The Federal Communications Commission on Thursday approved Paramount’s petition to allow 49.5% of its equity to be held by foreign entities once the Warner Bros. Discovery deal is complete. Paramount owns 28 TV stations, and thus must get the FCC‘s approval for foreign ownership over 25%.
Its acquisition of WBD is backed by three Gulf state sovereign wealth funds. In approving the petition, the FCC dispensed with concerns over national security and improper influence, noting that the foreign funds — from Saudi Arabia, Qatar and Abu Dhabi — will not own voting stock. A Paramount spokesperson said Thursday that the company appreciates the FCC’s review of the matter, and noted that the Ellison family and RedBird Capital Partners will own 100% of the voting stock in the combined company.
The merger is on hold pending the outcome of an antitrust suit filed in July by California and 11 other states. A trial is scheduled to begin next March. Free Press, a media advocacy organization that has repeatedly raised alarms about the Trump administration, opposed Paramount’s request, arguing that foreign investors may well end up with a majority of the company’s equity.
A handful of Democratic senators also expressed concerns about the issue. Maria Cantwell and others in May. And the FCC’s prior approval of foreign ownership of equity in broadcasters has been limited to entities based in allied NATO, Five Eyes, or friendly neighboring countries.” Though the foreign funds will own 49.5% of the equity when and if the merger goes through, Paramount sought permission for them to own up to 100%, given the potential need for future investment.
The commission approved the request, provided that Paramount must obtain further approval if the entities are to own voting shares.
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