Highlights
- Middle Eastern sovereign wealth funds have committed $24B to support Paramount Skydance’s $111B bid for Warner Bros. Discovery.
- The deal uses non-voting equity stakes and sub-25% ownership to avoid FCC and CFIUS scrutiny.
- U.S. lawmakers and regulators question foreign influence and deal transparency, complicating approval.
David Ellison’s Paramount Skydance has secured approximately $24 billion USD from three Middle Eastern sovereign wealth funds to back its approximate $111B Warner Bros. Discovery (WBD) takeover. The funding is jointly sourced from Saudi Arabia’s Public Investment Fund (PIF), the Qatar Investment Authority, and Abu Dhabi-based L’imad Holding.
As per Wall Street Journal’s reporting, PIF is providing roughly $10B, with the other two entities covering the rest with equity commitments. In addition to the Gulf commitments, Paramount has secured $54B in loan financing from Citigroup, Apollo Global Management, and Bank of America for the WBD deal. Larry Ellison, David Ellison's father and co-founder of Oracle, committed up to $46.7B toward the WBD acquisition; the Gulf funds will reduce the total equity he needs to contribute.
The Financing Structure of Paramount's WBD Takeover
The reliance on foreign sovereign capital introduces fresh regulatory and geopolitical considerations, particularly as U.S. authorities intensify scrutiny of overseas investments in strategic M&A. However, in previous SEC filings, Paramount stated that the deal would not be within the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS).
As per the company, Middle Eastern funds have “agreed to forgo any governance rights — including board representation — associated with their non-voting equity investments.” Meanwhile, Tencent, which had initially withdrawn as a $1B financing partner on WBD's foreign ownership concerns, has rejoined with fresh funding.
WSJ also reports that the current financing structure of Paramount’s WBD takeover is designed to sidestep U.S. regulatory triggers. As per the report, each funding entity's ownership will remain well below the 25% threshold that could activate a Federal Communications Commission (FCC) review.
US Authorities Push Back on Paramount's WBD Deal
Paramount structured the Gulf investments as non-voting equity stakes, a move aimed at easing clearance from bodies such as FCC and CFIUS. However, the DOJ's antitrust division acting head, Omeed Assefi, said the deal will not be on a fast track for approval, citing the Ellison family's political leanings.
While Ellison has been stating that their WBD bid would clear DOJ scrutiny, U.S. authorities have started fresh scrutiny due to its massive structure, foreign capital investment, and possible political backing. Democratic senators, including Cory Booker, expressed concern that sovereign wealth funds from Saudi Arabia, Qatar, and the UAE, alongside Tencent, are providing billions in financing for the merger.
In March, seven Democratic U.S. senators demanded that FCC Chairman Brendan Carr thoroughly and impartially examine Paramount's proposed deal because of foreign state investment. However, Carr and FCC would have minimal influence on Paramount’s WBD deal, as no broadcast station ownership is being transferred.
On the other hand, Netflix co-CEO Ted Sarandos called the Gulf sovereign funds backing Paramount's bid “a bad idea,” citing they are from “a part of the world that is not very big on the First Amendment.” He also questioned whether a $24B stake could be truly passive inside a company controlling CNN, HBO, and one of Hollywood's most powerful IP libraries.
The transaction reflects a trend of Gulf sovereign funds expanding into global media, esports, and entertainment assets as part of their economic diversification strategies (Vision 2030). Their recent investments have brought changes within the companies, such as ESL and EVO.
With a shareholder vote weeks away and regulatory review still underway, the current financing structure of Paramount-WBD merger faces ongoing political and institutional challenges that could shape how the combined entity operates. WBD has set April 23 for a special shareholders meeting to vote on the Paramount Skydance transaction.
