FCC Clears Paramount to Hold Up to 49.5% Foreign Equity in Warner Bros. Deal
The FCC approved Paramount's request to allow Gulf sovereign wealth funds to hold up to 49.5% of its equity, without voting rights, as part of its pending merger with Warner Bros. Discovery.
The Federal Communications Commission granted Paramount Pictures permission on Thursday to let foreign sovereign wealth funds own up to 49.5% of its equity once its merger with Warner Bros. Discovery is completed. The approval applies to funds from Saudi Arabia, Qatar and Abu Dhabi and is limited to non-voting stock, addressing the commission’s national-security concerns.
Paramount, which operates 28 television stations, must obtain FCC clearance for any foreign ownership exceeding 25% of a broadcast licensee. The commission noted that the foreign investors would not be able to influence or control licensee decisions.
A Paramount spokesperson said the company appreciated the FCC’s review and emphasized that the Ellison family and RedBird Capital Partners will retain 100% of the voting shares in the combined entity. The spokesperson added that the merger would give the new Paramount-Warner Bros. company the scale needed to compete with major technology firms and to invest in premium content.
The transaction remains pending a federal antitrust lawsuit filed by California and 11 other states, with a trial scheduled for March next year. The merger has faced opposition from media-watch groups and several Democratic senators, who warned that the Communications Act bars ownership by foreign governments and that prior FCC approvals have been limited to allies.
Commissioner Anna Gomez expressed concern on social media that the approval could allow governments deemed repressive to exert indirect influence over a major U.S. media company. The FCC’s decision requires Paramount to seek additional clearance if the foreign investors ever seek voting rights.