Three Democratic U.S. senators are urging the FCC to forestall Paramount Skydance from closing its $111 billion merger with Warner Bros. Discovery till the federal government’s nationwide safety assessment of the overseas buyers within the deal has run its course.
In a letter dated June 18 despatched to FCC Chairman Brendan Carr, the lawmakers — Sens. Cory Booker (D-N.J.), Elizabeth Warren (D-Mass.) and Adam Schiff (D-Calif.) — cited Paramount’s April 24 petition looking for a declaratory ruling from the FCC for approval of “significant foreign investment.”
Booker, Warren and Schiff requested that the FCC, by July 1, problem “formal notice to Paramount that the transaction may not close” whereas the assessment of the overseas investments is continuing.
Paramount in that submitting disclosed that the merged Paramount-WBD can be 49.5% owned by foreign investors, with about 38.5% of the fairness within the new firm owned by the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi. As well as, Paramount’s submitting requested the FCC to authorize as much as 100% overseas fairness possession in its broadcast licensees.
Congress set a 25% restrict on direct overseas possession of American TV and radio stations with out prior FCC approval. The senators, of their June 18 letter to Carr, famous, “Under FCC rulemaking and procedures, the Commission must now coordinate, through the Committee for the Assessment of Foreign Participation in the U.S. Telecommunications Services Sector, with other executive branch agencies to assess the potential national security and foreign policy risks posed by that foreign ownership.”
The senators wrote within the letter: “The Commission has an obligation to honestly answer a fundamental question: whether placing 49.5 percent of the equity in the parent company of CBS, CNN, and 28 broadcast television stations into the hands of three foreign governments serves the American public. We are prepared to pursue every available avenue — legislative, oversight, and legal — to ensure that it does.”
Selection has reached out to the FCC for remark.
Individually, on June 12, the Justice Division’s Antitrust Division introduced that it was closing its investigation into Paramount-WBD, with out imposing any necessities for divestitures or different concessions on the a part of Paramount Skydance. Senior DOJ officers moved to clear the Paramount-Warner Bros. Discovery deal earlier than the crew of attorneys investigating the matter may problem a advice — and people attorneys had been “leaning” towards advising that the DOJ ought to file a lawsuit looking for to dam the merger, the Wall Avenue Journal reported. Requested for touch upon the Journal report, a DOJ spokesperson stated: “The Antitrust Division conducted a thorough investigation to assess whether the proposed transaction would harm competition. The investigatory record indicated that the transaction will increase competition across the media and entertainment ecosystem, benefiting American consumers and workers.” In response to the WSJ report, Warren stated in an announcement, “The American people need to know if this merger was approved as a political favor. This reeks of corruption.”
In March, Booker and 6 different Democratic senators wrote to Carr demanding the FCC conduct a “through review” of the Paramount-WBD deal’s overseas funding and raised issues about Carr’s public feedback that the overseas funding warranted solely a “very quick, almost pro-forma review.”
Within the June 18 letter, the three senators famous, “Paramount’s petition seeks far more than approval for the 49.5 percent aggregate foreign investment. The media conglomerate is requesting advance approval for each foreign investor to increase its individual stake up to 20 percent in the future, which, should each of the Sovereign Wealth Funds exercise that option, could result in up to 100 percent aggregate foreign ownership of one of the nation’s largest broadcast media companies.”
Whereas such advance approval is commonplace as a procedural matter, “the nature of the request is unprecedented,” Booker, Warren and Schiff wrote. “It seeks open-ended authorization for foreign government expansion into the parent company of CBS, CNN, and 28 broadcast television stations. Advance approval was never designed to authorize the wholesale transfer of control over one of America’s most consequential news organizations to foreign government-linked investors absent a finding that such a transfer serves the public interest and does not threaten national security.”
Paramount Skydance has stated in SEC filings that the three Center Japanese sovereign wealth funds “have agreed to forgo any governance rights — including board representation — associated with their non-voting equity investments.” The corporate maintains that the Ellison household and RedBird Capital Companions may have 100% management over a merger Paramount-Warner Bros. Discovery.
The senators stated the FCC ought to reject Paramount’s request to permit as much as 100% overseas possession of Paramount-Warner Bros. “out of hand.” They wrote: “Paramount’s assertion that this transaction ‘will not present any national security, law enforcement, foreign policy, or trade policy concerns’ is not a legal determination the Commission may accept without scrutiny.”
The three senators famous of their letter that Saudi Arabia’s Public Funding Fund is managed by Crown Prince Mohammed bin Salman, “whom the U.S. intelligence community concluded ordered the killing of Washington Post journalist Jamal Khashoggi.”
On April 29, the Justice Division’s Nationwide Safety Division notified the FCC that the Committee for the Evaluation of Overseas Participation in america Telecommunications Providers Sector had begun its assessment of the Paramount petition looking for a waiver of foreign-ownership guidelines. In line with the three Democratic senators, underneath the timeline, the committee’s assessment may take till late September to conclude — and if it identifies potential nationwide safety dangers, a second 90-day evaluation interval would comply with.
“Paramount’s stated intention to close the deal by July is flatly incompatible with a statutorily required national security review that may not yet have begun,” the senators wrote within the letter to Carr. “Additionally, Paramount has publicly characterized its FCC filing as not a condition of closing, signaling its intent to complete the acquisition before the Commission has made a public interest determination.”
Of their letter to Carr, Booker, Warren and Schiff additionally requested the FCC to verify that the assessment by the Committee for the Evaluation of Overseas Participation in america Telecommunications Providers Sector is underway and to “provide a projected timeline for its completion.” The senators additionally requested that the FCC “confirm whether Attorney General [Todd] Blanche is serving as Chair of the Committee for purposes of this review, and if he has not recused himself, identify the basis on which he is participating in a national security review with direct financial implications for sovereign wealth funds with documented ties to the Trump administration.”
The total textual content of the senators’ letter is at this link.
