Paramount’s Warner Bros. Discovery deal may have an even bigger Middle East angle than first reported.
Variety reports that the merged Paramount-Warner Bros. Discovery company will be 49.5% owned by foreign investors after closing, with 38.5% of the equity held by three Middle Eastern funds: Saudi Arabia’s Public Investment Fund, the United Arab Emirates’ L’imad entities, and the Qatar Investment Authority.
Middle East Funds Already Start At 38.5%
According to Paramount’s FCC filing, Saudi Arabia’s PIF will own 15.1% of the company. The UAE fund will own 12.8%. Qatar Investment Authority will own 10.6%.
Combined, the three Middle Eastern funds will own 38.5% of Paramount-WBD if the deal closes.
Paramount has said those investors will not have board seats or voting shares, with David Ellison, Larry Ellison, and RedBird Capital keeping control of 100% of the voting power.
Filing Opens Door To A Bigger Stake Later
Now here is the bigger part.
Paramount is asking the FCC to approve foreign ownership above the normal 25% benchmark because the deal involves broadcast TV station licenses, which are subject to federal limits on foreign ownership.
The company is also asking regulators to specifically approve certain foreign investors to hold more than 5% in Paramount, another threshold that requires FCC review because the deal involves broadcast licenses.
The filing then goes a step further.
Paramount is asking for advance approval that would allow those non-controlling foreign investors to increase their indirect equity and/or voting interests up to 20% in Paramount at some point in the future.
Since the Saudi, UAE, and Qatar funds are already listed at a combined 38.5%, all three reaching 20% would put their combined stake at roughly 60%.
In plain English, the Middle East funds could potentially become majority economic owners of Paramount-WBD, even if they do not control the company’s votes.
Control And Ownership Are Not The Same Thing
Paramount’s position is that the structure does not hand control to foreign investors. The company says the Ellison family and RedBird will keep voting control through U.S. entities.
That is the key distinction. The Middle Eastern funds could own a massive financial stake in the company, and potentially a majority economic stake later, while Ellison and RedBird still control the voting power on paper.
So the filing does not say Saudi Arabia, Abu Dhabi, and Qatar will run Paramount-WBD.
It says Paramount wants FCC approval for a structure that could allow foreign investors to hold far more equity than the standard 25% benchmark.
This Lines Up With What We Reported On The SnyderVerse
This is also something we have covered before, going back to when we were first told Zack Snyder was bringing back the SnyderVerse.
Our insiders pointed us to comments from Hollywood producer Patrick Caligiuri, who said he was the first to report Saudi Arabia’s interest in Warner Bros. Discovery back in October.
According to Caligiuri, who had recently returned from Saudi Arabia, the deal was nearly done.
He described Saudi Arabia’s acquisition of Warner Bros. Discovery as “one signature away” from completion.
At the time, that sounded massive. Now, Paramount’s own FCC filing shows just how serious the Middle Eastern money behind the WBD deal really is and essentially confirms what Caligiuri reported, that the Saudis were indeed “one signature” away from buying Warner Bros. Discovery.
The Gulf Money Story Just Got Bigger
The headline is no longer simply that Gulf funds are backing Paramount’s Warner Bros. Discovery takeover.
The bigger story is that Saudi Arabia, Abu Dhabi, and Qatar are set to own 38.5% of Paramount-WBD at closing, while Paramount is also asking regulators to allow certain foreign investors to increase their stakes up to 20% each later.
If all three Middle Eastern funds eventually reached that level, they could collectively own around 60% of Paramount-WBD’s equity.
That would make them potential majority economic owners, even while Ellison and RedBird keep voting control.
