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Rep. Sam Liccardo sent a letter to FCC Chairman Brendan Carr, urging him to reject Paramount’s petition that would allow three Middle Eastern sovereign wealth funds to own a significant stake in the company once its acquisition of Warner Bros. Discovery is completed.
The Saudi Public Investment Fund, Limad Fund, Abu Dhabi’s sovereign wealth fund, and the Qatar Investment Authority Fund, have committed about $24 billion in equity financing, and will own 38.5 percent of Paramount’s shares, with other foreign investors accessing nearly 50 percent.
“The size, concentration, and sovereign nature of this foreign ownership raises serious and unresolved questions about national security, foreign influence over US media, and the public interest obligations that the Commission must respect,” Liccardo wrote in his letter, dated May 1, which was obtained by the European Commission. Hollywood Reporter. “This raises serious tensions with the long-standing policy, embedded in Section 310 of the Communications Act nearly a century ago, that U.S. broadcast infrastructure must not be controlled by foreign interests — especially foreign regimes with documented records of press suppression and state-directed media influence.”
The letter continues: “The procedural subtlety of restricting these SWFs to non-voting shares does not resolve this conflict.” “The size of its ownership alone constitutes more than just leverage; the company’s financial dependence makes it beholden to its largest shareholders. The Commission should not allow any legal complications to wash away what is essentially a surrender of American media and American infrastructure to foreign authoritarian regimes.”
The Liccardo area includes a large swath of the Bay Area, including Santa Clara.
As Liccardo noted, David Ellison and his father, Larry Ellison, will retain full control of the combined company due to the two-class voting structure, but he believes the economic stake is enough to have influence over the combined company.
“The public interest standard established by the Commission is not met simply by asserting that local parties have voting shares,” the letter said. “Broadcast license holders have positive obligations to serve local communities, maintain editorial independence, and support a strong, free press. The financial structure of this deal – in which foreign sovereign entities provide most of the equity capital – creates structural dependencies and incentive distortions that are inconsistent with these obligations, regardless of formal voting arrangements.”
Liccardo adds that if the FCC approves the petition, Congress could take action in the future to set stricter limits on foreign ownership, or mandate divestments.
“Congress did not entrust the public airwaves to this agency so it could auction off America to Riyadh, Abu Dhabi, and Doha. This will not stand,” the letter said.
It should be noted that the FCC is not in a position to block the deal, as no broadcast licenses have been transferred. Instead, it would have to sign over foreign ownership, which would be above the legal limit of 25 percent.
But Larry Ellison and Red Bird agreed to back Paramount’s massive deal for Warner, so even if all foreign financing failed, they would be required to make up that lost financing to get the deal done.
