FCC Waives Foreign Ownership Rules to Allow 49.5% Gulf State Stake in Paramount-Warner Bros.

The Federal Communications Commission has approved a waiver permitting sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi to hold a combined 49.5 percent equity stake in Paramount-Warner Bros., as reported by Engadget (https://www.engadget.com/2262681/fcc-allows-gulf-state-wealth-funds-to-own-nearly-half-of-paramount-warner-bros/). The decision clears a key regulatory threshold for the proposed media transaction involving David and Larry Ellison.

Under existing federal regulations, foreign entities are generally limited to owning no more than 25 percent of media companies that broadcast over public airwaves. Paramount currently owns 28 broadcast television stations. The FCC's waiver permits the trio of Gulf state funds to nearly double that threshold via non-voting shares.

In its ruling, the commission maintained that the sovereign funds will not possess governance authority over station operations, stating that the entities will not be able to wield influence or control over licensee decisions because the equity does not include official voting rights. The underlying petition also asked for and received permission for foreign entities to hold up to 100 percent non-voting equity, though the FCC specified that any subsequent transfer of voting shares would require a separate filing and regulatory approval.

The decision has drawn criticism from public interest advocates and regulatory officials. Media advocacy group Free Press told Variety that foreign government ownership in domestic commercial news operations presents significant risks given the utility of broadcast media as an influence tool. FCC Commissioner Anna Gomez, the sole Democrat on the commission, dissented, arguing that an investment of this scale grants indirect influence over media production and programming regardless of formal voting structures.

The transaction remains subject to legal hurdles outside the FCC. A coalition consisting of California and 11 other states has filed an antitrust lawsuit to block the Paramount-Warner Bros. merger, with a trial scheduled to begin next March.