FCC approves foreign funding for Paramount-Warner Bros deal: ‘Serve the public interest’

Paramount told the US regulator that the foreign investment will help it improve its broadcast stations’ news gathering, both nationally and locally.

The Federal Communications Commission approved Paramount Skydance Corp.’s request to allow foreign financing in excess of 25% in its proposed acquisition of Warner Bros. Discovery Inc., saying that doing so would “serve the public interest.”

The parent of CBS and other media businesses has proposed buying Warner Bros., which owns the CNN news channel among other assets, for $110 billion, including debt. (REUTERS)

Paramount told the regulator that the foreign investment will help it improve its broadcast stations’ news gathering, both nationally and locally. It said the international ownership will “not result in a transfer of control of Paramount” and that the “Ellison family will retain a majority of the voting interests and control.”

Paramount Chief Executive Officer David Ellison has secured sign-off on the deal from top antitrust officials, although it is now tied up in lawsuits led by state attorneys general and the Writers Guild trade union. Ellison is the son of Oracle Corp. co-founder Larry Ellison, who will help fund the proposed acquisition. The elder Ellison is a big supporter of President Donald Trump.

FCC Chairman Brendan Carr, whose agency reviewed the deal because it involves the ownership of broadcast TV stations, previously said he was waiting for clearance from a joint federal committee called “Team Telecom,” which includes the Departments of Justice, Defense and Homeland Security. In a statement, a Paramount spokesperson said Team Telecom had also approved the financing on Thursday.

The parent of CBS and other media businesses has proposed buying Warner Bros., which owns the CNN news channel among other assets, for $110 billion, including debt. The transaction includes $24 billion in equity from three Middle East sovereign wealth funds.

According to the FCC filing, 49.5% of Paramount’s Class B shares will be controlled by foreign owners. The Ellison family and RedBird Capital Partners will collectively hold the largest equity stake in the combined company and 100% of the voting shares, “with no other equity participant having any governance rights,” the Paramount spokesperson said.

Anna Gomez, the lone Democrat among the FCC commissioners, said in a social media post that the regulator “just let some of the most repressive governments in the world indirectly control nearly all of a combined Paramount-Warner Bros.”

Gomez said she had sought to bring the decision up to a full commission vote. The ruling instead came from the FCC’s Media Bureau.

“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 made,” she said.

(Updates with Anna Gomez comments at the end.)

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