Paramount’s Merger with Warner Bros. Discovery Raises Concerns Over Foreign Ownership

Paramount’s significant merger with Warner Bros. Discovery has been progressing toward completion for much of the year, navigating various regulatory challenges while facing increasing scrutiny regarding the financial backers of the deal. The $110.8 billion acquisition, heavily supported by Oracle co-founder Larry Ellison, has successfully passed antitrust review and received shareholder approval. However, one persistent question remains: how much of the newly formed company will be in foreign hands?

This concern is particularly pronounced due to the identities of some of the major financial supporters behind the deal. Sovereign wealth funds from Saudi Arabia, Qatar, and the United Arab Emirates have quietly emerged as crucial sources of funding for David Ellison’s media ambitions, prompting Democratic lawmakers to urge federal regulators to closely examine this arrangement before granting approval.

Despite these concerns, the Federal Communications Commission (FCC) has given its approval. The agency issued a declaratory ruling allowing foreign investors to hold 49.5% of the non-voting equity in the merged Paramount-Warner Bros. Discovery entity, with approximately 38.5% of that stake controlled by the three Middle Eastern sovereign wealth funds. Additionally, the FCC has permitted up to 100% indirect foreign equity interest in Paramount overall, which is nearly double the agency’s usual 25% limit on foreign ownership in U.S. media and broadcast companies.

Importantly, the ruling ensures that these foreign investors will not have control over the company. The stakes are structured as non-voting Class B shares, meaning that the Ellison family and RedBird Capital Partners will maintain control of all voting stock in the merged company, with no other equity participant holding governance rights. Saudi Arabia’s Public Investment Fund is anticipated to possess about 15.1% equity, the UAE’s sovereign wealth fund around 12.8%, and the Qatar Investment Authority approximately 10.6%.

The approval came after a national security review by Team Telecom, the interagency committee that evaluates foreign involvement in the U.S. telecommunications sector. They recommended approving the deal with the condition that Paramount commit to specific data protection and access limitations for its foreign investors. Paramount characterized the outcome as a validation of a deal it argues is essential for survival in a media landscape increasingly dominated by technology giants.

In a statement, the company expressed gratitude for the commission’s thorough review and welcomed the approval, asserting that a combined Paramount-Warner Bros. Discovery would possess the scale and resources necessary to compete, invest, innovate, and deliver premium content to audiences globally.

However, not all FCC members agreed with this perspective. Democratic Commissioner Anna Gomez voiced a strong dissent following the vote, cautioning that the ruling grants excessive influence to some of the world’s most repressive governments. She argued that an investment of this magnitude in one of America’s largest media companies does not merely purchase equity but also secures leverage over the company’s output and messaging.

The opposition extended beyond the commission itself. A group of Senate Democrats, including Sen. Maria Cantwell, had previously sent letters earlier this year demanding a thorough review, contending that foreign governments hostile to press freedom could gain unprecedented influence over a media conglomerate vital to American journalism and culture. The media advocacy group Free Press also formally opposed Paramount’s request, warning regulators that permitting this level of foreign equity risked transforming a major domestic news outlet into a potential propaganda tool.

Ultimately, the FCC dismissed these concerns, concluding in its ruling that the foreign investors would not be positioned to exert significant influence or control over decisions involving Paramount or its licensees. The agency framed its decision as consistent with its long-standing policy of encouraging foreign capital investment in the broadcast industry, even as critics continue to argue that the scale of this particular arrangement is unprecedented.

Despite the FCC’s approval, the merger is not yet completely secure. A federal judge has temporarily blocked the takeover ahead of a trial set for next March, where a coalition of a dozen U.S. states is challenging the deal on antitrust grounds. Additionally, European regulators still need to weigh in before Paramount and Warner Bros. Discovery can officially merge.

For the moment, the FCC’s green light represents one of the most significant milestones in one of the most closely monitored media mergers in years, even as concerns regarding foreign influence over American news media are unlikely to dissipate anytime soon.

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