Paramount Skydance disclosed in an FCC filing that the merged Paramount-Warner Bros. Discovery entity will carry 38.5% Middle Eastern equity ownership and 49.5% total foreign equity when the transaction closes, triggering immediate congressional pushback and a European Commission investigation. The filing names Abu Dhabi Investment Authority, Kuwait Investment Authority, and Qatar Investment Authority as the three Gulf sovereign wealth funds comprising the Middle Eastern allocation. RedBird Capital and the Ellison family will retain voting control through a dual-class structure, but the equity distribution puts nearly half the economic upside in non-US hands.
Rep. Sam Liccardo (D-CA) sent a letter to the FCC the same day requesting denial of the foreign ownership waiver, citing national security concerns around media consolidation and foreign influence over domestic content distribution. The FCC has 90 days from filing to approve or deny the request, though that clock can reset with additional information requests. The European Commission opened a preliminary antitrust review two weeks ago, focusing on combined theatrical distribution power across EU markets where Warner Bros. Discovery already holds 22% share in Germany and 18% in France. The commission has until June 12 to decide whether to escalate to a Phase II investigation.
The capital structure matters beyond regulatory theater. Middle Eastern sovereign wealth funds now hold meaningful positions in four of the six legacy US studios—Paramount, Lionsgate (via Kingdom Holding), and previously MGM before the Amazon acquisition. The $28 billion enterprise value assigned to the merged Paramount-WBD places the Gulf funds' 38.5% stake at roughly $10.8 billion in equity value, larger than the entire market capitalization of AMC Entertainment or Imax combined. That scale gives the funds board observer rights and veto power over certain asset sales above $500 million, per the disclosed shareholder agreement.
For luxury hospitality developers and family offices, the structural shift is the point. Warner Bros. Discovery operates 47 branded experience centers globally, including the Warner Bros. Studio Tour London that drew 1.6 million visitors in 2024 at an average ticket price of £53. Paramount holds long-term location-based entertainment partnerships in Abu Dhabi, Dubai, and Riyadh—markets where the investing sovereign funds control significant real estate and tourism development pipelines. The merged entity will consolidate those brand licensing agreements under one roof, and the Gulf funds will sit on both sides of renewal negotiations starting in 2027.
Allocators should watch three specific events. First, the FCC's procedural response by April 15, which will signal whether the commission treats this as routine foreign investment or triggers a national security referral to the Department of Justice. Second, the European Commission's Phase I deadline of June 12; escalation to Phase II adds 90 days and introduces remedy negotiations that could force regional asset sales. Third, the shareholder agreement includes a 12-month lock-up for the sovereign funds post-close, expiring roughly March 2027, which sets the earliest date for secondary market liquidity or additional stake accumulation.
The filing lists total debt assumption at $41.2 billion, with $12.7 billion maturing before 2029, refinancing that debt at current rates adds $180 million in annual interest expense the combined entity did not model six months ago.