How Gulf-backed Paramount cleared last hurdle in $110 billion Warner Bros deal
US settlement sets film and worker commitments in deal backed by Gulf investors
Dubai: Paramount Skydance has moved closer to buying Warner Bros. Discovery after settling lawsuits brought by 12 US states and the Writers Guild of America. The deal also has approval from the US Federal Communications Commission for substantial investment from funds in the UAE, Saudi Arabia and Qatar.
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The two developments address different obstacles. The states challenged the merger over its possible effect on competition, film production and prices. The FCC reviewed foreign ownership because Paramount owns US broadcast stations, including those linked to CBS.
Paramount values Warner Bros. Discovery’s shares at $81 billion. Its $110 billion valuation includes debt. The states’ settlement still needs a judge’s approval, and the acquisition has not yet closed.
What did Paramount promise?
Under the five-year settlement, the combined company must release at least 30 films a year for the first two years and 32 a year for the next three. At least four releases each year must be independent films.
Paramount must spend at least $1.5 billion more on US film production over five years than it spent in 2025. It will also put $25 million into a fund to buy independent films. If it misses the annual film targets, it could be required to sell Miramax Studios and pay $30 million for each missed film.
A separate $47.5 million fund will support training and career development for workers displaced by the merger. Paramount has agreed to honour existing union contracts and negotiate with unions in good faith.
The Writers Guild settled its own case but remains opposed to the merger’s likely effect on the industry. “We continue to believe the merger will cause damage to writers and the industry at large,” it said. Its agreement with Paramount prohibits writer layoffs at CBS News Broadcast for five years and provides $17.5 million for the guild’s health fund.
Where do the Gulf funds fit in?
Saudi Arabia’s Public Investment Fund, the UAE’s L’imad Holding Company and the Qatar Investment Authority have committed a combined $24 billion to help fund the acquisition, according to multiple reports.
The FCC approved Paramount’s request to let foreign investors hold indirect stakes above the usual 25 per cent review threshold. Paramount sought, and received, a ceiling of up to 100 per cent indirect foreign equity ownership to allow for potential future investment. That ceiling does not mean the Gulf funds will own 100 per cent of the company. Their proposed holdings carry no voting rights.
Paramount says the investors will have no governance rights and that the family of chief executive David Ellison and RedBird Capital will retain control. The FCC said it accepted Paramount’s assurance that the foreign investors could not influence decisions about its broadcast stations. Critics remain concerned that large financial stakes could create influence even without formal voting power, particularly with CBS and CNN set to sit within the same company.
The states’ settlement requires Paramount to create a board intended to help protect editorial independence at both news organisations. It also requires the company to negotiate deals for Paramount’s and Warner Bros. Discovery’s basic cable channels separately for five years, a measure aimed at preserving competition for cable providers and viewers.
For moviegoers and streaming customers, the settlement guarantees film output for a limited period, but it does not set subscription or ticket prices. For Hollywood workers, it provides production commitments and a support fund as Paramount pursues a previously stated goal of $6 billion in savings from the merger.
