A political firestorm is erupting over plans tied to a massive $111 billion media merger that could open the door for Gulf state investors to gain unprecedented influence over major Western media outlets.
At the center of the controversy is a proposed takeover of Warner Bros by Paramount, a deal heavily backed by funding from Saudi Arabia, the United Arab Emirates and Qatar.
Together, those nations are contributing $24 billion, making up the bulk of the equity financing, alongside $54 billion in new debt.
Paramount, run by 43-year-old David Ellison, has quietly asked the Federal Communications Commission to approve a waiver that would allow foreign ownership of up to 100%, while limiting voting power to 20%.
Under current US law, overseas investors are capped at 25% ownership of companies holding broadcast licenses unless regulators rule otherwise in the “public interest.”
The request has triggered fierce backlash, led by California Democrat Sam Liccardo, who blasted both the proposal and regulators.
“Congress did not entrust the public airwaves to this agency so that it could auction off America to Riyadh, Abu Dhabi and Doha. This will not stand,” he said in a statement.
Liccardo went further, warning: “The commission must not allow a legal technicality to launder what is, in substance, a surrender of American media and infrastructure to the hands of foreign authoritarian regimes.”
Despite the uproar, Paramount insists the concerns are overblown.
The company argues the filing is routine and maintains that Gulf investors would remain passive, holding no voting shares, governance rights or board seats.
Control of voting stock would remain entirely with the Ellison family and RedBird Capitial, according to Paramount.
Still, critics aren’t convinced, especially given that the combined company would include Warner, the parent of CNN, potentially giving foreign-backed investors greater sway over a major US news outlet.
The deal also has international implications.
Paramount owns Channel 5 in the UK, where strict rules prohibit foreign state-controlled entities from holding broadcast licenses.
British regulator Ofcom is expected to scrutinize the merger closely, including whether new owners meet “fit and proper” standards and whether media plurality could be affected, the Telegraph reported.
Meanwhile, the UK’s Competition and Markets Authority has already begun early-stage reviews, with a European Commission filing expected soon.
The controversy is compounded by additional foreign ties.
Plans include a stake for Chinese tech giant Tencent, which Liccardo noted is designated by the US as a military-linked company with ties to the Communist Party.
Hollywood itself is pushing back.
Labor unions and high-profile actors like Robert De Niro and Glenn Close have joined opposition efforts, raising alarms about foreign influence and potential job cuts.
Paramount has already outlined $6 billion in planned cost reductions at Warner, fueling fears of layoffs in an industry already under severe strain.
The Ellison family has pledged to backstop the full $47 billion equity portion of the deal if foreign funding falls through.
David Ellison’s father, Oracle founder Larry Ellison, worth an estimated $213 billion, has also drawn attention for his close ties to Donald Trump, which Paramount has touted as a potential regulatory advantage.
Paramount argues the merger would strengthen competition and expand opportunities for creatives and consumers alike.
