FCC Funding Application Notes Paramount Will Be 49.5% Foreign-Owned Post-Merger

Paramount has noted it will be 49.5%-owned by non-U.S. investors after completing a planned merger with Warner Bros. Discovery.

The stat came to light in a request Monday by Paramount for approval of the foreign ownership stake by the FCC. The company said the arrangement, including a 38.5% holding shared by three Middle East investment funds, will give the combined company “greater access to capital.” The infusion of financial resources will enable Paramount to “compete more effectively in the provision of television broadcast services and in the broader video programming marketplace,” the filing said.

Saudi Arabia’s Private Investment Fund will have the largest share of the three Middle Eastern funds, a greater equity piece than Qatar or Abu Dhabi. Together, the three Persian Gulf states are putting $24 billion into the new company.

Paramount has noted repeatedly that the non-U.S. stakeholders have no voting control and are passive backers, making the scenario less dire than the one portrayed by critics. The fact that both CBS News and CNN will be under the new corporate roof, however, makes the involvement of Saudi Arabia and other Persian Gulf interests a sensitive point.

The filing is not an action that will affect the regulatory review of the transaction and was described by Paramount execs as a routine action.

The $110 billion merger has cleared most regulatory hurdles, and Paramount has projected it will close by September. A group of state attorneys general is said to be assessing legal options, having seen some traction in recent antitrust actions against Live Nation and Nexstar. If the deal doesn’t gain approval by September 30, WBD shareholders will be paid a “ticking fee” as compensation for the delay.

Netflix, whose accepted offer for Paramount’s studios-and-streaming division was supplanted by Paramount’s bid for the whole company, repeatedly pointed to the foreign ownership element when jockeying for the prize.