Middle Eastern Royals to Own Nearly 50% of Merged Paramount and Warner Bros
The Federal Communications Commission on Thursday granted Paramount Skydance’s request to allow sovereign wealth funds of Saudi Arabia, Qatar, and Abu Dhabi to hold a substantial stake in a merged Paramount-Warner Bros. Discovery, according to federal filings. The sovereign wealth funds will indirectly own nearly 50% of the equity in David Ellison’s proposed mega-studio, creating an entertainment giant that controls CBS, CNN, Comedy Central, HBO, and historic Hollywood film studios.
Foreign Equity and the Communications Act of 1934
David Ellison needed FCC approval because the multi-billion-dollar deal alters the ownership structure of CBS. According to the Communications Act of 1934 passed by Congress, strict limitations govern foreign ownership of U.S. broadcast outlets due to historical national security concerns. Current regulations bar foreign investors from owning more than 25% of a company holding a U.S. broadcast license unless the agency determines the arrangement serves the public interest. Through CBS, the combined entity owns more than two dozen television stations with active FCC licenses, including KCBS-TV Channel 2 and KCAL-TV Channel 9 in Los Angeles.
In its ruling, the FCC stated that the public interest would be served by granting the petition. The agency noted that Paramount emphasized the ownership changes would not result in a transfer of control. According to the FCC, the Ellison family will retain a majority of the voting interests and overall control of the media company.
Regulatory Division and Sovereign Investment Breakdown
Anna M. Gomez, the lone Democratic FCC commissioner, criticized the agency’s decision. According to Gomez, the agency allowed repressive governments to indirectly control nearly all of a combined Paramount-Warner Bros.
“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 what gets made,” Gomez said, adding that the matter should have gone to a full commission vote rather than a staff-level decision.
Financial backing for the acquisition involves massive capital injections from sovereign wealth funds. Oracle co-founder Larry Ellison agreed in February to personally guarantee $47 billion in equity to buy out Warner Bros. Discovery’s existing shareholders for $81 billion. Larry Ellison and RedBird Capital Partners assigned a portion of their purchase rights to Middle Eastern funds, which plan to invest $24 billion total. Saudi Arabia’s Public Investment Fund is contributing $10 billion, while the Qatar Investment Authority and Abu Dhabi’s L’imad Holding Co. are adding $7 billion each.
Antitrust Hurdles and Legal Challenges
While the FCC cleared the ownership hurdle, the transaction faces a broader antitrust challenge brought by California Attorney General Rob Bonta and 11 other Democratic attorneys general representing states including New York, New Jersey, Colorado, Nevada, and Oregon. Critics, such as the American Progress organization, have warned that the massive consolidation reduces competition and impacts the media ecosystem.
Paramount defended the decision in a public statement, noting appreciation for the FCC’s review. Meanwhile, the Department of Justice continues its independent antitrust review of the leveraged buyout, while entertainment industry members and state-level officials monitor the structural changes ahead of the projected summer completion timeline.
*Disclaimer: The views and cultural analyses presented in this article are for informational and entertainment purposes only. Information regarding legal disputes or financial data is based on available public records.*