The Federal Communications Commission is waiving its rule capping foreign equity ownership at 25 percent in the Paramount-Warner Bros. case, allowing three Gulf sovereign wealth funds to own up to 49.5 percent of the company, according to The Verge.
Key facts
- The FCC is waiving its rule limiting foreign equity ownership to 25 percent in the Paramount-Warner Bros. case, according to The Verge.
- Sovereign wealth funds run by the governments of Saudi Arabia, Qatar and Abu Dhabi would be allowed to own 49.5 percent of the company under the reported terms.
- The decision comes during FCC Chair Brendan Carr's tenure.
- The Verge reports that the FCC under Carr has repeatedly threatened ABC.
The Federal Communications Commission has announced it will waive its rules limiting foreign equity ownership to 25 percent in the Paramount-Warner Bros. case, according to The Verge. The move would clear the way for three sovereign wealth funds run by the governments of Saudi Arabia, Qatar and Abu Dhabi to own 49.5 percent of the company.
The waiver would nearly double the share that foreign governments are ordinarily permitted to hold in a US media company under the standard 25 percent cap.
The three funds named in the report are state-run investment vehicles controlled by their respective governments, meaning the arrangement would place a large minority stake in Paramount-Warner Bros. in the hands of foreign sovereign entities.
The Verge reports that, during Carr’s tenure, the FCC has repeatedly threatened ABC, and its coverage contrasts the agency’s scrutiny of domestic programming with its willingness to permit substantial foreign government ownership of a major media company. The FCC’s own stated rationale for the waiver was not detailed in the available source, and Paramount’s and the FCC’s formal positions on the arrangement are not yet reported here.
Why it matters
Foreign ownership limits on US media companies are intended to guard against outside government influence over broadcast content. A waiver allowing close to half ownership by foreign sovereign wealth funds raises questions about how the FCC applies these limits, though the full terms and the agency's reasoning remain to be confirmed.
Frequently asked questions
How much of Paramount-Warner Bros. would foreign governments be allowed to own?
According to The Verge, the FCC's waiver would allow sovereign wealth funds run by Saudi Arabia, Qatar, and Abu Dhabi to own 49.5 percent of the company, well above the standard 25 percent limit.
What is the FCC's normal foreign ownership limit?
The FCC's rules limit foreign equity ownership to 25 percent, but the agency is waiving that limit in the Paramount-Warner Bros. case.
Which governments' funds are involved?
The Verge reports that the sovereign wealth funds are run by the governments of Saudi Arabia, Qatar, and Abu Dhabi.