Democrats in Congress are sounding the alarm about the active involvement of Saudi Arabia and other Middle Eastern royal families in Paramount's proposed bid to acquire Warner Bros. Discovery.
Warner Bros. Discovery owns CNN, HBO and the historic film and television studios Warner Bros. in Burbank, behind such beloved American classics as Casablanca, Citizen Kane and Bugs Bunny, as well as blockbuster hits such as Harry Potter, Dirty Harry, The Matrix and Friends.
Late last week, Larry Ellison-controlled Paramount failed in its bid for Warner Bros., in part due to Warner's board of directors' concerns about the financing of the Paramount deal. On Monday, Paramount launched a hostile takeover of Warner Bros. by asking Warner shareholders directly to sell their shares to Warner Paramount for $30 per share.
Paramount's gambit cast doubt on the auction and the Warner board's $72 billion deal with Netflix.
Paramount has long insisted it is the best partner for Warner Bros., in part because of the Ellison family's cozy relationship with President Trump. The company said it could get the Trump administration's blessing.
Paramount's bid is strongly supported by sovereign wealth funds from Saudi Arabia, Abu Dhabi and Qatar. The three royal families agreed to contribute $24 billion, double the amount that Larry Ellison's family agreed to finance Paramount's proposed takeover of Warner Bros., according to regulatory filings. Discovery worth $78 billion.
Trump son-in-law Jared Kushner's private equity firm Affinity Partners will also have a stake in the property.
On Wednesday, U.S. Reps. Sam T. Liccardo (D-San Jose) and Ayanna Pressley (D-Boston) addressed the Warner Bros. board of directors. calling for recognition of the consequences of the sale of the iconic company, which includes the news organization CNN, to foreign governments.
“This deal raises national security concerns because it could transfer significant influence over one of America's largest media companies to foreign-backed financiers,” Liccardo and Pressley wrote.
“Warner platforms reach tens of millions of American households through HBO, Max, CNN, Warner Bros. Pictures, Discovery, and numerous digital and cable channels,” the lawmakers wrote. “They also shape the news, entertainment and cultural content consumed by the American public.”
Transactions by “foreign investors with control rights, access to proprietary data, or indirect influence over the distribution of content create vulnerabilities that can be exploited by foreign governments,” the lawmakers wrote.
Paramount Chairman and CEO David Ellison at the Paramount lot in August.
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Paramount said in its regulatory filing that the three Middle Eastern families agreed to give up voting rights and participation in the company's decisions, even though they contributed more than half the capital required for the deal.
Representatives from Warner Bros. and Paramount declined to comment.
The Ellison family purchased Paramount in August. David Ellison, the chief executive, attended a White House dinner last month to honor Saudi Arabia's Crown Prince Mohammed bin Salman.
Bin Salman's involvement has lawmakers concerned.
“The fund is controlled by Crown Prince Mohammed bin Salman, who (according to a declassified 2021 report from the US director of national intelligence) ordered the murder of US resident and Washington Post journalist Jamal Khashoggi,” the lawmakers wrote.
Trump said over the weekend that the Netflix deal, which would give the streaming service an even bigger presence in the industry, “could be a problem.”
