The US Federal Communications Commission (FCC) has authorised Middle Eastern sovereign wealth funds (SWFs) to surpass the foreign ownership cap in the merger of Paramount and Skydance with Warner Bros Discovery.
The investment from the UAE, Saudi Arabia, and Qatar will allow these funds to indirectly acquire 49.5% of the new entity’s equity, though they will not hold any voting rights.
Significance of the Move
This move is significant as US regulations restrict foreign investors to a maximum of 25% ownership in companies that possess a US broadcast licence, unless explicit FCC approval is obtained.
The FCC indicated that granting this petition aligns with public interest, thereby waiving the foreign ownership cap to permit individual investors to hold as much as 20% of the equity without control.
Paramount Assures Limited Changes
Paramount has assured that this investment will not lead to a transfer of control within the company and that the Ellison family will maintain the majority of voting interests.
The commission’s statement confirmed that none of the foreign investors would influence Paramount’s programming or operational decisions.
SWF Investment
The sovereign funds from the GCC are investing a total of $24B in support of the merger.
Saudi Arabia’s Public Investment Fund is expected to provide $10B, while both the Qatar Investment Authority and Abu Dhabi’s L’imad Holding will each contribute $7B.
US investment firm RedBird Capital Partners is involved in the merger, supporting it with a substantial equity stake of $47B alongside Larry Ellison’s family.
RedBird operates a joint venture with UAE’s International Media Investments, which is controlled by Sheikh Mansour bin Zayed Al Nahyan.
Earlier this year, shareholders from Warner Bros Discovery overwhelmingly approved the extensive $110B merger with Paramount, signalling strong confidence in the deal’s potential.
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