The Federal Communications Commission on Thursday granted Paramount Skydance’s request to allow Middle Eastern royal families to hold a substantial stake in a merged Paramount-Warner Bros. The sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi are slated to indirectly own nearly 50% of the equity in David Ellison’s proposed mega-studio, Paramount-Warner Bros. That will give them a hefty stake in CBS, CNN, Comedy Central, HBO and two historic Hollywood film studios.
Ellison needed FCC approval because the deal will change the ownership structure of CBS. As part of the Communications Act of 1934, Congress placed restrictions on foreign ownership of broadcast outlets because of concerns about national security. Current rules prevent foreign investors from owning more than 25% of a company that holds a U.S. broadcast license — unless the FCC determines that foreign ownership would serve a public interest.
CBS owns more than two dozen TV stations with FCC licenses, including KCBS-TV Channel 2 and KCAL-TV Channel 9 in Los Angeles. FCC Chairman Brendan Carr, an appointee of President Trump, has been supportive of Paramount’s takeover of Warner Bros. Trump and his lieutenants, including Defense Secretary Pete Hegseth, have been cheering for Ellison to control CNN, a Warner property.
Ellison’s billionaire father, Oracle co-founder Larry Ellison, in February agreed to personally guarantee the $47 billion in equity needed to buy out Warner Bros. Discovery’s existing shareholders for $81 billion. Ellison and longtime Skydance investor, RedBird Capital Partners, then entered into agreements to assign some of their purchase rights to the sovereign wealth funds.
The funds plan to invest $24 billion in the Paramount-Warner deal. Saudi Arabia’s Public Investment Fund is set to contribute $10 billion while the Qatar Investment Authority and Abu Dhabi’s L’imad Holding Co. will separately add $7 billion. Paramount has separately lined up debt financiers to help pull off the leveraged buyout of Warner Bros.
Discovery — Hollywood’s biggest merger in decades. The deal has been stalled by an antitrust challenge brought by California Atty. Rob Bonta and 11 other Democratic attorneys general, representing such states as New York, New Jersey, Colorado, Nevada and Oregon.
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