Foreign Ownership & the FCC

Red Flags from Networks to National Security

Author: Deborah Jaramillo

Paramount Skydance’s filing with the Security and Exchange Commission on April 5, 2026 identified the equity syndicate financing the deal. In addition to the Ellison Revocable Trust and Redbird Capital, a U.S. private equity firm, there are three sovereign wealth funds listed: Public Investment Fund (Saudi Arabia), L’imad Holding (Abu Dhabi), and QIA TMT Holding (Qatar). A separate filing disclosed the extent of these funds’ involvement, with Saudi Arabia committing $10 billion, Abu Dhabi $7 billion, and Qatar $7 billion for non-voting shares. Paramount Skydance has since confirmed that the combined total of $24 billion would give the funds a 49.5% ownership stake of the merged company—15.1% to the Saudi Arabia fund, 12.8% to the Abu Dhabi fund, and 10.6% to the Qatar fund. 

Officially, all voting shares would remain in the hands of Ellison and Redbird, so these foreign parties would be owners with no board seats and no voice in shareholder meetings. Paramount Skydance acknowledges, however, that having an equity syndicate opens the door to “strategic and commercial opportunities.” The Middle East funds’ significant ownership stake and participation in the conversation through these “strategic and commercial opportunities” has the potential to influence decision-making and ventures for years to come. U.S. lawmakers, regulators, and courts should take this influence and its potential consequences seriously. Because the Federal Communications Commission (FCC) has a mandate to uphold the airwaves for the American people, it has the power to block the merger unilaterally. It is vital to understand how FCC foreign ownership limits came to be, how they have been implemented, and how this merger would compromise American control of broadcasting.

Foreign Ownership has been Restricted in Broadcasting Since 1912

The roots of restrictions on contemporary foreign ownership precede the dominance of broadcasting and historically have had very little to do with unwanted influence from abroad. Rita Zajácz has documented this history in depth. The original restriction in the Radio Act of 1912 primarily targeted foreign-owned wireless stations operating on U.S. soil. Before this rule was enacted, the U.S. Navy feared that these stations did the bidding of their home governments and, worse, in the event of a war, would sabotage transmitters and release information beneficial to their countries. Further revisions limited foreign investment in all U.S. broadcasting companies and required disclosure of ownership percentages as well as nationalities of corporate officers. These 1912 foreign ownership rules had a clear and immediate impact on both broadcasting and on national security. They helped the Navy subvert the British-owned Marconi Company’s burgeoning transmitter monopoly, allowing the U.S. to weaken Great Britain’s hold on international communications. After World War I, the Radio Corporation of America (RCA) was formed to supplant American Marconi entirely, and the Navy essentially purged RCA of any remnants of the British company. 

Foreign ownership rules have evolved over the last century. Today, the relevant section of the Telecommunications Act of 1996 is 310: “Limitation on Holding and Transfer of Licenses.” Two provisions explain the limitations in two different scenarios. 310 (b)(3) states that a license cannot be issued to a corporation in which foreign entities hold more than 20% of its stock. 310 (b)(4) states that a license cannot be issued to a corporation “directly or indirectly controlled by any other corporation” with foreign entities holding more than 25% of its stock. This limit is substantially lower than the 49.5% stake that foreign funds could have if the merger proceeds. 

The FCC Is Supposed to Serve the Public Interest

The FCC is involved in this merger approval because Paramount Skydance’s owned-and-operated CBS stations mean the studio must abide by foreign ownership limits. Section 310(b)(4) of the Telecommunications Act of 1996 sets the investment limit in stations at 25%, but it also provides for a public interest exception.* The FCC’s January 2026 clarification of foreign ownership rules elaborates on that flexibility inferred by “public interest" by identifying the two forces tugging at its decision-making processes: “the dual public interest objectives of prohibiting potentially harmful foreign investment and promoting non-harmful foreign investment.” The Commission interprets harm as “national security risks and other concerns” and further interprets the public interest as the creation of “hundreds of thousands of jobs and significant wealth for the United States.” The proposed Paramount-Warner Bros. merger notably brings no promise of job creation, and it is widely acknowledged that in reducing “redundancies,” thousands of jobs would likely be lost. Regardless, by couching the public interest in terms of jobs and wealth, the Commission also ignores potential impacts on audiences/consumers and programming diversity.

The FCC’s obligation to the public interest has always been tempered by the political alliances of commissioners and a reliance on media companies for information and expertise. Whether captured by the industry or not, its history demonstrates an enduring belief that the health of commercial broadcasting is vital to the public interest. The Commission inherited a regulatory approach championed by Herbert Hoover during his tenure at the Department of Commerce: work with, not against, the industry for the good of the country. The FCC’s current understanding of the public interest, however, explicitly skews away from the publics that consume and create media. At the same time, the regulatory agency has developed an adversarial posture toward industry figures who are at odds with the Trump administration, including CBS News and late-night hosts Stephen Colbert and Jimmy Kimmel. The FCC’s unwillingness to subject this merger proposal to rigorous review, particularly foreign ownership rules, underscores its alignment with the Trump Administration’s ideological goals.

In a letter to FCC Chairman Brendan Carr, Senator Cory Booker and other Democratic senators (Charles E. Schumer, Richard J. Durbin, Sheldon Whitehouse, Richard Blumenthal, Mazie K. Hirono, and Elizabeth Warren) argue that, by promising “minimal review” of this merger, the FCC is abdicating its responsibility to the public, whose private information and “viewing habits” would be available to foreign entities. Indeed, the Senators contend that even non-voting investors, like the sovereign wealth funds named by Paramount Skydance, “can exercise influence through information rights, contractual covenants, content output agreements, licensing deals, and through the implicit leverage that comes from being a major creditor or equity participant in a combined entity that controls CBS, CNN, HBO, and Warner Bros. Studios.” Although the letter specifically notes the potential impact on decision-making at news outlets, producers who work with or for the merged company in film, television, video games, and sports would also be vulnerable.

The senators’ joint letter identifies Saudi Arabia’s fund as especially problematic, given our “conflicting interests” and the finding that Crown Prince Mohammed bin Salman had a U.S. journalist murdered. The letter characterizes these countries’ investment as an undeserved reward and the investment structure as a cunning circumvention of necessary review. Without seats on the board or a voice in shareholder meetings, the three Gulf investors managed to bypass review by the Committee on Foreign Investment in the United States (CFIUS), a body that assesses national security threats posed by foreign investment. And yet even without board seats, their impact would be felt—and felt for years to come.

The Possible Impact of Foreign Investors is Wide Ranging

American television has never housed a free flow of ideas unhindered by government censorship or industry self-regulation. At the local level, TV stations exist to serve their communities, providing locally produced fare along with national programs. As a result, TV history is full of incidents involving region-specific program restrictions. From the prohibition of race-mixing on southern TV stations in the 1950s and 60s to the exclusion of a network’s programs from station lineups, licensees are entitled, for better or worse, to take into account the sensibilities of their neighbors. These restrictions have existed alongside network standards and FCC rules. Considering the sovereign funds’ large stakes in the proposed merger (even without voting rights), the amount of pressure already placed on networks by our government to cancel programs and fire entertainers, the purging of reporters from CBS News, the willingness of network executives to bend to direct and indirect threats to broadcast licenses, and the strong relationships between the Trump Administration and the three countries providing investment funds, the outlook for non-interference by foreigners on American airwaves is bleak.

In addition to the FCC, other government agencies have some degree of authority over existing or potential foreign owners of media organizations and the distribution of foreign programs. The 1938 Foreign Agents Registration Act (FARA), which falls under the purview of the Department of Justice, has required various radio and television companies that either broadcast or syndicate programs produced by foreign countries or produce programs for foreign countries to register as foreign agents. The 1982 Foreign Missions Act, which falls under the purview of the Department of State, also includes foreign-controlled media companies in its definition of “foreign missions.” Foreign missions are required to disclose properties and employee information to the State Department. At the heart of these laws are concerns for national security, which are addressed by efforts to prevent the spread of foreign propaganda or the subversion of international law by foreign entities operating in the U.S.. 

Domestic opponents to the Paramount-Warner Bros. merger cite these main threats that foreign ownership poses: investors’ outsized influence over President Trump, given his family’s relationships with these governments; foreign access to U.S. consumer information; increased opportunities for foreign soft power within the U.S.; and foreign intrusion into U.S. news and entertainment. And because TV travels, the U.S. government is not the only one to weigh in. In early June, the UK’s Competition and Markets Authority launched its own investigation into the merger, citing concerns about anti-competitive behavior. The European Union also launched an investigation into the effects of foreign ownership on their internal market. Despite their concerns, both the UK and EU have since approved the merger, but the same need not and should not happen in the U.S..

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* Section 310(b)(4) states that the FCC can withhold a license from “any corporation directly or indirectly controlled by any other corporation of which more than one-fourth of the capital stock is owned of record or voted by aliens, their representatives, or by a foreign government or representative thereof, or by any corporation organized under the laws of a foreign country, if the Commission finds that the public interest will be served by the refusal or revocation of such license.” Telecommunications Act of 1996, Pub. LA. No. 104-104, 110 Stat. 56 (1996)