Paramount has formally requested that the Federal Communications Commission (FCC) greenlight its significant equity investment from three prominent Middle East sovereign wealth funds. These funds are crucial backers of the company’s ambitious $111 billion acquisition of Warner Bros. Discovery.
The petition for a declaratory ruling, submitted to the FCC and signed by Paramount’s legal chief Makan Delrahim, specifically asks the Brendan Carr-led commission to approve the deal involving Saudi Arabia’s Public Investment Fund (PIF), L’Imad (an Abu Dhabi sovereign wealth fund), and a fund from the Qatar Investment Authority.
Paramount emphasized that control over all voting shares in the company will remain with David Ellison, his father Larry Ellison, and RedBird Capital. The sovereign funds, in contrast, are solely acquiring non-voting equity shares. The company anticipates that upon the consummation of the proposed investment, the aggregate indirect foreign ownership of equity interests in Paramount will be approximately 49.5 percent, highlighting the company’s reliance on this international capital.
While Paramount is seeking a ruling that would permit up to 100 percent foreign ownership of equity or voting shares, this is described as a procedural maneuver rather than an indication of future plans. It’s important to note that the FCC’s approval pertains only to the foreign financing aspect, not the acquisition deal itself, which already secured Warner Bros. Discovery shareholder approval last week.
A Paramount spokesperson clarified to The Hollywood Reporter that the FCC filing is a “customary petition for a declaratory ruling” concerning indirect foreign investment in Paramount’s broadcast television stations due to recent equity syndication. They added that such a filing is “completely standard” for investments of this nature and is not a prerequisite for closing Paramount’s acquisition of WBD.
“When the transaction and equity syndication close, the Ellison family and RedBird will collectively hold the largest equity stake in the combined company and continue to be the sole owners of Class A Common Stock, representing 100% of the voting shares, with no other equity syndication party having any governance rights, voting shares, or Board representation,” the statement affirmed. It further suggested that the combination of Paramount and WBD’s complementary assets will boost competition and foster a strong environment for creative talent and consumer choice.
The three Middle East funds are reportedly providing $24 billion in capital for the Warner Bros. deal. The FCC filing confirms that the PIF will be the largest contributor, holding 15.1% of Paramount’s equity post-deal, followed by L’Imad with 12.8%, and Qatar’s fund with 10.6%. Collectively, these three funds will control 38.5% of Paramount’s non-voting equity shares. Other foreign equity owners include passive investors in RedBird funds and entities that have filed Form 13F with the SEC.
Paramount is also engaging with the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector, often referred to as “Team Telecom,” which advises the FCC on national security and law enforcement matters.
In the filing, Delrahim argued that the foreign investment will ultimately strengthen the company’s local news programming, enhance its technology infrastructure, and diversify its programming, citing the UFC fights deal as an example. He stated that “Reducing barriers to further investment in Paramount, including by allowing the company to pursue additional capital from non-U.S. investors, will enable it to allocate additional resources to preserve and enhance the legacy and broad reach of the Licensees’ television broadcast operations.” Delrahim concluded that this would improve Paramount’s competitive standing in the television broadcast and broader video marketplaces, thereby promoting overall industry strength, and better position the company to navigate ongoing challenges facing broadcasters and linear pay-television network operators.
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