WASHINGTON—Commissioner Anna M. Gomez is calling on the Federal Communications Commission to conduct a full, independent, and rigorous review of the foreign ownership interests embedded in the proposed Paramount-Warner Bros. Discovery merger.
In urging the regulator to take a hard look at the deal, Gomez, the agency’s sole Democrat, noted that Paramount owns CBS, which holds broadcast licenses regulated by the FCC. Under federal law, foreign governments and their representatives are prohibited from owning those licenses, and any indirect foreign ownership above 25 percent requires the commission to approve the deal and take a serious look into whether that arrangement serves the American public and protects national security.
As previously reported, Paramount has already filed a petition with the FCC seeking approval of foreign investment.
In the filing, Paramount Global said that following the completion of the merger with Warner Bros. Discovery, which has been approved by the FCC and shareholders, the combined company would be 49.5% owned by foreign companies and that Middle Eastern investors would hold 38.5% of the company’s equity.
Those Middle Eastern investors include Saudi Arabia’s Public Investment Fund (15.1% equity stake), the United Arab Emirates’ sovereign wealth fund (12.8% equity) and the Qatar Investment Authority (10.6% equity).
“The American public deserves to know who owns the airwaves that carry their news,” Gomez said in a statement. “I am alarmed by what appears to be an effort to rubber-stamp a financial structure that places nearly half of one of America’s largest broadcast and media companies into the hands of foreign governments with documented records of press suppression and a troubling willingness to silence journalists. There are serious, unresolved questions about how this foreign investment may jeopardize national security, and this Commission has a legal obligation to answer them before handing wealthy friends of this Administration yet another Billionaire Buddy Bypass on a transaction that strikes at the heart of American journalism.”
The transaction before the commission involves sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi investing in a company that controls CBS broadcast stations, as well as major cable news operations, including CNN.
In a press release on the issue, Gomez noted that among the named investors is Saudi Arabia’s Public Investment Fund, controlled by Crown Prince Mohammed bin Salman, whom the U.S. intelligence community concluded ordered the murder of Washington Post journalist Jamal Khashoggi in 2018.
Adding to these concerns, Tencent, a U.S.-designated Chinese military company, withdrew from the transaction last year after its participation threatened to trigger a national security review by the Committee on Foreign Investment in the United States (CFIUS), only to resurface in reported discussions about a potential investment. Whether Tencent ultimately participates, and at what level, remains unclear, raising further questions about the full scope of foreign investment in this deal, the release from Gomez's office said.
Gomez called on the FCC to take concrete steps before acting on this petition.
More specifically, she asks that the commission make all foreign investment agreements publicly available. She also wants the FCC to open the proceeding to public comment so Americans can weigh in on who is buying into public airwaves. Finally, she asks the FCC to coordinate with national security agencies, including CFIUS and the DOJ National Security Division, before drawing any conclusions about the risks this deal poses to national security.
Her calls echo those made by multiple members of Congress, including Sens. Cory Booker (D-N.J.), Chuck Schumer (D-N.Y.), and Elizabeth Warren (D-Mass.), as well as Rep. Sam Liccardo (D-Calif.), who have similarly urged the Commission to conduct a rigorous and independent review before taking any action.
“The public airwaves belong to every American, not just billionaire buddies of this Administration and the foreign governments that fund them,” Gomez concluded. “Instead of auctioning them off to the highest foreign bidder, the FCC should do more to protect them.”
The Paramount petition on foreign ownership did stress that the Ellison family will continue to be the largest shareholder and will own 100% of the voting shares.
