FCC approves foreign investment in Paramount Warner merger with restrictions
What's the story
The US Federal Communications Commission (FCC) has approved a request from Paramount and Skydance to allow foreign investors to participate in their $110 billion acquisition of Warner Bros. Discovery. However, the commission has placed restrictions on this approval, barring foreign investors from holding voting stock in the merged entity. The decision comes amid concerns raised by a group of Democratic senators over potential stakes by Middle Eastern sovereign wealth funds.
Equity details
Individual investors can own up to 20% of the equity
In its ruling, the FCC's media bureau said it was waiving the 25% cap on foreign equity ownership.
It specified that individual investors could own up to 20% of the equity.
However, it also clarified that foreign investors would have no voting stock and "will not have any influence, direction, or control over or provide any commentary or guidance on Paramount's content decisions."
Company statement
Paramount satisfied with FCC's decision
In response to the FCC's decision, Paramount expressed its satisfaction and emphasized that the approval came after a review by "Team Telecom," a US government committee of national security officials.
The company assured that foreign investors would not have access to personal data of US citizens.
Despite a temporary block on the takeover by a US judge pending a trial in March, both the Justice Department and FCC had previously approved the merger.
Ownership breakdown
Largest equity stake to be held by these
When the deal closes, the family of billionaire and Oracle co-founder Larry Ellison and RedBird Capital Partners will hold the largest equity stake in the combined company.
They will also own 100% of the voting shares, with no other equity participant having any governance rights.
The FCC said Middle Eastern investors could own about 85% of Paramount's equity after the deal closes, including 15.1% for Saudi Arabia Public Investment Fund.
Influence concerns
Democratic Commissioner's concerns over potential foreign influence
Democratic FCC Commissioner Anna Gomez expressed her concerns over the decision, saying it would give "some of the most repressive governments in the world indirectly control nearly all of a combined Paramount-Warner Bros."
She added, "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."