Sens. Elizabeth Warren (D-Mass.) and Richard Blumenthal (D-Conn.) are criticizing the Trump administration for failing to initiate a national security review of Paramount Skydance‘s deal to acquire Warner Bros. Discovery, a proposed $111 billion pact backed by billions of dollars from a trio of Middle Eastern sovereign wealth funds.
The senators have previously called on the Committee on Foreign Investment in the United States, aka CFIUS, to conduct a review of the proposed pact. Led by the Treasury Department, CFIUS is the U.S. government’s interagency body that reviews foreign investments in American businesses for potential national security risks.
Financing for Paramount Skydance’s WBD deal includes funding from Saudi Arabia’s Public Investment Fund (PIF), the Qatar Investment Authority (QIA) and the Abu Dhabi Investment Authority (ADIA). Paramount’s offer for WBD as of Dec. 1 included an aggregate of $24 billion from the Middle Eastern funds, per an SEC filing. Since then, the company has not disclosed how much the three funds are contributing toward its winning bid for Warner Bros. Discovery, which WBD’s board of directors accepted last month after Netflix opted to not counter Paramount’s $31/share offer.
Warren said in a statement to Variety, “Given the cloud of corruption surrounding the Trump administration’s review of this deal from Day One, it’s no surprise that Trump’s Treasury Department is sticking its head in the sand instead of investigating the national security risks of $24 billion from Middle Eastern sovereign wealth funds apparently flooding this deal. It’s American consumers who will pay the price. Thanks to Donald Trump, a Paramount-Warner Bros. merger could mean higher prices and fewer choices, and might allow foreign actors to control what’s on our screens or access our private viewing information.”
Blumenthal alleged that the Trump administration’s “consideration of Netflix’s bid was conspicuously tainted by political interference and outright corruption.” Regarding the Paramount-WBD deal, the senator said in a statement, “I have no confidence that [Treasury] Secretary [Scott] Bessent, or Attorney General [Pam] Bondi, will enforce our antitrust and national security laws when it comes to President Trump’s financial backers. The cost of that rubber-stamp will be higher prices on consumers, substantial job loss in Hollywood, and Gulf countries buying even more influence over Americans’ entertainment.”
Variety has reached out to the Treasury Department for comment.
On Dec. 4, Warren and Blumenthal wrote to Secretary Bessent in his capacity as CFIUS chair, raising questions about the foreign investors backing Paramount’s bid for Warner Bros. and urging him to engage in a review of the proposed deal.
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In a letter dated Feb. 27 — the day after Netflix abandoned its deal to buy Warner Bros.’ studios and streaming business, leaving Paramount with the winning bid for WBD — the senators received a response from Mason Champion, acting principal deputy assistant secretary in the Treasury Department’s Office of Legislative Affairs. However, the letter did not address whether the Paramount-WBD deal would be reviewed by CFIUS.
“As chair of CFIUS, Treasury takes seriously the potential national security risk present in certain transactions by foreign persons,” Champion wrote in the letter. “When a transaction is identified and falls within CFIUS’s statutory jurisdiction, CFIUS thoroughly considers the national security effects of each transaction — that is, an assessment of the threat, vulnerabilities, and consequences to national security related to the transaction — and takes appropriate action.”
CFIUS, if it determines a given transaction would present a threat to national security, may work with the parties on actions to mitigate the concerns. The committee also may issue a recommendation to the U.S. president to block the transaction.
Paramount Skydance, in SEC filings related to its hostile bid for WBD, claimed that the three Middle Eastern sovereign wealth funds “have agreed to forgo any governance rights — including board representation — associated with their non-voting equity investments.” As such, according to Paramount, the deal “will not be within CFIUS’s jurisdiction.”
Netflix co-CEO Ted Sarandos, before his company walked away from the Warner Bros. deal, had been asked about the involvement of the Middle Eastern sovereign funds in Paramount’s WBD bid. Specifically, in a Feb. 23 interview with “BBC Radio 4 Today,” he was asked if he thought it was “wrong in principle for foreign governments to have any sort of financial ownership” in TV news networks.
“I think it’s a bad idea,” Sarandos commented, saying that the Arab wealth funds are in “a part of the world that is not very big on the First Amendment.” About the notion that the three funds would not have board representation in a combined Paramount-WBD, the exec said, “it seems very odd to me, with the level of investment that we’re talking about, that they’d have no influence or editorial control over media in another country.”
Paramount, parent of CBS News, would add CNN to its portfolio under the WBD deal. Paramount Skydance CEO David Ellison earlier this week said that CNN’s “editorial independence will absolutely be maintained” with the new ownership.
Meanwhile, other American politicians have sounded the alarm about the prospect of Paramount’s takeover of Warner Bros. with the backing of foreign investors. On Dec. 10, Democratic U.S. Reps. Sam Liccardo (D-Calif.) and Ayanna Pressley (D-Mass.), said they had “serious national security concerns” over Paramount’s pursuit of Warner Bros. Discovery given the involvement of the Middle Eastern funds. The lawmakers noted that the Saudi Public Investment Fund is controlled by Crown Prince Mohammed bin Salman. According to the representatives, “U.S. intelligence agencies have conclusively implicated Prince Salman in the brutal homicide of Washington Post journalist Jamal Khashoggi, to suppress dissent.”
Liccardo and Pressley wrote in a letter to Warner Bros. Discovery CEO David Zaslav and other WBD board members that a future Democratic-controlled Congress or White House “will review many of the decisions of the current Administration, and may recommend that regulators push for divestitures, which would undermine the strategic logic of this merger.”
SEE ALSO: Paramount’s $111 Billion Warner Bros. Deal Backed by Arab Sovereign Funds Raises Soft Power Concerns
From Variety US