Paramount Global filed with the Federal Communications Commission on Monday requesting approval for Middle Eastern sovereign wealth funds to hold 49.5 percent of the company's equity interests as part of the $24 billion Warner Bros. Discovery merger, while maintaining that the Ellison family and RedBird Capital will control 100 percent of voting stock. The filing arrived the same day the European Union opened a formal investigation into the transaction's funding structure, and twelve hours before Representative Sam Liccardo (D-CA) submitted a letter demanding the FCC deny the foreign-ownership waiver.
The filing names three sovereign wealth funds—Abu Dhabi's Mubadala Investment Company, Saudi Arabia's Public Investment Fund, and Qatar Investment Authority—as anchor investors providing capital through a tiered structure that separates economic interest from operational control. Paramount argued that because Larry Ellison's family office and Gerry Cardinale's RedBird Capital will hold all Class A supervoting shares, the foreign capital remains passive. The company cited precedent from the 2013 Softbank-Sprint approval, where the FCC permitted 78 percent foreign equity provided voting control stayed domestic. The structural similarity is intentional—both deals used dual-class architectures to insulate broadcast licenses from foreign governance while importing offshore capital at scale.
The dual regulatory openings matter because they stress-test the current framework for foreign investment in U.S. media infrastructure. CFIUS has historically reviewed telecom and broadcast transactions on national-security grounds, but the FCC retains statutory authority over broadcast licenses and can deny transfers if foreign ownership exceeds 25 percent of voting stock without a public-interest waiver. Paramount's filing acknowledges crossing the equity threshold by 24.5 percentage points but argues the voting-control firewall satisfies both the letter and spirit of the Communications Act. The EU probe focuses on whether the Middle Eastern capital constitutes state aid under European competition law, a separate but parallel question that could delay the Warner Bros. integration timeline by six to nine months if Brussels demands structural remedies.
Liccardo's intervention introduces legislative pressure the FCC typically avoids during quasi-judicial reviews. His letter, released Tuesday morning, argues that passive equity at this scale creates de facto influence over programming and newsgathering decisions regardless of voting mechanics. He pointed to Warner Bros. Discovery's 18 U.S. broadcast licenses and Paramount's CBS network footprint as assets requiring heightened scrutiny. The argument echoes concerns raised during the 2017 Sinclair-Tribune review, which the FCC ultimately blocked on procedural grounds after political pressure mounted. Liccardo sits on the House Energy and Commerce Committee, which oversees FCC appropriations—his public opposition signals potential downstream legislative action if the commission approves the waiver without conditions.
Allocators and strategists should monitor three specific developments over the next 90 to 120 days. First, whether the FCC demands a national-security agreement similar to the 2019 T-Mobile-Sprint consent decree, which required foreign investors to recuse themselves from board discussions involving certain sensitive assets. Second, if the EU's state-aid investigation expands to include content-licensing agreements between the merged entity and Middle Eastern broadcasters, which could trigger divestitures. Third, whether additional congressional Democrats join Liccardo's objection, transforming isolated skepticism into coordinated appropriations leverage during the FCC's September budget hearings.
The filing lands as RedBird closes its $3.5 billion continuation fund, which will hold its Paramount stake separate from the 2022 vintage fund that backed the original Skydance acquisition. That structural separation insulates earlier LPs from regulatory risk while allowing the sovereign funds to enter at the merger-announcement valuation—a $28.50 per-share implied price that represents a 19 percent premium to Paramount's pre-deal trading level but a 31 percent discount to its 2021 peak.