FCC Commissioner Calls For Scrutiny Of Paramount-WBD Foreign Investors

The sole Democrat on the FCC is calling on the agency to investigate and examine foreign investment in Paramount‘s proposed merger with Warner Bros. Discovery.

Paramount has disclosed that total foreign ownership of the combined company would be 49.5%, including 38.5% from investment funds from Saudi Arabia, Qatar and Abu Dhabi. Paramount has petitioned the FCC to sign off on the foreign investment, as any foreign ownership stake above 25% requires commission approval.

Gomez said in a statement, “The American public deserves to know who owns the airwaves that carry their news. I am alarmed by what appears to be an effort to rubber stamp a financial structure that places nearly half of one of America’s largest broadcast and media companies into the hands of foreign governments with documented records of press suppression and a troubling willingness to silence journalists.”

A Paramount spokesperson declined comment.

Paramount is seeking a declaratory ruling from the commission finding that it would be in the “public interest” to allow it to accept “indirect foreign equity and voting interests in excess” of the 25%. Among other things, the company argues that the investments will allow it greater access to capital, something that will enable it to “compete more effectively in the provision of television broadcast services and in the broader video programming marketplace.”

The company also contends that the foreign investments do not pose national security, law enforcement, foreign policy or trade policy concerns. They noted that the Ellison family will retain a majority of the voting interests and control, while the foreign investors will not have voting control or governance.

In her statement, Gomez noted that one of the investors, the Saudi Public Investment Fund, is controlled by Crown Prince Mohammed bin Salman. She noted that a 2021 U.S. intelligence report on the murder of Washington Post journalist Jamal Khashoggi concluded that the crown prince approved the operation to capture or kill the journalist. The crown prince has denied ordering the killing.

“There are serious, unresolved questions about how this foreign investment may jeopardize national security, and this Commission has a legal obligation to answer them before handing wealthy friends of this Administration yet another Billionaire Buddy Bypass on a transaction that strikes at the heart of American journalism,” Gomez said.

Among other things, Gomez is calling on the FCC to coordinate with national security agencies before making a declaratory ruling, although the agency said last week that various executive branch agencies will be consulted. The FCC also is taking comments, due on May 27, with replies due on June 11. Gomez also wants the commission to make foreign investment agreements public.