FCC Approves 49.5% Foreign Ownership Structure for Paramount’s Warner Bros. Acquisition

The Federal Communications Commission (FCC) has approved Paramount Skydance’s requested financing structure for its proposed acquisition of Warner Bros. Discovery (WBD), allowing foreign investors to hold nearly half of the company’s equity if the deal is completed.

Under the approved structure, foreign investors would collectively hold 49.5% of Paramount’s equity. That ownership will consist of non-voting shares.

The largest portions of the foreign investment would come from sovereign wealth funds tied to Saudi Arabia, Abu Dhabi, and Qatar. Saudi Arabia’s Public Investment Fund would hold a 15.1% equity stake, while Abu Dhabi’s L’imad Holding Company would hold 12.8%, and the Qatar Investment Authority would hold 10.6%. Additional foreign ownership would come through other investment funds and foreign entities holding Paramount’s Class B stock.

The FCC also granted advance approval that could allow foreign investors to collectively hold up to 100% of Paramount’s equity indirectly in the future. However, Paramount would need additional FCC approval if those investors seek to acquire voting shares.

Despite the size of the foreign investment, the Ellison family and RedBird Capital Partners will retain complete control of the combined company’s voting shares. The FCC’s ruling also requires Paramount to obtain further approval if foreign investors collectively acquire more than 25% of the company’s voting interests or if it seeks to change the voting rights of any of the approved foreign investors.

The Paramount-Warner Bros. Discovery transaction currently remains tied up in court due to legal challenges brought by a coalition of 12 states, led by California, and the Writers Guild of America (WGA). A federal trial is scheduled for March 2027.

The delay is also creating significant costs for Paramount. Beginning October 1, the company will be responsible for a $7 million-per-day “ticking fee” payable to WBD shareholders. Paramount has asked the court to require the states and WGA to post a bond of about $1.9 billion to cover costs associated with the delay.

If the acquisition ultimately fails due to regulatory obstacles, Paramount would be required to pay WBD a $7 billion termination fee.

In retaliation, Paramount has threatened to move its operations out of California if the dispute remains unresolved.

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