Paramount Skydance is reportedly in advanced negotiations to secure significant funding from three sovereign wealth funds in the Gulf region to facilitate its proposed acquisition of Warner Bros. Discovery. According to a recent report by the Wall Street Journal, the entity is aiming for equity commitments nearing $24 billion, with Saudi Arabia’s Public Investment Fund poised to contribute approximately $10 billion. Discussions also involve Qatar Investment Authority and Abu Dhabi’s L’imad Holding Co., and a finalized agreement could be reached as soon as Monday.
This development follows concerns raised by Democratic lawmakers about national security implications tied to the foreign investment involved in the merger. Recently, a bipartisan group of senators urged the Federal Communications Commission (FCC) chairman, Brendan Carr, to perform a comprehensive review of Paramount’s ambitious $81 billion deal, emphasizing scrutiny regarding the involvement of Arab state funding. However, Carr indicated that the FCC’s oversight would likely be limited since the transaction does not entail the transfer of ownership of broadcast stations.
In an open letter, Democratic leaders referenced a provision from the Communications Act, which restricts foreign entities from holding over 25% of equity or voting rights in U.S. companies that possess broadcasting licenses without prior approval from the commission. Paramount, on its part, has argued that the transaction does not fall under the purview of the Committee on Foreign Investment in the United States, given that the Gulf investors will not have governance over the organization.
Earlier attempts to finalize the acquisition included backing from Chinese tech giant Tencent, as well as Jared Kushner’s private equity firm, Affinity Partners. However, both entities have since exited the deal, with Tencent previously withdrawing due to fears that their involvement could prompt a review by foreign investment authorities.
Support from Gulf investors would bolster the financial strategy led by Paramount Skydance chair and CEO David Ellison, alongside his billionaire father, Oracle co-founder Larry Ellison. Additional financial partners involved in the deal include RedBird Capital Partners, Bank of America, Citigroup, and asset management firm Apollo Global Management.
The momentum behind these negotiations comes amid ongoing regional instability in the context of U.S.-Israeli relations with Iran. Concurrently, Warner Bros. Discovery has scheduled a special meeting of shareholders on April 23 to vote on the proposed sale to the newly merged Paramount Skydance, marking a critical milestone in the acquisition process. The deal is also awaiting regulatory scrutiny in Europe, with reports indicating that Paramount executives have instructed employees to prepare for a potential closing by the end of July.
