As Paramount seeks approval from an array of antitrust authorities for its acquisition of Warner Bros. Discovery, Democrats are turning to another front in their opposition: The foreign investors in the transaction.
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 agency approval. The FCC is in the midst of a public comment period on Paramount’s request, with submissions due by May 27.
In a letter to FCC Chairman Brendan Carr on Thursday, a group of Senate Democrats wrote that the “foreign governments behind this investment systematically suppress press freedom in their own countries and have made a series of investments and gifts to entities controlled by the president and his family, raising serious concerns about their influence over the independent American media and the potential for corruption.”
They added, “Paramount’s petition asks for an unprecedented degree of foreign control of U.S. broadcasting. Paramount’s rationale for a waiver of foreign ownership rules is based on its assertion that the foreign funds will be passive investors. But even as passive investors, these foreign entities could be in a position to gain sensitive information on Americans’ financial and other personal information, and their viewing habits, as well as the ability to influence the content carried by this massive media conglomerate.”
Sen. Maria Cantwell (D-WA), the top Democrat on the Senate Commerce Committee, was joined in the letter by Sen. Ed Markey (D-MA), Sen. Elizabeth Warren (D-MA), Sen. Andy Kim (D-NJ), Sen. Ben Ray Lujan (D-NM) and Sen. John Hickenlooper (D-CO).
The letter to Carr mirrors some of the concerns that have been raised by the FCC’s sole Democrat, Anna Gomez, who called for a “rigorous review” of the foreign investments earlier this month. She, too, warned of investments from “foreign governments with documented records of press suppression and a troubling willingness to silence journalists.”
Paramount 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.
The FCC is not reviewing the Paramount-WBD merger per se, as the transaction does not involve the transfer of broadcast licenses.
On Wednesday, Carr told reporters that in terms of regulatory review of the transaction, “there’s going to be a small piece for the FCC. There’s some foreign investment or foreign dollars that are involved in being invested in CBS to complete the purchase, and so we are running the regular course process on that.” He also said it was his understanding that there would be a role for Committee on Foreign Investment in the United States to review the transaction.
In a statement, Paramount noted that their FCC foreign ownership petition is also undergoing review of “Team Telecom,” which includes the Justice Department, Department of Homeland Security and the Department of Defense.
“When the transaction and equity syndication close, the Ellison family and RedBird will collectively hold the largest equity stake in the combined company, and the Ellison family will continue to control the company and all of its voting shares,” a Paramount spokesperson said.
In their letter, the senators called on Carr to take the foreign ownership review to the full commission. They also cited his previous comments about foreign ownership of U.S. media entities, noting that in a 2024 interview with Fox News, he referred to TikTok as a “clear and present danger to U.S. national security” given its Chinese ownership. They also pointed to his opposition to a 2024 license transfer of more than 200 radio stations as Audacy sought to emerge from bankruptcy, citing the foreign ownership stake.
The senators wrote that “in the case of Paramount, even before the application was filed, you claimed that the FCC had a ‘very minimal’ role in reviewing Paramount’s foreign ownership, the review would ‘get through pretty quickly,’ and that the Paramount-Warner Bros. transaction was a ‘good deal.’ These comments raise questions about your impartiality and the rigor of the Commission’s review of this unprecedented foreign investment.”
The lawmakers also pointed to reports that Tencent, “a Chinese company on the Department of Defense’s list of companies connected to the Chinese military, will also take an equity stake in the combined company.” Paramount last year listed the company among its minority investors, but it mater dropped out of the deal. In March, Bloomberg reported that Tencent was again looking to invest in the combined company.
The senators also asked Carr a series of questions, including whether Tencent’s role would be reviewed, and on the kind of assurances that the foreign funds have given that they would not try to influence editorial or content decisions.
An FCC spokesperson did not immediately respond to a request for comment.
