FCC Clears Gulf Money for the Paramount-Warner Deal — But Not a Single Vote

The Federal Communications Commission on Thursday approved Paramount Skydance's request to let foreign investors back its $110 billion acquisition of Warner Bros. Discovery, approving foreign ownership above the 25% benchmark — but barring the investors from holding any voting stock.

The ruling

In a declaratory ruling issued by the FCC's media bureau, the commission granted Paramount's petition to let foreign investors indirectly hold more than 25% of the company's equity in the aggregate, with individual investors approved to hold more than 5% each through non-voting Class B shares and advance approval to reach up to 20% each in the future. The ruling found it “in the public interest to permit up to 100% indirect foreign equity interest of Paramount, in the aggregate.”

The decision followed a national security review by the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector — known as Team Telecom — which recommended approval subject to commitments from Paramount on U.S. data protections and restrictions on the foreign investors' rights and access.

The money

Foreign investors will own 49.5% of Paramount's non-voting equity, with 38.5% of that held by three Middle Eastern sovereign wealth funds: Saudi Arabia's Public Investment Fund at 15.1%, the United Arab Emirates' L'imad Holding Company at 12.8%, and the Qatar Investment Authority at 10.6%. Passive limited-partner investors in funds managed by RedBird Capital Partners account for another 5.8%, with foreign-based holders of Class B stock at 5.2%.

Control stays firmly in American hands. The Ellison family — headed by Oracle co-founder Larry Ellison — indirectly holds 77.5% of Paramount's Class A voting shares plus about 40% of the non-voting Class B shares, while RedBird holds the remaining 22.5% of Class A and about 9% of Class B. When the deal closes, the Ellison family and RedBird will collectively hold the largest equity stake and 100% of the voting shares, with no other equity participant holding any governance rights.

The guardrails

The FCC attached sharp limits. Foreign investors can hold 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 management,” or access to non-public data on U.S. citizens. Paramount must seek a new FCC approval if foreign voting interests ever exceed 25% in the aggregate or if it proposes changing any approved foreign investor's voting interest.

“We appreciate the FCC's careful review and are pleased that it has granted Paramount's petition consistent with its established process,” a Paramount spokesperson said. “A combined Paramount-WBD will have the scale and resources necessary to compete, invest, innovate, and deliver premium content to audiences worldwide.”

The dissent

Not everyone is comfortable. A group of Democratic senators had raised concerns about Middle Eastern sovereign wealth funds taking stakes, and Democratic FCC Commissioner Anna Gomez blasted the decision on Thursday: “The FCC just let some of the most repressive governments in the world 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.”

What still stands in the way

The FCC approval does not unblock the deal. A U.S. judge has temporarily blocked the takeover pending a March trial on a legal challenge filed by a dozen states, and Paramount has agreed to delay closing until five days after the trial's outcome or June 1, 2027, whichever comes first. The merger has otherwise been cleared by Warner Bros. shareholders and regulators in 68 jurisdictions, including the Justice Department, the European Commission and the U.K.'s Competition and Markets Authority.

Delay is expensive. Starting October 1, Paramount begins accruing a 25-cent-per-share ticking fee — about $650 million per quarter, or $7 million a day. The company has asked the state attorneys general and the Writers Guild of America, which is also suing, to post a $1.9 billion bond covering the ticking fee and other financing costs during the delay; a hearing is set for September 24. David Ellison has threatened to move Paramount's operations out of California if no settlement is reached by October 1, with a two-day settlement conference scheduled for October 14 and 15. If the deal collapses on regulatory grounds, Paramount owes Warner Bros. Discovery a $7 billion termination fee.