FCC clears three Gulf sovereign funds to hold 49.5% of Paramount's equity

Somewhere in a broadcast group's compliance model is a cell with 25 in it. Under US law, that is the share of a licensee's stock above which direct or indirect foreign ownership needs FCC approval ^[10], and Paramount holds the licenses for the 28 local CBS stations it owns and operates ^[6]. The company asked for a waiver. It got one ^[1].

Engadget and The Verge both describe the ruling as the FCC waiving its own rules on foreign equity ownership ^[2][3]. Ars Technica describes the same 25 percent as the level at which a licensee needs the commission's approval ^[10]. Both descriptions fit one file. For the person who wrote a plan against that number, the difference is whether 25 is a ceiling or the point at which you start drafting a petition.

The Los Angeles Times reported that $10 billion of the Gulf money comes from Saudi Arabia's Public Investment Fund, with $7 billion each from the Qatar Investment Authority and Abu Dhabi's L'imad Holding Co. ^[13]. Those three commitments add up to $24 billion ^[15]. Paramount agreed to pay $111 billion for Warner Bros. Discovery and is financing it partly with foreign investment ^[12], so the Gulf commitment covers about 22 percent of the purchase price ^[16].

The commission's defence is the share class. Because the stock being purchased has no voting rights, the ruling said, the funds "will not be able to wield any influence, let alone control, over decisions involving the Licensees" ^[17].

Anna Gomez, the only Democrat on the commission, said the FCC was letting Paramount sell indirect stakes to "some of the most repressive governments in the world" ^[5]. "An investment this large in one of America's biggest media companies doesn't just buy equity, it secures influence over what gets said and what gets made," she said ^[4]. Free Press told Variety that "control over for-profit, commercial domestic news media by any government is an extraordinary situation that would surely strike most Americans as unseemly" ^[8].

According to Engadget, Paramount's petition asked for permission for foreign entities to own up to 100 percent of the merged company, the FCC granted that, and the commission said a further request would be needed for those groups to obtain voting shares ^[18]. The ceiling in the order is therefore higher than the number in the transaction. The Verge said that during Brendan Carr's tenure the FCC has repeatedly threatened ABC, tried to block stations from airing interviews with Democrats, censored late-night TV hosts and tried to bully journalists ^[19].

What matters about any threshold in a distribution or compliance plan is who can grant an exception, what that body has to put in writing to grant it, and whether the grant covers one transaction or is available to the next petitioner. On this record, 25 percent answers all of that the same way. The commission grants it, a finding about voting rights justifies it, and the order is public for any other licensee's counsel to cite.

Trump's Department of Justice approved the merger ^[7]. If it closes, the combined company merges Paramount+ with HBO Max and gives Paramount ownership of CNN and other channels ^[14]. This ruling is for the people who need $24 billion committed before a court decides whether any of that happens.