Paramount Skydance has announced that the newly formed Paramount-Warner Bros. Discovery entity will be 49.5% owned by foreign investors, including a significant 38.5% equity stake held by three Middle Eastern sovereign funds.
In a filing submitted to the FCC, Paramount detailed that the Public Investment Fund of Saudi Arabia would own a 15.1% equity stake. Additionally, the United Arab Emirates’ sovereign wealth fund will hold 12.8% of the equity, while the Qatar Investment Authority will hold 10.6%. Notably, these foreign investors will not be granted board seats or voting rights in the newly merged company.
The filing states that the Ellison family—David Ellison and his father, Larry Ellison—along with RedBird Capital Partners, will retain the largest equity stake in the Paramount Skydance-Warner Bros. Discovery entity and will hold 100% voting power.
Overall, Middle Eastern funds account for 38.5% of Paramount-WBD’s equity, with the remaining foreign ownership comprising existing Paramount Skydance and/or RedBird investors. Paramount is asking the FCC for “advance approval… for each of the entities seeking specific approval to increase their equity and/or voting interests in Paramount up to 20% at some future time.”
Paramount Skydance has engaged these three sovereign wealth funds to contribute nearly US$24 billion to the WBD acquisition, with a significant stake of about $10 billion coming from Saudi Arabia’s PIF.
Recently, Warner Bros. Discovery shareholders voted overwhelmingly to approve the US$111 billion deal with Paramount. This agreement is still subject to approval from European regulators, and there is a risk that state attorneys general could challenge the merger legally. Before clinching the WBD deal, Paramount indicated that its proposal had successfully met a milestone at the Justice Department, following a statutory waiting period and the “certification of compliance” with the DOJ’s inquiry under the Hart-Scott-Rodino antitrust act. Despite this, the DOJ retains the ability to contest a merger after the HSR waiting period.
Paramount’s FCC filing seeks a “declaratory ruling” that would allow foreign ownership of the Paramount-WBD entity (details available in the filing). Importantly, FCC approval of foreign investment isn’t a condition for concluding the overall deal, as a Paramount representative clarified.
Specifically, Paramount is seeking a ruling from the FCC to: “(1) allow existing and future foreign investors to indirectly possess equity and voting interests in Paramount that exceed the 25% statutory limit; (2) approve certain foreign investors to hold indirect equity and/or deemed voting interests surpassing 5% in Paramount; and (3) provide advance approval for non-controlling prospective foreign investors to potentially increase their indirect equity and/or voting interests up to 20% in Paramount.”
A spokesperson for Paramount Skydance stated to Variety, “The typical petition for a declaratory ruling with the FCC regarding indirect foreign investment in Paramount’s broadcast television assets has been filed due to the recent equity syndication. This FCC filing is a standard procedure for such investments and is not required for the closure of Paramount’s acquisition of WBD. Upon closing of both the transaction and equity syndication, the Ellison family and RedBird will hold the largest equity stake in the merged company. They will retain exclusive ownership of Class A Common Stock, accounting for 100% of voting shares, with no other parties involved in equity syndication having governance rights or board representation.”
The spokesperson further added, “The merger between Paramount and WBD’s complementary assets will not only foster healthy competition but will also create a formidable champion for creative talent and enhance consumer options.”
