The FCC has granted Paramount permission to exceed foreign ownership limits as it pursues a merger with Warner Bros. Discovery, allowing significant indirect equity stakes for Gulf sovereign funds.
Key facts
- •The FCC waiver allows foreign entities to hold indirect equity interests up to 100% in the combined Paramount-Warner Bros. entity.
- •The approval specifically permits sovereign wealth funds from Saudi Arabia, Qatar, and the UAE to hold stakes without voting rights.
- •Paramount disclosed that it expects these foreign funds to indirectly own nearly 50% of equity interests upon the merger's completion.
- •The FCC's Media Bureau concluded that the increased capital access serves the public interest by strengthening the broadcast industry.
- •The merger remains subject to a separate antitrust legal battle involving twelve states and Hollywood writers.
The U.S. Federal Communications Commission (FCC) has approved a request from Paramount to allow foreign entities to hold indirect equity interests exceeding the standard 25% limit. The decision clears a regulatory hurdle for the company's proposed $81 billion merger with Warner Bros. Discovery. The approval permits sovereign wealth funds from Saudi Arabia, Qatar, and the United Arab Emirates to hold indirect equity stakes in the combined entity.
By the numbers
Regulatory Approval and Ownership Terms
The FCC granted Paramount permission for foreign entities to hold up to 100% indirect equity interests in the company. While the approval allows for significant foreign investment, the commission stipulated that these investors will not hold official voting rights or governance influence over the company's broadcast licenses. Paramount owns 28 television stations, which subjects it to federal regulations regarding foreign ownership of public airwaves.
Financial Backing and Industry Response
The investment involves commitments from Saudi Arabia's Public Investment Fund, the Qatar Investment Authority, and the UAE's L’imad Holding Company, which have reportedly pledged a combined $24 billion to support the acquisition. Paramount stated that the investment will provide the necessary resources to compete globally, while maintaining that the family of CEO David Ellison and RedBird Capital will remain the majority owners. The move has faced criticism from advocacy groups and some Democratic officials, who expressed concerns regarding potential foreign influence over domestic news operations like CBS and CNN.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by Engadget, ABC News Business.
