FCC lets Paramount sell 49.5% equity stake to Saudi Arabia, UAE, and Qatar

Although the Trump FCC has taken a hard stance against foreign-made equipment, such as routers and drones, it said in an order yesterday that granting Paramount’s request is in the public interest. “Paramount asserts that, as its Petition makes clear, its ‘new foreign investors, which will receive only non-voting equity, will not have any ability to influence the company’s editorial decision-making or news or entertainment content or to access its viewers’ personal data,’” the FCC said. The Ellison family and RedBird Capital Partners will continue to own 100 percent of Paramount’s Class A voting shares, while the foreign investors will hold Class B non-voting shares. The FCC approved Paramount’s petition in a declaratory ruling issued by the Media Bureau. FCC commissioners did not vote on the item. Gomez said that because foreign owners could hold influence over the company, she “called for this new and novel issue to go to a full commission vote given what’s at stake. Instead, the FCC snuck this ruling out as a staff-level decision, with no public vote and no accountability for a call of this magnitude.” Senate Democrats said in a May letter to FCC Chairman Brendan Carr that “the foreign governments behind this investment systematically suppress press freedom in their own countries and have made a series of investments and gifts to entities controlled by the president and his family, raising serious concerns about their influence over the independent American media and the potential for corruption.” But yesterday’s approval has been expected since Carr in March said, “I think this is a good deal, and I think it should get through pretty quickly.” The FCC said its order “permit[s] up to 100 percent indirect foreign equity interest of Paramount, in the aggregate.” While Paramount said it expects 49.5 percent of shares to be owned by foreign investors based on its current deals, it told the FCC the number could change “in light of routine fluctuations in publicly held equity interests and to account for potential future investments.” Paramount would need to seek additional FCC approval “in the event it proposes to change any voting, governance or information rights of the Foreign Investors,” and before any change that results in “its foreign ownership exceed[ing] the terms and conditions of this Declaratory Ruling,” the FCC said. Media advocacy group Free Press said in an FCC filing that “Paramount will begin its ownership of WBD with nearly $80 billion in debt, which will require deep cuts to Paramount’s pre-merger holdings and existing operations. These cuts will negatively impact the public interest, particularly at Paramount’s broadcast units.” The Paramount merger with Warner Bros. was approved by the Justice Department in June, but a group of 12 states led by California filed a lawsuit that seeks to block the deal. A federal judge ruled that the merger is likely to reduce competition substantially and violate antitrust laws. The judge halted the deal while litigation continues in the case, which could ultimately be decided by a federal appeals court. Paramount has been threatening to leave California if the state doesn’t back down, while California Attorney General Rob Bonta accused the company of trying to “blackmail the state into letting an illegal deal through.” The FCC last year allowed Paramount to buy Skydance for $8 billion after the company agreed to install an ombudsman at CBS. Carr, who has repeatedly threatened to revoke broadcast licenses from news companies that Trump doesn’t like, described the required ombudsman as a “bias monitor.” Paramount obtained FCC approval to buy Skydance shortly after it reached a $16 million settlement with Trump in a lawsuit accusing CBS of deceptively editing a pre-election interview with Kamala Harris. Paramount settled with the president even though CBS had rebutted Trump’s claims by releasing an unedited transcript and camera feeds of the interview.