Host (possibly Charlie Sykes) (3:26)

The official rationale for this investigation, as I understand, or at least based on what Carr has previously said, is that this is an investigation into ABC's DEI policies. Right. Didn't he say something like that a month ago? Like.

Sunny Bunch (3:42)

Yes, yes, there's, there was that. I mean, look, and there are questions of, there are questions of consolidation and. Right. But this also comes in the, in the midst of another situation with the FCC being asked to judge the propriety of a merger. Right. So we have the Paramount CBS Viacom deal with Warner Brothers that is going to go through. And one of the things that has come up as this deal has kind of percolated through the system is that there's an FCC rule that requires no company that owns a broadcast entity to be more than 25% foreign owned. Right. Right. And of course, the deal that the Ellison family has struck for Paramount to buy Warner Brothers is a $110 billion deal that is 38.5%, I believe, funded through Middle east sources, with another 10% kind of coming through passive foreign sources. So it's roughly 49.5% foreign capital is going to be involved in this deal whether or not the FCC approves it. I'm going to go out on a limb and say that they're going to sign off on this. You know, they have, they have made it very clear through not just this, but also the deal for nexstar and Tegna that they are very willing to bend rules about percentages of ownerships to make the administration happy.

Host (possibly Charlie Sykes) (5:06)

Yeah. I was going to say one thing you didn't mention is that in this filing for the FCC, before the FCC, Paramount actually asked them to approve up to 100% foreign ownership. Right. Like, just in case, you know, stock valuations or whatever fluctuate, they want to have the wiggle room to have 100% foreign ownership. Sorry to interrupt.

Sunny Bunch (5:27)

Sure.

Host (possibly Charlie Sykes) (5:27)

Go on.

Sunny Bunch (5:28)

And it's funny. It's. I mean, I assume this is, you know, kind of standard corporate, like, well, just in case, whatever. But it is interesting because, you know, we've. We've discussed this a little bit before, but the Ellison family is theoretically on the hook for the entirety of this deal. Right? This is what they said when they bought it. We will Backstop the entire $110 billion deal with Oracle stock. Oracle, of course, very valuable company. Larry Ellison, who is David Ellison's father, is very wealthy man. He can theoretically do all this, but I don't think he wants to because that's, you know, if he, if he wanted to, he would just do it instead. They're getting all of this foreign money. So I don't know. I. You know, there's a. There are a lot of little interesting wrinkles here, but it just goes to show, again, it shows that the. The FCC is being used by the federal government, by the Trump administration, to aid friends and punish enemies. And I just think, I, I don't see how anyone. Look, we could play the hypocrisy game forever, right? But this was a administration that rode into office on, you know, we are the free speech party at all the free speech podcasters and bloggers saying, Trump, Trump, free speech ban. And this is just it, you know, it's maddening.

Host (possibly Charlie Sykes) (6:41)

Yeah, I was gonna say. I. Actually, before we recorded this, I went and looked up Donald Trump's statement about Brendan Carr, again his pick for chair of the fcc. And the statement announcing him was, commissioner Carr is a warrior for free speech and has fought against the regulatory lawfare that has stifled Americans freedoms and held back our economy. So that was the. The way he was promoted in any event. And meanwhile, Carr has, as you point out, been doing Trump's bidding, has threatened the licenses at ABC and elsewhere multiple times, not just because of DEI or whatever, but also because of Jimmy Kimmel. When was that? That was like, last fall. I'm trying to remember when it was. So this has been going on for a while. This free speech warrior has actually been using the weaponry of the state to try to cr. Crack down on Trump's political enemies. So. Okay, so a couple questions for you. One thing that I don't quite understand is, like, what does it mean to have your broadcast license under review? Like, what happens if it's not renewed?

Sunny Bunch (7:53)

Oh, theoretically, they could be forced to sell the stations. You know, it's also a little bit unclear to me what the actual punishment here would be. I find it very hard to believe that they would break up Disney, Disney's broadcast empire over this, but Disney only owns a certain number of them, so maybe they would have to spin those off. It's one of these things that I think would definitely get held up in the courts for such a length of time that whoever the next administration is, unless it's, you know, President J.D. vance would probably let it die. But, you know, theoretically, Disney could be forced to sell off the ABC stations that they own. They could be, you know, they could lose the ability to own any broadcast. And this is the other thing. Right. The argument that the Trump backers will say is these are public airwaves, they're owned by the public. We have a public interest in making sure that, you know, what we see on them is good and fair and correct. Right. And again, like the hypocrisy angle will get you nowhere. But just, just say, well, okay, so you want the Fairness Doctrine? Is that what we want? Is that what we're bringing back? Is that what we're doing here? It's ridiculous. It's all ridiculous.

Host (possibly Charlie Sykes) (9:09)

Can you explain what the Fairness Doctrine is or how it could be implemented today?

Sunny Bunch (9:13)

The Fairness Doctrine was abolished in 1987. Right. Reagan administration struck it down. No violation of First Amendment rights by requiring certain things to appear or not appear. And this, this helped create the boom of AM talk radio for Republicans. Right. So Republicans dominate AM talk radio. And for years, for years, liberals have been like, we need to reinstate the Fairness Doctrine to get, you know, a liberal radio network going. Okay, fine, terrible. I have my own. Also a terrible idea. Shouldn't, shouldn't have that either. There are still rules about equal time. Right. If you're a politician and you are

Host (possibly Charlie Sykes) (9:52)

invited off to James Talarico. James Talarico going on Stephen Colbert. Yeah.

Sunny Bunch (9:58)

So this, this happened with James Tallarico and Stephen Colbert. And there was, there is an argument to be made that these rules do not and should not apply to late night hosts. And for, for a long time they weren't really. There was not an equal time presumption with late night hosts. And the FCC said, no, we're at you. If you're going to have Talarico on, you have to have Jasmine Crockett on. Right. And that was, you know, there was some jujitsu there going on trying to turn the Democratic coalition against, against itself by, by making it about that. But there is, there is still an equal time rule. How you decide to enforce that kind of again, depends on, you know, the administration and the shows in question.

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Sunny Bunch (12:02)

But the, the, you know, the long and the short of it here is Brendan Carr wants to control what is on the airwaves. He wants, he wants to control it and he is doing this because that's what the President wants. And you know, we can talk about jawboning and the, the efficacy of that and the legality of that, but if you believe in free speech, if you are the free speech warrior that Donald Trump said you are, you, I can't, I cannot see a rationale for this.

Host (possibly Charlie Sykes) (12:33)

Also, to your point about like, oh, it would probably be a protracted court battle. It seems like what's happening here is that a lot of these holding companies are like preemptively capitulating. So they're not getting to the point where there's going to be a threat that their license is actually taken away and then they challenge it in court. They're just saying, fine, we're not going to air the James Stellarico interview. Fine, we're going to suspend Jimmy Camel for a few episodes until there's a massive outcry against that. And you know, I don't know exactly what they're going to do in response to what ABC might do in response to this latest threat here. So, you know, I don't know what they're going to do potentially because they feel threatened here. I do know that it certainly seems like CBS doesn't feel so threatened or at least Paramount doesn't feel so threatened. Like they seem to potentially be in violation with this deal, with this merger of FCC policy. And rather than like working around it and trying to find alternative financing, they're just saying, please give us an exemption. So which I think speaks to exactly your point about this is about rewarding friends and punishing enemies. It's not about any sort of fair application of the law.

Sunny Bunch (13:55)

What's the saying for my friends, everything for my enemies, the law like that. That is very much what is happening here. And again, if you look at both the nexstar Tegna deal, which there's a rule that says companies are not allowed to own more than, I think it's 60% of local or stations in local markets, this deal would be much more than that. And they have applied for a waiver to that rule for the fcc. The theory for conservatives is that the more conservative local stations are friendlier to Trump. So they want this deal to go through. And again with the CBS deal here, they're asking for this exemption because the theory is CBS News under Donald Trump in 60 minutes, even with that nasty Norah O' Donnell asking all those mean questions about the, the, the shooters, the would be shooters manifesto on 60 Minutes, you know, the theory there is, oh, that will be better for Trump. So they want it to go through. It is again, just asking for favors and getting them and Brendan Carr being like, yeah, sure, why not? What, what do you want from me? I'm just, I'm just the hatchet man here. I'm just, just signing, I'm just doing what I'm told, just following orders.

Host (possibly Charlie Sykes) (15:05)

We don't know how the FCC is going to respond to this Paramount request. Like maybe they'll surprise us all and they'll say no, the law says, you know, no foreign ownership over 25%. You don't get an exemption and get out of jail free card here just because the owners are buddies with Trump. It would be great if they surprised us all with that. Yeah, I'm not expecting it. I mean, the other piece of this that I've been wondering about, just sticking with the foreign ownership with Paramount piece is I thought these kinds of Foreign investments in big important American companies, not only, you know, if there are communications companies might trigger an FCC review, but also might trigger a CFIUS review. And my vague understanding from reading some of the coverage is that it won't trigger a CFIUS review. For those watching cfius, I forget what it stands for, but it's, it's, it's a review basically to say like is, does this threaten our national strategic interest or something if there is a foreign owner of, of the particular company in question.

Sunny Bunch (16:19)

Okay, so CFIUS stands for the Committee on Foreign Investment in the United States.

Host (possibly Charlie Sykes) (16:24)

There you go.

Sunny Bunch (16:25)

That's, that's what, that's what CFIUS is. And it is essentially there are a bunch of different things that can trigger a CFIUS review. Right? There is, the big one is foreign control of a, of a United States company, of a foreign control. If a foreign entity wants to buy United States company kind of any US Business, it could trigger a CFIUS review. It's usually pretty limited to tech companies, defense companies, and defense adjacent companies like steel companies, you know, manufacturing, that sort of thing. Real estate was a big one. Real estate, of course, which was a, you know, a big kind of. People were freaked out. China's buying all the land. Even you go further back, Japan's buying all the land. The, so that, that's part of it. The argument, the argument that is going to be made and that is being made by the Paramount people is these foreign entities don't actually control any percentage of the company. They have no voting rights in the company. They, that, that will be controlled entirely by the Ellison conglomerate. Right? That's, you know, the, the Redbird, Skydance, Paramount Corporation, they will control all of the voting rights here. There will be no, there will be no element like Saudi Arabia will not be allowed to veto CNN coverage of something. Right? That is, that is the argument that they will, that they will and are making. I mean, look, we can, we can take that. I, that's true. That legally speaking, this is all probably true. The question is, okay, but they still probably are exerting some. They're not investing $40 billion in this company because they are going to make, you know, a couple billion on the other side.

Spinquest Legal Disclaimer / Safeway Announcer (18:11)

Right?

Sunny Bunch (18:11)

Like, this is not, this is not a, this is not, I don't know. The media industry is valuable and that's why people are paying $111 billion for this combined company. But it's not that valuable. And the other question here involves China. So China, of course, a lot of CFIUS reviews, particularly in the first Trump Administration, we're focused on Chinese acquisitions of companies. And Skydance has an interesting relationship with Tencent which is a Chinese media conglomerate that has some dealings with the Chinese military. But there are a lot of weird little tangles there. One that I have always very much enjoyed. Tencent was originally an investor on Top Gun Maverick and this led to Top Maverick's jacket. Do you remember the Taiwan patch controversy, Catherine?

Host (possibly Charlie Sykes) (19:01)

Oh my God, I forgot about that.

Sunny Bunch (19:03)

So there was a, there was a patch on, on Maverick's jacket in the original that you know, celebrated Taiwan that was removed from, from his jacket for the sequel. And there was a big outrage. It's one of the few outrages that I actually supported. Most Internet outrages are dumb, but this one I was very, I was very in favor of. So they, they, they people got very upset about this. And Skydance actually Paramount Skydance actually went in and replace the patch which led Tencent to pull their, their support for the movie which was, was just a weird little interesting side note here. Anyway, Tencent is still an investor in, in Skydance. They still have a relationship. Skydance of course is, is the company that bought Paramount Paramount Skydance is the company that's buying Warner Brothers. The senators Warren and Booker. Senators Elizabeth Warren and Cory Booker have kind of made a big deal out of this. You know, they, they, they wrote a letter calling for review. Here's just a little bit from the letter. As as of early March 2026, Bloomberg has reported that Tencent intends to reinvest several hundred million dollars in the transaction as a passive financial investor. In addition, Tencent Holdings Ltd. Holds an existing minority non voting stake in Paramount Skydance dating to a strategic investment in Skydance Media in January 2018. Tencent has co financed films by Skydance and supported marketing and distribution for the studio's major releases. End quote. And that is like again this is one of these things where like Tencent is a Chinese owned company. They are very much entangled with the state of China. Like it's not, it's not like in America where you know, Disney is Disney and like Tencent is, is a function of the Chinese state to, to a, in a very real way and to have that company involved in ownership of cbs, to say nothing of ownership of Warner Brothers and Superman China. Chinese Superman do. Is that what we want? I don't know. Can we get, we'll get a little xenophobic here. Can we do that? Is that all right? But like it's, but it's a problem. It's a problem for it's a problem for the company. The, the relationship that Tencent has with them is a problem. And they say, well, actually it's not a problem. And because the CFIUS review I believe has to be initiated by the, the Treasury Department, which again is, you know, controlled by the Trump administration, I think that there's a pretty decent chance that if, even if there is a CFIUS review, it will be a minor one and not lead to any negative outcomes for the allies of the administration. Paramount's guidance.

Host (possibly Charlie Sykes) (21:36)

Yeah, and again, like, you don't even have to go the route of a CFIUS review. The FCC just says flat out that you're not supposed to have more than 25% ownership. I think including passive ownership, if I recall correctly, you're not supposed to have more than 25% foreign ownership of a company that has broadcast licenses in the United States. Yeah, I mean, I guess I take your point about like American cultural icons potentially being co opted by the CCP or whatever. I'm more concerned about news coverage. What does it mean if you have a bunch of foreign governments or companies adjacent to foreign governments that may not have voting rights per se, but may have be able to exert some influence over the coverage of CNN for instance, or, or CBS 60 Minutes for that matter? Exactly, exactly. Like, I think there are a lot of concerns there and they're not going to be. Well, I would think that they're, they're not going to be like completely brushed away just because David Ellison and Larry Ellison are friends with Donald Trump. But I can't guarantee that that's what's going to happen. Like maybe we'll have more pro CCP coverage and more, or at least more pressure to have less critical coverage. That's what I'm worried about. I hope it doesn't come to that, but that would be what I would be worried about.

Sunny Bunch (23:03)

It doesn't even have to be favorable. It could just be sins of omission rather than omission, you know?

Host (possibly Charlie Sykes) (23:08)

Right, right, right. Totally agree. Well, we will of course be watching how these cases develop. Will the FCC give in and say there's going to be a nice little exemption for Paramount, Skydance, Warner Brothers, CNN to be almost half owned by foreign governments? Or will they put the American flag in the sand and say, no, these things must be USA owned? Obviously one of those things would create a bigger bill for Donald Trump's friends than the other would. Thanks everyone for watching. Before we go, I have to give one important note, which is that Sam, Tim and Sarah will be in California very very soon and they want to hang out with you. The Bulwark is doing two stage shows, one in San Diego at the Balboa Theater that is happening on May 20th and then the next night they will be in LA at the Novo. If you are in or around Southern California or you've been through thinking about going and having a nice sunny trip to Southern California, go buy your ticket today, reach out to your friends and get a night out planned with your buddies at the Bulwark. Go to the bullwork.com events one more time. That is the bulwark.com events and we will update the show notes to make sure we've got a link for you there too. Thanks everyone for watching.

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Sunny Bunch (25:38)

Hey, good morning.

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