Senate Democrats Implore FCC Chair to Conduct ‘Rigorous’ Review of Paramount-Warner Bros. Merger Foreign Investors

Democratic senators are once again raising concerns over the proposed $111 billion takeover of Warner Bros. Discovery by Paramount Skydance. The senators, led by U.S. Sen. Maria Cantwell, are urging the FCC to not rubber-stamp the deal due to the involvement of foreign investors, particularly wealth funds from the Middle East.

In a letter sent to FCC Chairman Brendan Carr, the senators highlighted their national security concerns regarding the pending merger. Paramount recently disclosed that the merged entity would be 49.5% owned by foreign investors, with significant equity held by sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi. This foreign ownership exceeds the 25% limit set by Congress on direct foreign ownership of American TV and radio stations.

The senators expressed worries that allowing these anti-democratic governments to have such a significant stake in an American media conglomerate could lead to undue influence over vital news outlets like CNN, CBS News, and local Paramount-owned television stations. They questioned whether granting approval for this level of foreign control serves the public interest.

FCC Chairman Carr acknowledged the foreign investment in the Paramount-WBD deal and stated that the agency is seeking comments on the matter. He mentioned that the Committee on Foreign Investment in the United States (CFIUS) would make a decision on the foreign investment, but the FCC’s role is limited to the foreign-ownership aspect.

While the Treasury Department, which oversees CFIUS, has not confirmed a review of the deal, Democratic senators Elizabeth Warren and Richard Blumenthal criticized the lack of action by the Trump administration. Paramount has argued that the Middle Eastern funds would not have board representation and, therefore, a CFIUS review is unnecessary.

Democratic FCC Commissioner Anna Gomez raised serious concerns about the foreign investment in the Paramount-WBD merger, emphasizing that these are sovereign wealth funds controlled by countries that are not press-friendly. She called for a rigorous review of the deal, pointing out that the FCC has never allowed a sovereign wealth fund to hold a significant ownership stake in a U.S. broadcaster.

The senators also questioned Chairman Carr’s apparent lack of concern about the deal, citing his previous opposition to foreign ownership in other cases. They raised doubts about his impartiality and the thoroughness of the FCC’s review process, especially in light of his positive comments about the Paramount-WBD merger.

In conclusion, the senators highlighted the need for a comprehensive review of the foreign investment in the Paramount-WBD deal to protect national security interests and ensure the integrity of American media outlets. They called on the FCC to carefully consider the implications of allowing such significant foreign control over a major media empire. Tencent Rejoins Paramount and Warner Bros Deal with Fresh Funding

In a recent report by Bloomberg on March 9th, it was revealed that Tencent has re-entered the scene as an investor in the Paramount and Warner Bros deal, bringing in fresh funding to support the partnership. This development marks a significant turning point in the deal, with Tencent’s renewed involvement adding a new dimension to the collaboration.

However, this move has sparked concerns among lawmakers regarding national security implications. In a letter addressed to Carr, senators expressed apprehension about allowing a major global adversary like Tencent to have a partial ownership stake in Paramount or any combined entity that would also encompass CNN and CBS News. The senators emphasized the potential risks to national security that could arise from such a partnership.

To address these concerns, the lawmakers posed a series of pointed questions to Carr, seeking clarification and documentation by June 5th. These questions revolved around the need for a comprehensive review by Team Telecom, particularly in light of the unprecedented risks to press freedom posed by the proposed equity investors. The senators also inquired about the specific role of Tencent in the transaction and its equity stake in Paramount, urging the Commission to carefully scrutinize these aspects.

Furthermore, the lawmakers raised doubts about the potential foreign ownership of Paramount, questioning whether Middle Eastern sovereign wealth investment funds would have effective control or influence over decision-making with a stake ranging from 49.5% to 100%. They also sought assurances from the Saudi, Emirati, and Qatari sovereign wealth funds, as well as Tencent, regarding their commitment not to interfere with editorial, journalistic, or content decisions at Paramount. The senators requested all relevant documents pertaining to these assurances to ensure transparency and accountability.

As the Paramount and Warner Bros deal moves forward with Tencent back on board, the scrutiny from lawmakers underscores the importance of upholding national security and safeguarding press freedom. The concerns raised by the senators highlight the complexities involved in such high-profile partnerships and the need for thorough oversight to mitigate potential risks. It remains to be seen how these issues will be addressed and resolved as the deal progresses.