Paramount Files FCC Request for 49.5% Middle Eastern Equity in $24B Warner Bros. Merger

Paramount filed with the Federal Communications Commission on January 15 seeking approval for Middle Eastern sovereign wealth funds to hold nearly half the equity in its proposed $24 billion acquisition of Warner Bros. Discovery. The company disclosed that indirect foreign ownership of equity interests would reach approximately 49.5 percent, with the Ellison family and RedBird Capital maintaining voting control through a separate stock class. Three Gulf-based funds anchor the financing structure, though Paramount did not name them in the public filing.

The request arrives as Representative Sam Liccardo introduced a congressional resolution opposing FCC approval on national security grounds, and the European Union opened a formal antitrust investigation into the same financing arrangement. The combined entity would control 8,200 hotel rooms across HBO, CNN, and Warner properties used for location shoots, 42 million monthly streaming subscribers in markets where Marriott and Hyatt compete for corporate travel budgets, and sports rights that drive $1.8 billion in annual hospitality sponsorship spend. Foreign ownership at this scale in a media company with FCC broadcast licenses requires explicit Commission approval under rules governing national security and foreign influence.

The structure matters to luxury operators because the three unnamed Gulf funds represent the same capital pools financing $47 billion in U.S. hotel acquisitions since 2019, according to Real Capital Analytics. If the FCC grants approval, it establishes precedent for near-majority foreign equity stakes in companies holding broadcast spectrum—the same regulatory framework governing airport concessions, stadium naming rights, and the broadcast partnerships that underpin $320 million in annual PGA Tour hospitality spend. The Ellisons retain voting control through Class A shares, but equity holders at 49.5 percent still influence capital allocation decisions, including which properties get renewed leases for production infrastructure and which markets receive new studio investment.

The EU probe focuses on whether the financing arrangement violates foreign subsidy rules introduced in 2023. Brussels has 90 days from the January 14 filing to complete Phase I review, with authority to extend into a Phase II investigation if it finds the Gulf funds received preferential terms that constitute state aid. That timeline runs parallel to the FCC's public comment period, which closes February 14. The Commission historically takes six to nine months to rule on foreign ownership petitions of this complexity, meaning a decision lands in Q3 2025—after the EU's preliminary findings but before any Phase II conclusions.

Operators should watch three near-term events. First, whether Paramount names the three Gulf funds in supplemental FCC filings by the February comment deadline, which would allow allocators to map the capital back to specific family offices and their existing U.S. real estate portfolios. Second, whether the EU's Phase I report, due mid-April, reveals the funds' cost of capital—if they are investing at below-market rates, it suggests strategic rather than purely financial intent. Third, whether additional House members join Liccardo's resolution, which would not bind the FCC but would complicate approval in an election year where foreign investment in critical infrastructure polls poorly across both parties.

The FCC has never approved foreign equity above 40 percent in a company holding major-market broadcast licenses without imposing operational restrictions. Paramount's request crosses that threshold by 9.5 percentage points.