Congressional Democrats are sounding alarms over the deep involvement of Saudi Arabian and other Middle Eastern royal families in Paramount’s proposed bid for Warner Bros. Discovery.
Warner Bros. Discovery owns CNN, HBO and the historic Warner Bros. film and television studios in Burbank, behind such beloved American classics as “Casablanca,” “Citizen Kane” and Bugs Bunny, and blockbuster hits including “Harry Potter,” “Dirty Harry,” “The Matrix” and “Friends.”
Late last week, the Larry Ellison-controlled Paramount came up short in the bidding for Warner Bros., in part, over the Warner board’s concerns about Paramount’s deal financing. On Monday, Paramount launched a hostile takeover of Warner Bros., appealing directly to Warner shareholders — asking them to sell their Warner stock to Paramount for $30 a share.
Paramount’s gambit has thrown the auction, and the Warner board’s selection of Netflix’s $72-billion deal, into doubt.
Paramount has long insisted that it represents the best partner for Warner Bros., in part, because of the Ellison family’s cozy relations with President Trump. The company has trumpeted its ability to gain the blessing of the Trump administration.
Paramount’s bid is heavily backed by Saudi Arabia, Abu Dhabi and Qatar’s sovereign wealth funds. The three royal families have agreed to contribute $24 billion — twice the amount the Larry Ellison family has agreed to provide in financing for Paramount’s proposed $78-billion takeover of Warner Bros. Discovery, according to regulatory filings.
Trump son-in-law Jared Kushner’s private equity firm, Affinity Partners, would also have an ownership stake.
On Wednesday, U.S. Reps. Sam T. Liccardo (D-San José) and Ayanna Pressley (D-Mass.) called on Warner Bros. board to recognize the consequences of selling the legendary company, which includes news organization CNN, to foreign governments.
“This transaction raises national security concerns because it could transfer substantial influence over one of the largest American media companies to foreign-backed financiers,” Liccardo and Pressley wrote.
“Warner’s platforms reach tens of millions of American households through HBO, Max, CNN, Warner Bros. Pictures, Discovery, and numerous digital and cable properties,” the lawmakers wrote. “They also shape the news, entertainment, and cultural content consumed by the American public.”
Transactions involving “foreign investors with governance rights, access to non-public data, or indirect influence over content distribution [create] vulnerabilities that foreign governments could exploit,” the lawmakers wrote.
Paramount Chairman and Chief Executive David Ellison on the Paramount lot in August.
(Paramount)
Paramount, in its regulatory filings, said the three Middle Eastern families had agreed to give up voting rights and a role in the company’s decision-making — despite contributing more than half the equity needed for the deal.
Representatives of Warner Bros. and Paramount declined to comment.
The Ellison family acquired Paramount in August. David Ellison, the chief executive, attended a White House dinner last month to celebrate Saudi Crown Prince Mohammed bin Salman.
The involvement of bin Salman was concerning to the lawmakers.
“The fund is controlled by Crown Prince Mohammed bin Salman, whom (according to the declassified 2021 report of the U.S. Director of National Intelligence) ordered the murder of U.S. resident and Washington Post journalist Jamal Khashoggi,” the lawmakers wrote.
Over the weekend, Trump said the Netflix deal, which would give the streaming an even more commanding presence in the industry, “could be a problem.”
