FCC lets Gulf state wealth funds take nearly half of Paramount-Warner Bros.

The Federal Communications Commission (FCC) has announced it is waiving its own long-standing rule limiting foreign entities to owning no more than 25% of media companies that broadcast on public airwaves. Paramount owns 28 such television stations.

The decision clears the way for sovereign wealth funds from three Gulf states — Saudi Arabia, Qatar and Abu Dhabi — to jointly acquire a stake of up to 49.5% in Paramount-Warner Bros. The move is tied to the merger between Paramount and Warner Bros. Discovery being pursued by David Ellison and his billionaire father, Larry Ellison.

The FCC says these foreign entities will hold no voting rights, meaning they supposedly cannot influence or control decisions made by the license holders. However, the original petition actually requested permission for foreign entities to own up to 100% of the combined company, and that too was granted. The company would still need to file a separate request before these investors could gain voting shares.

Criticism

The advocacy group Free Press has strongly criticized the ruling, arguing that government control over for-profit domestic news media is an extraordinary situation, given that news outlets can serve as propaganda tools. Anna Gomez, the FCC's sole Democratic commissioner, said the agency has effectively allowed some of the world's most repressive governments to indirectly control nearly all of the combined Paramount-Warner Bros., adding that an investment of this size secures influence over what gets broadcast and produced.

The Paramount-Warner Bros. merger is not yet finalized. It still faces an antitrust lawsuit filed by California and 11 other US states, with a trial scheduled to begin next March.