Paramount Highlights 49.5% Foreign Ownership Following WBD Merger in FCC Funding Request
Paramount has announced that following its planned merger with Warner Bros. Discovery, 49.5% of the company will be owned by non-U.S. investors.
This information emerged from a request made by Paramount to the Federal Communications Commission (FCC) on Monday for approval of the foreign ownership stake. The company indicated that a 38.5% share will be held by three investment funds from the Middle East. Paramount believes this arrangement will provide the merged company with “greater access to capital,” allowing it to “compete more effectively in the provision of television broadcast services and in the broader video programming marketplace,” according to the filing.
The largest share among the three funds will belong to Saudi Arabia’s Private Investment Fund, which will surpass the equity stakes of funds from Qatar and Abu Dhabi. Collectively, these Gulf states are investing $24 billion into the new entity.
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Paramount has emphasized that the non-U.S. investors will hold no voting control and will act as passive backers, a detail that mitigates some concerns raised by critics. However, the inclusion of CBS News and CNN under the same corporate structure has made the involvement of Saudi and other Persian Gulf assets a contentious issue.
Paramount executives described the FCC filing as a routine action that will not impact the regulatory review of the merger.
The $110 billion merger has already cleared most regulatory obstacles, with Paramount projecting closure by September. However, a group of state attorneys general is reportedly exploring legal options, taking note of recent successes in antitrust cases involving Live Nation and Nexstar. If the merger does not receive approval by September 30, Warner Bros. Discovery shareholders are set to receive a “ticking fee” as compensation for the delay.
Netflix, which previously made an offer for Paramount’s studios-and-streaming division, highlighted the foreign ownership aspect when competing for the deal.
Ted Johnson contributed to this report.
