WASHINGTON—Paramount has filed a petition with the Federal Communications Commission asking the regulator to allow foreign investors to hold more than 25% of the company’s equity and/or voting interests following the completion of the merger and to allow certain foreign entities to hold more than 5% of equity and/or voting interests in Class B stock.
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 filing stressed, however, that the Ellison family will continue to be the largest shareholder and will own 100% of the voting shares.
In the U.S. direct foreign ownership of broadcasters is generally capped at 25%, but the the FCC can approve indirect ownership of up to 100% if the agency finds that is in the public interest.
In the Petition for a Declaratory Ruling, Paramount noted that it “anticipates an increase in foreign investment in its parent entity, Paramount Skydance Corporation (Paramount Skydance), through the issuance of new non-voting, Class B shares. Accordingly, Paramount requests that the Commission issue a declaratory ruling to (1) permit existing and prospective foreign investors to indirectly hold in excess of 25 percent of Paramount’s equity and/or voting interests, in the aggregate, and (2) grant specific and advance approval for certain non-U.S. entities to indirectly hold equity and/or deemed voting interests of greater than 5 percent in Paramount, in the form of newly issued non-voting, Class B shares.”
“Although Paramount expects that existing and prospective foreign investors will indirectly hold slightly less than 50 percent of Paramount’s equity interests after consummating,” the deal, the petition “seeks approval for foreign investors in the aggregate to indirectly hold up to 100 percent of its equity and/or voting interests in light of routine fluctuations in publicly held equity interests and to account for potential future investments…Notably, the Proposed Investment will not result in a transfer of control of Paramount. Rather, the Ellison family will retain a majority of the voting interests and control of Paramount.”
The full Petition for a Declaratory Ruling is available here.
