THE ECONOMIST: Streaming giants may be forced to spin off news brands as Trump effect takes hold

A recent Amercian episode of 60 Minutes began with items on medical-research funding, Islamist terrorism and Japan’s population crisis. But its biggest story was delivered in the final 60 seconds.

“Our parent company, Paramount, is trying to complete a merger,” the correspondent, Scott Pelley, explained to the show’s seven million or so viewers.

“The Trump administration must approve it. Paramount began to supervise our content in new ways.”

The on-air allegation of editorial meddling exposes the rift that has opened between the famous news brand and its Hollywood owner. It also exemplifies a broader problem for media firms.

As American politics has become polarised and, with Mr Trump’s return, vindictive, news organisations that were once seen as crown jewels in their owners’ portfolios are increasingly viewed as liabilities.

Century-old film and TV company Paramount has struggled in the streaming era and agreed last year to be acquired by Skydance Media, run by tech heir David Ellison in a deal which also includes Network Ten in Australia.

That deal has hit a problem in the form of a lawsuit from Mr Trump, who says that the US version of 60 Minutes misleadingly edited an interview last year with his opponent, Kamala Harris.

The claim is paper-thin, but many at Paramount believe that unless the company admits fault, the government will block its life-saving merger with Skydance.

That fear is all too plausible. The deal requires a nod from the Federal Communications Commission, a formerly easygoing regulator which has grown teeth under the new administration.

Its Trump-appointed boss, Brendan Carr, has argued that the agency’s power to block mergers on public-interest grounds covers matters as tenuous as a firm’s diversity policies. Paramount is negotiating with Mr Carr and, in parallel, with Mr Trump’s lawyers over the 60 Minutes case.

It is not the only media firm to have become politically entangled by its news output. In Mr Trump’s first term, antitrust authorities tried (but failed) to stop AT&T’s acquisition of Time Warner, which at the time owned CNN, a persistent critic of the president. Last year Disney’s ABC News paid Mr Trump $US15 million ($23m) to settle a defamation claim.

Before his re-election Mr Trump argued that Comcast, a cable giant, should be investigated for treason over the “one-sided and vicious” output of its NBC News and MSNBC channels. Mr Carr has launched a probe into its DEI policies.

None of this has encouraged new media companies to add news to their output. Netflix, the all-conquering streamer, has marched into every genre, from live comedy to sport, but drawn the line at news. Apple TV+ ended its deal with a satirist, Jon Stewart, in 2023 after his political material became uncomfortable.

Amazon produced an election-night show last year, but the only political content on its slate since then has been a $US40m documentary about the first lady, Melania Trump.

What of the older media empires that already have legendary news brands? Some appear to be readying them for sale, as part of a broader separation of their streaming and so-called linear-TV assets.

In November Comcast said it would spin off its cable-TV interests, including MSNBC. In December Warner Bros Discovery restructured to separate streaming from its linear assets, including CNN.

Disney’s boss, Bob Iger, has mused that linear networks like ABC “may not be core to Disney”, though he later rowed back. Rumours swirl that Fox News might be sold, given Rupert Murdoch’s failure so far to win control of the family trust from his children.

Even if media firms shed their news divisions, it is no guarantee of escape from Mr Trump’s attention. The White House recently suggested to Warner Bros that the president’s son, Donald Jr, might like a hunting show on the Discovery Channel, according to New York magazine. Mr Ellison, Paramount’s would-be acquirer, may wonder what he is getting into.