A Democratic congressman is calling on Paramount to submit any acquisition of Warner Bros. Discovery to a foreign ownership review, even if the David Ellison-led company does not believe that it is technically required.
Rep. Sam Liccardo (D-CA) wrote in a letter to Ellison that”voluntary filing would demonstrate good faith, enhance public trust, and provide assurance of the vetting of national-security, private data and influence risks.”
Warner Bros. Discovery has so far rejected Paramount’s offers for its assets, and has instead entered into a deal with Netflix. The streaming giant plans to acquire WBD‘s studio and streaming assets, with cable channels spun off into a separate entity.
Earlier this week, Paramount filed suit against WBD, seeking specific information on why its $30 per share bid was rejected. It also plans a proxy fight to install its own slate of directors.
On Capitol Hill, lawmakers have raised concerns about eith combination of Paramount and Netflix with WBD.
Last month, Liccardo and Rep. Ayanna Pressley (D-MA) sent a letter to WBD CEO David Zaslav, expressing concerns about foreign investors in Paramount’s financing.
In his latest letter, Liccardo wrote that “updated SEC filings indicate that Paramount’s evolving financing structure continues to include substantial foreign participation, including Abu Dhabi–owned L’imad Holding Company PSJC, the Qatar Investment Authority, and the Saudi Public Investment Fund (“PIF”). Saudi Crown Prince bin Salman controls the PIF.”
He wrote that the Committee on Foreign Investment in the United States has jurisdiction to review the transaction, even as Paramount has said that its investors will not have control over the combined company.
He wrote, “CFIUS regulations define ‘control’ broadly, and the law does not require the acquisition of a majority interest in the U.S. business. Rather, CFIUS concerns arise where a foreign actor’s minority interests confer a significant ability to influence ‘important matters’ related to the American entity. The law alternatively authorizes CFIUS review where foreign entities could obtain access to Americans’ ‘sensitive personal data,’ including viewing histories, behavioral profiles, frequently used passwords, credit card and financial data, and personal device and location information.”
A Paramount spokesperson did not immediately respond to a request for comment.
Liccardo also asked Ellison a series of questions, including whether the transaction will include protections to ensure that foreign investors “have no ability, directly or indirectly, to influence editorial decisions, content, news coverage, or distribution priorities.”
“Given the nature and reach of Warner’s news and other media companies, which hold the sensitive personal data of more than 100 million American citizens, I believe this acquisition raises serious national security, data-protection, and editorial-independence concerns that warrant full transparency and regulatory scrutiny,” the congressman wrote.