Paramount Global, the parent of CBS and MTV, must clear one more big hurdle to complete its sale to independent film and TV producer David Ellison.

The Federal Communications Commission must approve the transfer of the company’s broadcast licenses. The agency, whose chairman was appointed by President Donald Trump, has raised questions about news bias inside the media company, along with concerns about the legality of its diversity, equity and inclusion policies.

The merger with Ellison’s Skydance Media moved one step closer to approval on Tuesday, when Paramount settled Trump’s news-bias lawsuit against its CBS News division by agreeing to pay $16 million for his legal expenses and a donation to his future presidential library. Now, it’s up to the FCC and Chairman Brendan Carr to reject Paramount’s sale to Skydance or approve it, possibly with conditions.

Trump had accused CBS of selectively editing quotes in a 60 Minutes interview with former Vice President Kamala Harris during the presidential race last fall to make her answers more succinct.

Trump named Carr to lead the agency in January, elevating an outspoken supporter of the president. Carr has repeatedly fired public broadsides at the press. The FCC chairman said earlier this year the president has “been right on these media bias issues,” and suggested he would look at how CBS handled the Harris interview in the context of the agency’s merger review. Broadcasters benefit from access to public airwaves and therefore must serve the public interest, he said.

Carr also said he would look at the Skydance deal in the context of Paramount’s efforts to end “invidious” forms of discrimination reflected in media companies’ DEI policies. Trump has been pushing to root out diversity, equity and inclusion policies from the federal government, corporate America and beyond, issuing executive orders banning the practices and asking agency heads to identify targets, including listed companies, to investigate for “illegal DEI” efforts.

If the FCC does impose conditions on the merger, it could take cues from complaints filed by the Center for American Rights, a conservative-leaning nonprofit public interest law firm that has perceived news bias at U.S. media outlets.

The center has suggested approval be contingent on concessions, including that Paramount locate broadcast executives and editorial staff in cities other than New York and Los Angeles to better ensure a balance of viewpoints. The group also wants an independent ombudsman to resolve complaints about coverage and for Paramount to commit to an ideologically diverse hiring pipeline by recruiting at schools like Liberty University and Hillsdale College.

Daniel Suhr, president of the Center for American Rights, said he’s “especially encouraged about the inclusion of disclosure for interview transcripts.”

The agency is also likely to scrutinize Paramount’s board for ideological diversity — whether it has representation from different backgrounds and political persuasions.

The addition of a news bias monitor that’s somehow supervised by the FCC would be unprecedented and would likely violate a provision in the Federal Communications Act that bars government censorship, said Harold Feld, senior vice president at the advocacy group Public Knowledge.

“We’ve never seen this before, and it certainly would seem to go against everything that the FCC stands for,” he said.

While the FCC hasn’t imposed conditions quite like the ombudsman role in past merger reviews, it isn’t uncommon in antitrust cases for monitors to assure compliance with certain conditions, said Andrew Jay Schwartzman, senior counselor at the Benton Institute for Broadband & Society.

Journalists within CBS News are concerned that the merger could compromise their newsroom’s independence and integrity, according to current employees. Staffers are worried that if an independent ombudsman were appointed, that person could interfere with news coverage.

CBS News has already experienced more oversight in recent months. Former CBS News president Susan Zirinsky returned in January to oversee standards at the division, adding a new level of scrutiny. And Paramount Chair Shari Redstone asked to review 60 Minutes segments centered on Trump after the president lashed out against the show’s reporting on him in April.

Paramount has long maintained that the Trump suit was “without merit,” however, citing broad First Amendment protections for the press and the fact that CBS didn’t report anything factually incorrect.

But the case coincided with the FCC’s review of Paramount’s $8 billion marriage to Skydance and raised issues that have traditionally been popular with Republican critics of the media.

Both Carr and Paramount have said the lawsuit and regulatory review were unrelated, but people inside Paramount have long believed that a settlement was necessary before any ruling on the merger, which was agreed to almost exactly one year ago.

The FCC’s media bureau, which reviews such mergers, could approve the Paramount deal with conditions, without elevating it to a public vote by the full commission. Verizon Communications Inc.’s recent acquisition of Frontier Communications was approved at the bureau level after the carrier agreed to curb its DEI efforts.

Democrats on Capitol Hill and at the FCC were swift to criticize the settlement and to draw a connection between the agreement and looming decision at the FCC.

Democratic Senator Edward Markey called Trump’s lawsuit “frivolous” and said its timing “raises serious questions about FCC independence and Paramount’s true reason for settling with Trump.” The FCC’s merger review should be free from political interference and proceed with “the utmost transparency.” He said Carr must hold a full commission vote on the merger.

Democratic Senator Elizabeth Warren said Wednesday she’s calling for an investigation into whether the Paramount settlement with Trump violates any anti-bribery laws.

“Paramount folded at the same time it needs Trump’s approval for a billion-dollar merger,” she said in a social media post.

Trump has aggressively attacked media organizations from CNN to the New York Times and the Washington Post, using the term “fake news” to discredit unflattering reports. The president won a $15 million settlement from ABC News last year over claims that one of its anchors defamed him in describing a previous court verdict.

After 60 Minutes aired segments about Trump’s contentious visit with Ukraine’s president in February and his designs to take control of Greenland, Trump lashed out on social media and called on Carr specifically to “impose maximum fines and punishment” on CBS.

Anna Gomez, the only Democratic commissioner on the FCC and an outspoken critic of the commission’s current stance on the media, said Paramount’s decision to settle “casts a long shadow over the integrity of the transaction pending before the FCC.”

She also called on her colleagues to bring this merger before the full commission for a vote.

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