The FCC has approved a plan that lets foreign investors own nearly half of the combined Paramount-Warner Bros. company. The agency voted to allow up to 49.5% of Paramount’s equity to be held by foreign entities after the Warner Bros. Discovery deal closes, with Paramount owning 28 TV stations and needing FCC approval for foreign ownership over 25%.
The move clears a major hurdle for the merger, which is currently on hold pending an antitrust lawsuit filed in July by California and 11 other states. A trial is scheduled to begin next March. The FCC’s decision was made public alongside a note that the foreign funds will not own voting stock.
The Foreign Investors
Three Gulf state sovereign wealth funds are backing the acquisition: Saudi Arabia, Qatar and Abu Dhabi. The FCC’s decision states that these investors will not be able to wield influence, let alone control, over decisions involving the TV stations.
Paramount’s argument to the FCC was that the foreign funds would not be able to influence or control the stations. The FCC accepted that reasoning.
The Voting Stock Question
The FCC approved the request for up to 100% foreign equity, but said Paramount must get further approval if the funds are to own voting shares. A Paramount spokesperson confirmed that the Ellison family and RedBird Capital Partners will own 100% of the voting stock in the combined company.
The company also said the merger would give it the scale to compete with big tech companies. “At a time when the media industry faces unprecedented competitive pressure from dominant big tech companies, a combined Paramount-WBD will have the scale and resources necessary to compete, invest, innovate, and deliver premium content to audiences worldwide,” the spokesperson said.
Who Opposed the Request
Not everyone agreed. Free Press, which has raised alarms about the Trump administration, opposed the request, saying foreign investors may end up with a majority of the company’s equity.
“Control over for-profit, commercial domestic news media by any government is an extraordinary situation that would surely strike most Americans as unseemly, precisely because of the utility of the news media as a propaganda tool for those governments,” Free Press wrote.
A handful of Democratic senators also expressed concerns. Sen. Maria Cantwell and others wrote in May that the FCC has never approved a significant ownership stake of an American broadcaster by a sovereign wealth fund.
“The FCC has never approved a significant ownership stake of an American broadcaster by a sovereign wealth fund — that is, an investment entity controlled by a foreign government,” they wrote. “The plain text of the Communications Act prohibits ownership by ‘a foreign government or representative’ without regard to voting rights. 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.”
What the Decision Says
The FCC’s decision notes that the foreign funds will not own voting stock. It states: “We are persuaded by Paramount’s argument that the Foreign Investors therefore will not be able to wield any influence, let alone control, over decisions involving the Licensees.”
The decision also says Paramount must seek further approval if the funds are to own voting shares.
A Comparison of the Positions
| Party | Position | Key Argument |
|---|---|---|
| Paramount | Approved | Foreign funds will not own voting stock |
| Free Press | Opposed | Control by foreign governments is unseemly |
| Sen. Maria Cantwell | Opposed | Communications Act bars foreign government ownership |
The decision settles the foreign ownership question for now, though it leaves open the possibility that the funds could later seek voting shares.
What Happens Next
The antitrust suit remains the central obstacle. The trial is set for next March.
The FCC approval means the foreign ownership question is settled for now, though the company will need further approval if the funds want voting shares.
Here is the sequence of events ahead:
- The trial begins next March on the antitrust lawsuit filed by California and 11 other states.
- If the trial clears the antitrust challenge, the merger could move forward.
- Paramount must then secure further FCC approval if the foreign funds want to own voting shares.
The FCC has opened the door to foreign ownership at a scale that has never been allowed before. Whether that door stays open depends on what happens in the courtroom next March.
Where the paper stands
The paper backs small media businesses against both the agency and the giant conglomerate, and is against the FCC’s expanded foreign ownership allowance, which risks handing control of American TV stations to foreign funds. The paper’s position is simple: regulation usually protects the biggest players and raises the cost of entry for small ones, and this rulebook change does exactly that.
The decision grants up to 49.5% foreign equity in the combined company, with the foreign funds holding no voting stock. That is the stated limit, but the door to voting shares remains open. The FCC’s reasoning—that the funds cannot wield influence—rests entirely on what Paramount argued. The paper finds that reasoning thin, given that the same foreign funds are already backing the acquisition.
The paper also notes the antitrust suit remains pending. The trial is set for next March, and that case is the real test of whether the merger survives at all.
Source material: “FCC Approves 49.5% Foreign Ownership of Paramount-Warner Bros.,” Variety.
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