Congressional Democrats are sounding alarms over the deep involvement of Saudi Arabian and other Middle Eastern royal families in Paramount\u2019s proposed bid for Warner Bros. Discovery.<\/p>\n
Warner Bros. Discovery owns CNN, HBO and the historic Warner Bros. film and television studios in Burbank, behind such beloved American classics as \u201cCasablanca,\u201d \u201cCitizen Kane\u201d and Bugs Bunny, and blockbuster hits including \u201cHarry Potter,\u201d \u201cDirty Harry,\u201d \u201cThe Matrix\u201d and \u201cFriends.\u201d<\/p>\n
Late last week, the Larry Ellison-controlled Paramount came up short in the bidding for Warner Bros., in part, over the Warner board\u2019s concerns about Paramount\u2019s deal financing. On Monday, Paramount launched a hostile takeover of Warner Bros., appealing directly to Warner shareholders \u2014 asking them to sell their stock to Paramount for $30 a share. <\/p>\n
On Wednesday, Paramount sent a letter to Warner shareholders asking that they tender their shares, which would allow Paramount to gain the company through its hostile takeover.<\/p>\n
In the letter to Warner shareholders, Paramount\u2019s Chairman David Ellison wrote: \u201cOur public offer … delivers superior value and a faster, more certain path to completion than the transaction announced with Netflix.\u201d<\/p>\n
It added that Paramount\u2019s offer would be \u201cfinanced by $41 billion of new equity backstopped by the Ellison family and RedBird Capital and $54 billion of debt commitments from Bank of America, Citi and Apollo.\u201d <\/p>\n
It did not disclose that the sovereign wealth funds were the majority of the new equity. Paramount\u2019s gambit has thrown the auction, and the Warner board\u2019s selection of Netflix\u2019s $72-billion deal, into doubt. <\/p>\n
Paramount has long insisted that it represents the best partner for Warner Bros., in part, because of the Ellison family\u2019s cozy relations with President Trump. The company has trumpeted its ability to gain the blessing of the Trump administration for its proposed deal. <\/p>\n
Paramount\u2019s bid is heavily backed by Saudi Arabia, Abu Dhabi and Qatar\u2019s sovereign wealth funds. The three royal families have agreed to contribute $24 billion \u2014 twice the amount the Larry Ellison family has said it would provide in financing for Paramount\u2019s proposed $78-billion takeover of Warner Bros. Discovery, according to regulatory filings.<\/p>\n
Trump son-in-law Jared Kushner\u2019s private equity firm, Affinity Partners, would also have an ownership stake. <\/p>\n
On Wednesday, U.S. Reps. Sam T. Liccardo (D-San Jos\u00e9) 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 billionaire foreign rulers. <\/p>\n
\u201cThis transaction raises national security concerns because it could transfer substantial influence over one of the largest American media companies to foreign-backed financiers,\u201d Liccardo and Pressley wrote in a Wednesday letter to Warner Bros. Discovery Chief Executive David Zaslav.<\/p>\n
\u201cWarner\u2019s platforms reach tens of millions of American households through HBO, Max, CNN, Warner Bros. Pictures, Discovery, and numerous digital and cable properties,\u201d the lawmakers wrote. \u201cThey also shape the news, entertainment, and cultural content consumed by the American public.\u201d<\/p>\n
The concerns adds a new wrinkle to the Warner Bros. auction, which already was laced with politics. Trump has said he planned to be involved in the decision-making, and he\u2019s offered praise for both Larry and David Ellison and Netflix Co-Chief Executive Ted Sarandos, who has visited with the president leading up to last week\u2019s auction deadline.<\/p>\n
Transactions involving \u201cforeign investors with governance rights, access to non-public data, or indirect influence over content distribution [create] vulnerabilities that foreign governments could exploit,\u201d the lawmakers wrote. They asked Warner board members, should it opt for Paramount, to undergo a federal review of the transaction to determine whether the proposed tie-up, and involvement of the Middle Eastern investors, would pose a national security risk. Treasury Secretary Scott Bessent would lead any such review.<\/p>\n
<\/p>\n
Paramount Chairman and Chief Executive David Ellison on the Paramount lot in August.<\/p>\n
(Paramount)<\/p>\n
Paramount, in its regulatory filings, said the three Middle Eastern families had agreed to give up voting rights and a role in the company\u2019s decision-making \u2014 despite contributing more than half the equity needed for the deal. <\/p>\n
Paramount has said it would not be required to submit the proposed Warner transaction to the federal Committee on Foreign Investments in the U.S. (CFIUS) because the sovereign wealth funds have waived their governance rights, should the Ellison family prevail in the bidding for Warner Bros.<\/p>\n
\u201cParamount might not need CFIUS but the American people do,\u201d Liccardo said in an interview with The Times. \u201cWe need to ask ourselves: What is of value that would command a $24 billion investment from three royal families?\u201d<\/p>\n
Traditional film and TV production companies are part of \u201can industry that is struggling mightly,\u201d Liccardo said. \u201cSo if you look at an acquisition like this … if not for the going concern, what particular assets are of value? Consider the sensitive personal data of tens of millions of Americans, and ask how valuable that data might be?\u201d<\/p>\n
Representatives of Warner Bros. and Paramount declined to comment.<\/p>\n
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. <\/p>\n
The involvement of bin Salman and his Saudi Public Investment Fund was concerning to the two lawmakers. <\/p>\n
\u201cThe 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,\u201d the lawmakers wrote. <\/p>\n
They noted that Kushner\u2019s Affinity Partners was also backed by a $2 billion investment from the Saudi Public Investment Fund. Paramount has not disclosed how much Kushner would contribute to the Paramount-Warner deal.<\/p>\n
Liccardo\u2019s Northern California district includes Los Gatos, where Netflix is based. Liccardo, in the interview, said Netflix was unaware of his effort until after the letter was drafted.<\/p>\n
Over the weekend, Trump said the Netflix deal, which would give the streaming an even more commanding presence in the industry, \u201ccould be a problem.\u201d<\/p>\n
Meanwhile, U.S. Sen. Chris Murphy (D-Conn.) has voiced concerns about Netflix\u2019s dominance should it win Warner. <\/p>\n
\u201cThe Netflix purchase of Warner Bros. would be a disaster,\u201d Murphy wrote on X last weekend. \u201cIt\u2019s patently illegal. But there are some quietly rooting for it because a Paramount takeover (that includes CNN) would be worse.\u201d <\/p>\n","protected":false},"excerpt":{"rendered":"Congressional Democrats are sounding alarms over the deep involvement of Saudi Arabian and other Middle Eastern royal families…\n","protected":false},"author":2,"featured_media":89668,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[49848,49847,15327,5177,1804,49846,33403,48,52,51,49844,7834,47,50,49,9233,6336,49845,48532,33408,26368],"class_list":["post-89667","post","type-post","status-publish","format-standard","has-post-thumbnail","category-los-angeles","tag-72-billion-deal","tag-ayanna-pressley","tag-bid","tag-cnn","tag-company","tag-congressional-democrats","tag-hbo","tag-la","tag-la-headlines","tag-la-news","tag-larry-ellison","tag-lawmaker","tag-los-angeles","tag-los-angeles-headlines","tag-los-angeles-news","tag-netflix","tag-paramount","tag-serious-national-security-concern","tag-transaction","tag-warner-board","tag-warner-bros-discovery"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/89667","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=89667"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/89667\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/89668"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=89667"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=89667"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=89667"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}