The Federal Communications Commission gave its approval to Paramount Skydance’s requested 49.5% foreign ownership stake in its pending merger with Warner Bros. Discovery on Thursday.
The move lets foreign investors, including sovereign wealth funds from Saudi Arabia, Qatar, and the United Arab Emirates, collectively own nearly 50% of the combined entity if the merger closes.
Under Section 310 of the Communications Act, there is a 25% benchmark for foreign investments in U.S. companies that directly or indirectly control broadcast licensees. The FCC is allowed to approve foreign ownership above 25% if the agency finds the action is in the public interest. That was the conclusion drawn by David Brown, chief of the Video Division for the FCC’s Media Bureau.
“We find that the public interest would be served by permitting indirect foreign equity ownership of Paramount, the controlling U.S. parent of the Licensees, to exceed the 25% benchmark,” the FCC’s declaratory ruling states. “We also find that it is in the public interest to permit up to 100% indirect foreign equity interest of Paramount.”
The indirect foreign equity in Paramount granted by the FCC totaled 87.5%, with various entities from the three Arab nations each indirectly holding more than 5% of equity in the company.
Democrats on Capitol Hill have long expressed concerns about the Middle Eastern countries holding a sizable stake in the merged Paramount-Warner Bros. entity, but Paramount maintains that the foreign investments do not pose any national security concerns. Preceding the FCC’s order, a national security review was completed by the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector.
The company emphasized that Paramount CEO David Ellison and his father, Oracle co-founder Larry Ellison, will still largely own the equity and retain control.
“When the proposed transaction with Warner Bros. Discovery closes, the Ellison family and RedBird will collectively hold the largest equity stake in the combined company and 100% of the voting shares, with no other equity participant having any governance rights,” a Paramount spokesperson said.
Anna Gomez, the sole Democratic commissioner at the FCC, slammed the agency’s approval of Paramount’s foreign ownership stake.
“The FCC just let some of the most repressive governments in the world indirectly control nearly all of a combined Paramount-Warner Bros.,” Gomez said on X. “An investment this large in one of America’s biggest media companies doesn’t just buy equity, it secures influence over what gets said and made.”
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“That’s why I called for this new and novel issue to go to a full Commission vote given what’s at stake,” she added. “Instead, the FCC snuck this ruling out as a staff-level decision, with no public vote and no accountability for a call of this magnitude. More to come on this soon.”
In the meantime, Paramount and Warner Bros. face an antitrust lawsuit filed by 12 states seeking to block the merger. So far, the plaintiffs’ case has been successful in preventing the $111 billion transaction from moving forward. The merger will remain blocked until next year through the expected March 2027 trial, though a settlement could be negotiated before then.