The FCC’s Media Bureau has granted FCC Paramount foreign ownership approval, allowing Paramount Skydance to exceed the usual foreign-ownership threshold for a U.S. broadcast license holder. The ruling clears an ownership structure tied to investments from Saudi, Qatari and UAE/Abu Dhabi funds, but it does not transfer voting control of Paramount to those investors or complete Paramount’s proposed acquisition of Warner Bros. Discovery.
Paramount owns and operates 28 local CBS stations, according to Ars Technica. Under federal law, a company with broadcast licenses generally needs FCC approval when direct or indirect foreign ownership exceeds 25%.
Paramount told the agency it expects total indirect foreign ownership to reach 49.5% under its current arrangements. The Media Bureau’s declaratory ruling goes further than that projected figure, permitting aggregate indirect foreign equity ownership of up to 100%, subject to conditions and further approvals for certain changes.
Do the foreign investors control Paramount?
No. The approved investments are Class B shares without voting rights, according to Paramount’s filing and the FCC ruling. The Ellison family and RedBird Capital Partners would retain all Class A voting shares, leaving them with voting control of the company.
The reported allocation among the three sovereign funds is less tidy than the headline figure suggests. Variety reported in April that Saudi Arabia’s Public Investment Fund, a UAE sovereign wealth fund and the Qatar Investment Authority would hold a combined 38.5% stake, with the rest of the expected 49.5% foreign total held by existing Paramount Skydance and/or RedBird investors. The Los Angeles Times later described the three funds as slated to hold nearly half of the proposed combined company’s equity. The FCC action concerns the overall foreign-ownership authorization, rather than resolving that reporting discrepancy.
What conditions did the FCC impose?
The Media Bureau said Paramount must monitor its foreign ownership to remain within the ruling’s terms. The agency also said the foreign investors may not direct, control, comment on or provide guidance about Paramount’s content decisions or company management. They may not access the company’s non-public data about U.S. persons.
Paramount must return to the FCC before changing the investors’ voting, governance or information rights, or before making changes that would push its foreign ownership beyond the terms of the ruling.
The bureau rejected objections that a large non-voting stake could still create practical influence. It cited the absence of voting rights, Paramount’s commitments on editorial independence and the company’s assertion that David Ellison would retain control.
FCC Commissioner Anna Gomez, the commission’s only Democrat, criticized the handling of the matter as a staff-level decision rather than a full commission vote. She said investments of this scale in a major U.S. media company raise concerns about influence over programming and news coverage. FCC commissioners did not vote on the ruling, Ars Technica reported.
What does this mean for the Warner Bros. Discovery deal?
The decision addresses foreign investment in Paramount’s licensed broadcast operations. It does not mean Paramount’s proposed $111 billion Warner Bros. Discovery acquisition has closed. Ars Technica reported that litigation brought by states had halted the transaction while the case proceeds. Variety previously reported that FCC clearance of foreign ownership was not a closing condition for the acquisition.
This story draws on original reporting from Ars Technica.
