FCC Approves 49.5% Foreign Equity in Paramount-Warner Merger

The U.S. Federal Communications Commission approved foreign investment allowing Middle Eastern sovereign wealth funds to indirectly hold nearly half of the equity in the proposed Paramount-Warner Bros. Discovery merger, clearing a major regulatory hurdle for the consolidation.

The FCC Media Bureau granted the request from Paramount Skydance to permit foreign entities to indirectly own 49.5% of the combined company, setting up a complex ownership structure for two of Hollywood's historic studios as media industry consolidation accelerates.

"The FCC just let some of the most repressive governments in the world indirectly control nearly all of a combined Paramount-Warner Bros.," said Anna M. Gomez, Democratic FCC Commissioner, in a statement regarding the staff-level decision.

Sovereign Wealth Fund Allocations and Structure

The financing package relies heavily on capital from the Middle East. According to The Wrap, the specific breakdown includes Saudi Arabia's Public Investment Fund holding a 15.1% indirect stake, the United Arab Emirates' L'imad Holding Company holding 12.8%, and the Qatar Investment Authority holding 10.6%.

The FCC's declaratory ruling includes advance approval for these foreign investors to hold up to 20% each of indirect equity in the future. The agency determined that permitting up to 100% indirect foreign equity interest in the aggregate serves the public interest, provided that Paramount secures additional regulatory approval if foreign entities seek to acquire voting shares.

Voting Control and Regulatory Safeguards

Despite the significant non-voting equity commitments from foreign funds, operational control remains insulated within domestic leadership. The Ellison family and RedBird Capital Partners retain 100% of the voting stock alongside the largest equity stake in the combined organization.

Regulators built specific guardrails into the approval. The FCC stipulated that the foreign investors will hold no voting rights, zero governance rights, no influence over content decisions, and no access to non-public U.S. person data.

What Is at Stake for Hollywood Consolidation

The regulatory clearance highlights the growing reliance of American media giants on sovereign wealth capital to fund massive corporate combinations. As traditional studio economics face pressure from streaming costs and declining linear television revenues, transactions of this scale increasingly depend on international liquidity pools while navigating strict national security and foreign ownership limits under the Communications Act of 1934.