The Federal Communications Commission on Thursday approved a request by Paramount Skydance to allow sovereign wealth funds from Saudi Arabia, Qatar, and the United Arab Emirates to collectively own up to 49.5% of the merged Paramount-Warner Bros. Discovery entity, pending the merger’s completion.
The FCC’s decision permits the foreign investors to hold nearly half of the combined company’s equity, including stakes in major media assets such as CBS, CNN, Comedy Central, HBO, and two historic Hollywood film studios. The approval follows Paramount’s petition under the Communications Act of 1934, which generally restricts foreign ownership of U.S. broadcast license holders to 25% unless regulators determine the arrangement serves the public interest.
FCC Ruling: Public Interest Justification Cited
In its official statement, the FCC concluded that the proposed ownership structure would not result in a transfer of control of Paramount. The agency noted that the Ellison family will retain a majority of voting interests, ensuring continued operational oversight by U.S. stakeholders.
The decision comes despite existing national security concerns tied to foreign ownership of broadcast outlets. The FCC’s rationale hinged on Paramount’s assertion that the foreign investment would not compromise editorial or operational independence, framing the approval as consistent with the public interest standard.
Policy Context: Foreign Ownership Rules and Exceptions
Under current U.S. regulations, foreign entities are prohibited from holding more than 25% of a company with a U.S. broadcast license unless granted an exception. The FCC has historically evaluated such requests on a case-by-case basis, weighing factors like national security risks, economic benefits, and the preservation of domestic control.
The Paramount-Warner Bros. merger required FCC approval because CBS, a key component of the deal, holds over two dozen FCC-licensed TV stations, including KCBS-TV (Channel 2) and KCAL-TV (Channel 9) in Los Angeles. The merger’s structure allows foreign investors to indirectly own nearly 50% of CBS’s equity, triggering the regulatory review.
Key Stakeholders and Next Steps
Paramount Skydance, led by Chief Executive David Ellison, has framed the foreign investment as critical to financing the $19 billion merger with Warner Bros. Discovery. The deal remains subject to additional regulatory and shareholder approvals before finalization.
FCC Chairman Brendan Carr, a Republican appointee, has publicly supported the merger, emphasizing its potential to strengthen the U.S. media landscape. The approval reflects a broader trend of increased foreign investment in Hollywood, despite ongoing debates over its implications for media sovereignty and national security.