Speaker 1: the Biden administration.
23:58
Speaker 4: So they're putting their efforts into settling cases rather than
24:01
Speaker 4: bringing new ones. Always great to have you on, Jen.
24:04
Speaker 4: Thanks so much. That's Bloomberg Intelligence Senior Litigation Analyst Jennifer Rhee.
24:10
Speaker 4: Coming up next on the Bloomberg Law Show, President Trump
24:13
Speaker 4: is using a familiar argument to justify the building of
24:18
Speaker 4: his triumphal arch. He says it's a matter of national security.
24:22
Speaker 4: I'm June Grosso, and this is Bloomberg.
24:27
Speaker 3: It's the only city in the world that's of great
24:30
Speaker 3: importance that doesn't have a triumphal arc.
24:33
Speaker 2: You know what that is.
24:34
Speaker 4: And so to cure that, in October of last year,
24:38
Speaker 4: President Trump announced that he would build a triumphal arch
24:41
Speaker 4: in D.C. on Memorial Circle at the entrance to Arlington
24:46
Speaker 4: National Cemetery.
24:47
Speaker 3: This one is going to blow them all away. The
24:49
Speaker 3: one that people know mostly is the Arc de Triomphe
24:52
Speaker 3: in Paris, France. And we're going to top it by,
24:56
Speaker 3: I think.
24:57
Speaker 5: A lot.
24:58
Speaker 4: They're certainly going to top the Arc de Triomphe in
25:02
Speaker 4: one way. At 250 feet tall, Trump's arch will tower
25:06
Speaker 4: over the Parisian arch. And it will dwarf the nearby
25:10
Speaker 4: Lincoln Memorial, which stands at only 99 feet. Opposition has
25:15
Speaker 4: been growing to the arch. which, unlike every other monument
25:19
Speaker 4: in D.C., does not have congressional approval. A group of
25:23
Speaker 4: Vietnam veterans are suing to stop it, saying it would
25:27
Speaker 4: obstruct the historic sight lines between the Lincoln Memorial and
25:31
Speaker 4: Arlington House. And then suddenly, in a post last Sunday,
25:35
Speaker 4: Trump said that at the strong request of the U.S.
25:39
Speaker 4: military and for national security purposes, the arch will also
25:44
Speaker 4: be used as a top-grade military complex. Those two words,
25:49
Speaker 4: national security, are Trump's favorite go-to excuse to justify the
25:54
Speaker 4: actions of his administration, whether it's immigration restrictions, sweeping tariffs—
26:00
Speaker 4: the White House ballroom, or just this week, a ban
26:04
Speaker 4: on the media. Joining me is constitutional law expert David Super,
26:08
Speaker 4: a professor at Georgetown Law. David, so now the Arch
26:12
Speaker 4: is going to have drones and snipers and store large
26:16
Speaker 4: quantities of ammunition. I've lost track of how many times
26:20
Speaker 4: the Trump administration has used the excuse of national security.
26:26
Speaker 2: Well, there are a bunch of cases from the Supreme
26:29
Speaker 2: Court and elsewhere going back many years suggesting that the
26:34
Speaker 2: court should defer to the president on national security matters.
26:38
Speaker 2: And it's easy to understand why. But the assumption in
26:41
Speaker 2: those cases is that the national security claim is at
26:45
Speaker 2: least plausible. And what I think he is doing here
26:49
Speaker 2: is showing that if you're willing to lie without constraint...
26:55
Speaker 2: that you can make any of these legal categories irrelevant.
26:59
Speaker 2: We've seen that in many other ways where he's used
27:04
Speaker 2: money from one program to address a completely different passing
27:10
Speaker 2: fancy of his. And he's, I think, now going to
27:14
Speaker 2: force the courts to reconsider deference to the president on
27:17
Speaker 2: national security because they certainly are not going to want
27:21
Speaker 2: to be dragged into something as absurd as as you
27:26
Speaker 2: get to build an arch anytime you put a sniper
27:28
Speaker 2: on it.
27:29
Speaker 4: Just the other day, the administration used national security as
27:33
Speaker 4: part of the reason why the White House was denying
27:37
Speaker 4: press passes to those three outlets. And the judge there
27:42
Speaker 4: rejected those claims, looked at the sequence of events, and
27:46
Speaker 4: noted that that only came up after a suit had
27:49
Speaker 4: been filed. But the Supreme Court didn't look behind the
27:52
Speaker 4: national security claims in the ballroom case.
27:56
Speaker 2: The Supreme Court's decision on the ballroom was based on standing.
28:00
Speaker 2: The majority stayed as far away from the merits as
28:03
Speaker 2: they humanly could. The dissent from the Chief Justice was
28:07
Speaker 2: very happy to talk about the merits and found it
28:09
Speaker 2: was completely lawless. I think part of the reason the
28:13
Speaker 2: court is finding procedural grounds so attractive in ruling for
28:17
Speaker 2: the president is because the president's arguments are increasingly absurd.
28:22
Speaker 4: The problem is that all the agencies that are reviewing
28:25
Speaker 4: this are populated by Trump appointees. So there's no independent
28:31
Speaker 4: review of this. So suppose he gets now Pete Hegseth
28:35
Speaker 4: to say that we really need this. We really need
28:37
Speaker 4: this in the middle of a traffic circle in DC.
28:40
Speaker 5: Yeah.
28:41
Speaker 2: I mean, I've lived in DC for many, many years
28:45
Speaker 2: and I've probably entered DC by that traffic circle twice
28:50
Speaker 2: in a couple decades. It's not like an invader would
28:55
Speaker 2: have to go through that traffic circle. There are only
28:58
Speaker 2: about 200 other ways they could come in. Do we
29:01
Speaker 2: get 200 triumphal arcs to protect us at every possible location?
29:06
Speaker 2: I think there's going to be a president coming up,
29:09
Speaker 2: maybe President Trump, maybe one of his successors, who's going
29:13
Speaker 2: to really regret his invoking national security in such frivolous
29:19
Speaker 2: ways because the courts are going to feel that they
29:22
Speaker 2: have to stop giving deference on claims of national security
29:26
Speaker 2: because they get lied to too often. And there will
29:29
Speaker 2: be a situation where there really are delicate national security
29:32
Speaker 2: issues and courts are going to be uncomfortable giving them
29:36
Speaker 2: a blank check.
29:37
Speaker 4: So what about Congress? The Democratic congressman, Don Beyer, whose
29:42
Speaker 4: Northern Virginia district includes the Arlington National Cemetery... said that
29:47
Speaker 4: making the Arch an ammunition depot for snipers would place
29:52
Speaker 4: a large weapons cache within feet of thousands of tourists, pedestrians, cyclists,
29:57
Speaker 4: and drivers on major commuter traffic, thoroughfares, and metros' blue line. So,
30:02
Speaker 4: I mean, what can Congress do?
30:04
Speaker 2: Congress, Congress. Oh, yes, I remember Congress. Congress can say
30:08
Speaker 2: this is illegal, but they already have. There's no law
30:11
Speaker 2: allowing it, and there's a statute that goes back to
30:14
Speaker 2: the early days of the Republicans saying you cannot spend
30:17
Speaker 2: appropriated funds on anything other than the purposes for that appropriation.
30:23
Speaker 2: So it's already illegal, and asking Congress to step in
30:27
Speaker 2: is effectively asking them to say it's doubly illegal or
30:30
Speaker 2: it's triply illegal. You don't get extra points for violating
30:33
Speaker 2: the law three times.
30:35
Speaker 4: Yeah, I mean, the federal law requires congressional approval for
30:38
Speaker 4: monuments on federal land in D.C., the Commemorative Works Act
30:42
Speaker 4: and 40 U.S.C. Section 8106. So they require express approval
30:48
Speaker 4: from Congress. So the administration claims a 1925 law that
30:53
Speaker 4: allowed for the construction of a pair of 166-foot columns
30:57
Speaker 4: at that location that were ultimately never built is their authorization.
31:02
Speaker 2: Well, there's a lot of problems with that. Number one,
31:05
Speaker 2: they don't want to build what that law called for.
31:08
Speaker 2: They've got their own fancy plan. Number two, they still
31:12
Speaker 2: are using federal money to arrange this, and they don't
31:17
Speaker 2: have a valid appropriation for it. And under the Constitution,
31:21
Speaker 2: federal money shall not be spent unless Congress provides an
31:24
Speaker 2: appropriation for it. They probably could have gotten one through
31:27
Speaker 2: this Congress, but they didn't ask.
31:30
Speaker 4: Let's talk about standing, which has been coming up a
31:33
Speaker 4: lot in Supreme Court cases recently. So as you mentioned,
31:37
Speaker 4: in the ballroom case, five of the Supreme Court's conservative
31:41
Speaker 4: justices said the National Trust for Historic Preservation didn't have
31:46
Speaker 4: standing to challenge the White House ballroom. Do you think
31:50
Speaker 4: the Vietnam War veterans challenging the Arch have standing?
31:55
Speaker 2: I suspect they do, but I think it's almost certain
31:58
Speaker 2: that somebody does. Because this is not just an aesthetic problem.
32:04
Speaker 2: It is a safety problem. It is a traffic snarls problem.
32:09
Speaker 2: So I think you just get a commuter from Arlington
32:13
Speaker 2: who says, I don't want my commute messed up. That's
32:17
Speaker 2: clearly an injury. In fact, that gives them standing. There
32:20
Speaker 2: just wasn't anyone with quite that kind of a personal
32:24
Speaker 2: inconvenience argument in the White House ballroom case. But this
32:29
Speaker 2: is out where people go, and it's going to make
32:32
Speaker 2: it much harder for people to go.
32:34
Speaker 4: Construction was expected to begin this month, but Judge Tanya Chutkin,
32:39
Speaker 4: who's overseeing the veterans case, ruled that the administration has
32:43
Speaker 4: to give 48 hours notice before doing anything at that site.
32:48
Speaker 4: Congressman Beyer has said that he's seen workers operating heavy
32:52
Speaker 4: equipment there. Might the administration proceed with construction despite the
32:57
Speaker 4: judge's order?
32:59
Speaker 2: Yes, given their increasing willingness to violate court orders, their
33:03
Speaker 2: handling of the Kennedy Center situation suggests that they don't
33:07
Speaker 2: care very much about court orders. Their response to many
33:11
Speaker 2: court orders about their immigration activities suggests they don't care
33:15
Speaker 2: very much. So I can certainly see them doing it.
33:19
Speaker 2: If I were the administration, Judge Shutkin would not be
33:22
Speaker 2: my choice for the first judge to get into a
33:24
Speaker 2: big fight with. She'd be pretty much my last choice.
33:27
Speaker 2: But I'm not them. And this is clearly something the
33:31
Speaker 2: president is rather emotional about. And there may not be
33:34
Speaker 2: anyone that can tell him this is madness.
33:39
Speaker 4: Judge Chutkan is famous for the quote, presidents are not
33:42
Speaker 4: kings and a plaintiff is not president, when she ruled
33:46
Speaker 4: against Trump in 2021, allowing the January 6th Select Committee
33:52
Speaker 4: to access his White House internal files. So she's definitely
33:56
Speaker 4: not a pushover, but people ask, what can a judge
33:59
Speaker 4: do against the president? But can a judge find the
34:03
Speaker 4: people who are working on the site or the interior
34:07
Speaker 4: secretary in contempt and stop the construction that way?
34:12
Speaker 2: Certainly, there's a lot that can be done in this case.
34:15
Speaker 2: They could order people to not work on it, and
34:19
Speaker 2: if they do hold them in criminal contempt, the president
34:22
Speaker 2: could then pardon them. but they can also hold them
34:25
Speaker 2: in civil contempt unless and until they repair the damage
34:29
Speaker 2: that was done to the traffic circle or any surrounding
34:32
Speaker 2: areas contrary to the order. And the president cannot pardon
34:37
Speaker 2: people for civil contempt, so the judge could effectively force
34:41
Speaker 2: them to undo whatever they do or put people in
34:44
Speaker 2: jail until they change their minds.
34:47
Speaker 4: Next step is the National Capital Planning Commission for final approval,
34:51
Speaker 4: but that's pact with Trump appointees.
34:54
Speaker 2: All these laws were written on the assumption of good faith.
34:57
Speaker 2: They were written on the assumption that you would put
35:00
Speaker 2: people who are experts, who are representative of public sentiment,
35:05
Speaker 2: that you would have some partisan balance in these boards
35:09
Speaker 2: and that they would be loyal to the mission of
35:11
Speaker 2: the law. None of that works if a condition for
35:16
Speaker 2: being appointed to these boards is that you are unswervingly
35:20
Speaker 2: politically loyal to the president. In that case, having these
35:23
Speaker 2: boards around doesn't serve the purposes of Congress and indeed
35:28
Speaker 2: just waste time and money.
35:30
Speaker 4: Let's say Judge Chutkan issues an order to stop construction
35:33
Speaker 4: and the construction goes forward. I mean, might the Supreme
35:37
Speaker 4: Court even step in then?
35:39
Speaker 2: My sense is that the Supreme Court is very conservative.
35:44
Speaker 2: They're fairly deferential to the president, but they're not stupid people.
35:48
Speaker 2: And Triumphal Arch... that serves no particular purpose, that is
35:54
Speaker 2: justified on the most laughable national security grounds, and that
35:59
Speaker 2: is being built in contradiction to a court order, I
36:02
Speaker 2: suspect will be a bit too much for most of
36:05
Speaker 2: the justices.
36:06
Speaker 4: Except for two.
36:07
Speaker 2: Except for two. Maybe three.
36:09
Speaker 5: Yeah.
36:09
Speaker 2: I also think that at some point, someone, at least privately,
36:14
Speaker 2: is going to note that generally you don't build a
36:17
Speaker 2: triumphal arch after losing a war. That's the custom.
36:21
Speaker 4: Also, with all the effort being made to have his
36:24
Speaker 4: name on the Kennedy Center, for example, there's no permanence
36:28
Speaker 4: even if his name does go on the building. If
36:31
Speaker 4: the next president is a Democrat, his name will likely
36:34
Speaker 4: come down.
36:34
Speaker 2: I mean, American politics has a shorter and shorter vision
36:39
Speaker 2: into the future. We think more and more about the
36:41
Speaker 2: here and now, and maybe it's good enough to him
36:45
Speaker 2: to be commemorated for two years, and after that he'll
36:50
Speaker 2: be gone, so maybe he doesn't care. But when you
36:54
Speaker 2: put your name on things in such blatantly illegal ways,
36:58
Speaker 2: you really don't give your successors any choice but to
37:01
Speaker 2: strip them off.
37:02
Speaker 4: Thanks so much for joining me, David. That's Professor David
37:05
Speaker 4: Super of Georgetown Law. And that's it for this edition
37:08
Speaker 4: of the Bloomberg Law Show. Remember, you can always get
37:11
Speaker 4: the latest legal news on our Bloomberg Law Podcast. You
37:14
Speaker 4: can find them on Apple Podcasts, Spotify, and at www.bloomberg.com
37:20
Speaker 4: slash podcast slash law. And remember to tune into the
37:23
Speaker 4: Bloomberg Law Show every weeknight at 10 p.m. Wall Street time.
37:28
Speaker 4: I'm June Grosso, and you're listening to Bloomberg.