Entertainment giant Paramount Skydance (PSKY) has taken a key regulatory step in its plan to acquire Warner Bros. Discovery (WBD). The company has filed with the Federal Communications Commission (FCC) to seek approval for higher foreign ownership in its U.S. broadcast business.
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Gulf Investors Commit $24 Billion to Back the Deal
The deal is backed by three Middle East sovereign wealth funds, which are investing about $24 billion combined. These include Saudi Arabia’s Public Investment Fund (PIF), Abu Dhabi-backed L’imad Holding, and the Qatar Investment Authority. Based on the filings, foreign investors could own just under 50% of Paramount’s equity after the deal closes.
This raises a regulatory hurdle because Paramount owns CBS and its network of local television stations. Under U.S. law, foreign investors are generally barred from owning more than 25% of companies that hold broadcast licenses. Since this deal could push that number close to 50%, Paramount needs special approval from the FCC.
Paramount said allowing more foreign investment will help it compete better with global media rivals.
Ellison Family and RedBird Retain Full Control
To address concerns, Paramount said control will remain in U.S. hands. The Ellison family and RedBird Capital will hold all voting power, while foreign investors will be passive, with no role in decisions or board seats.
The company has also added a safety net. If foreign funding does not come through, the Ellison family has agreed to fund the equity portion of the deal to ensure it still closes.
If approved, nearly half of the combined company would be backed by foreign investors.
Investors will watch how quickly the FCC reviews the request and whether any conditions are added, while also tracking progress on debt funding and any signs of regulatory pushback.
Is PSKY Stock a Buy or Sell?
Analysts remain cautious about Paramount Skydance’s long-term prospects amid the ongoing WBD merger process. On TipRanks, PSKY has a Moderate Sell consensus rating based on five Holds and five Sell ratings. The average Paramount Skydance price target of $11.38 implies 7.41% upside potential from current levels. Year-to-date, PSKY shares have dropped 20.6%.
