Democratic senators are once more urging the FCC to not rubber-stamp Paramount Skydance‘s proposed $111 billion takeover of Warner Bros. Discovery — citing considerations over international traders, together with Center Japanese wealth funds, which are backing the pact.
The pending Paramount-WBD merger “raises national security alarms,” in keeping with the senators, led by U.S. Sen. Maria Cantwell (D-Wash.), the rating member of the Senate Committee on Commerce, Science and Transportation. The group despatched a letter Could 20 to FCC Chairman Brendan Carr outlining their considerations. That got here after one other group of Senate Democrats despatched the company chief an analogous letter two months ago.
The crux of their misgivings: In April, Paramount disclosed in an FCC submitting that the merged Paramount-WBD could 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. Paramount’s submitting seeks a declaratory ruling by the FCC allowing that international possession — and in reality, requested the company to authorize as much as 100% international fairness possession in its broadcast licensees. Congress set a 25% restrict on direct international possession of American TV and radio stations.
“The scale, concentration and scope of this proposal raise serious questions,” the senators wrote. “Foreign governments hostile to a free and independent press could exert unprecedented influence over a media conglomerate vital to American journalism and culture.”
They continued, “If the filing is approved, Saudi, UAE and Qatari sovereign investment funds would have significant influence over a number of the most significant and impactful news reporting and investigative journalism outlets in the United States, including CNN, CBS News, 60 Minutes, and 28 local Paramount-owned television stations in 17 of the country’s largest media markets.”
“Paramount’s petition asks for an unprecedented degree of foreign control of U.S. broadcasting,” the senators wrote. “[W]e have serious doubts that paving the way for these anti-democratic governments to own between 49.5% and 100% of an American media empire serves the ‘public interest.’”
Carr, at a press convention earlier Wednesday following the FCC’s month-to-month open assembly, acknowledged that the Paramount-WBD deal has “some foreign investment or foreign dollars that are involved in being invested in CBS to complete the purchase. And so we are running regular course process on that. So we put out a public notice to seek comment on that foreign investment.”
Carr added, “My understanding is there is a role for CFIUS,” referring to the U.S.’s intra-agency Committee on International Funding in the USA, which critiques international investments in American companies for potential nationwide safety dangers. CFIUS, Carr stated, “will ultimately make an up-or-down decision on that foreign investment. But the transaction itself isn’t going to come before the FCC, other than that foreign-ownership piece.”
The Treasury Division, which leads CFIUS, has not confirmed that it’s reviewing the Paramount-WBD transaction. In March, Democratic Sens. Elizabeth Warren and Richard Blumenthal criticized the Trump administration for failing to initiate a CFIUS review of the deal. Paramount has stated that the Gulf States backing the WBD deal wouldn’t be given board illustration and that, subsequently, CFIUS evaluation just isn’t warranted. The Ellison household and RedBird Capital Companions would collectively maintain the biggest fairness stake within the mixed firm and proceed to carry 100% of the voting shares, in keeping with Paramount.
In the meantime, on the Could 20 assembly, Democratic FCC Commissioner Anna Gomez stated that what Paramount’s petition is asking for is “very serious.” Earlier this month she had known as for the FCC to conduct a “vigorous” evaluation of the international funding within the proposed Paramount-WBD pact.
“These are not just some foreign companies. These are sovereign wealth funds controlled by countries that are not friendly to the press,” Gomez stated. “And Paramount has stated, ‘Give us up to 100% foreign ownership.’” Because the Middle Eastern funds would have indirect ownership stakes, under the statute, the FCC can waive the limit on foreign government ownership — “but it doesn’t imply we should always,” Gomez stated.
Others signing on to the Could 20 letter to Carr had been Sens. Edward J. Markey (D-Mass.), Ben Ray Luján (D-N.M.) John Hickenlooper (D-Colo.), Andy Kim (D-N.J.) and Warren. The complete textual content of the letter is at this link.
The lawmakers identified that the FCC has by no means earlier than allowed a sovereign wealth fund to carry a big possession stake of a U.S. broadcaster. In addition they famous that Carr in 2024 expressed considerations about international possession of TikTok, and he additionally opposed a switch of radio stations due to an absence of plans to “wall off the unvetted foreign interests.”
However Carr “appears to have no such concerns about this deal,” in keeping with the Democratic senators. They cited an interview Carr gave to CNBC in March by which he said in regards to the proposed Paramount-WBD merger, “I think this is a good deal, and I think it should get through [FCC review] pretty quickly.” Within the letter to Carr, the senators stated, “These comments raise questions about your impartiality and the rigor of the Commission’s review of this unprecedented foreign investment.”
The senators additionally referenced an unconfirmed report that China’s Tencent was among the many traders in Paramount’s WBD bid. In December, Paramount stated Tencent, which had dedicated $1 billion to the Paramount Skydance bid, was not a financing companion due to the WBD board’s considerations over international possession. In March, Bloomberg reported that Tencent was again on board as an investor within the take care of recent funding.
In regards to the reported involvement of Tencent, the senators wrote, “Allowing our most significant global adversary to partly own Paramount or a combined new entity that will own CNN and CBS News would risk our national security.”
The lawmakers posed the next inquiries to Carr, requesting solutions and paperwork by June 5:
- Will you decide to a complete evaluation by Workforce Telecom, particularly given the unprecedented dangers to press freedom posed by the proposed fairness traders?
- Will the Fee and Workforce Telecom particularly evaluation Tencent’s position within the transaction and fairness stake in Paramount?
- Will you decide to voting on Paramount’s request to boost its international possession on the Fee stage? If not, why?
- Do you imagine that international possession of between 49.5% and 100% of Paramount, contemplated by the submitting, would imply that the Center Japanese sovereign wealth funding funds would have efficient management or affect over resolution making?
- What particular assurances have the Saudi, Emirati, and Qatari sovereign wealth funds, and Tencent, offered the Fee that they won’t try to affect the editorial, journalistic, or content material choices at Paramount, both by suppressing reporting and inventive content material unfavorable to their governments or by selling content material that runs opposite to American pursuits or values? Please present all associated paperwork.
