Congressman Calls on Paramount to Voluntarily Submit Warner Bros. Discovery Bid for CFIUS Review Over Middle Eastern Investment

California Rep. Sam Liccardo is calling on Paramount to voluntarily submit its $108.4 billion hostile takeover bid for Warner Bros. Discovery for a review by the Committee on Foreign Investment in the United States (CFIUS).

In a new letter sent to Paramount CEO David Ellison, the lawmaker argued that Middle Eastern sovereign wealth funds’ $24 billion in financing raises “serious national security, data-protection, and editorial-independence concerns that warrant full transparency and regulatory scrutiny.”

He noted that Warner’s news and other media companies hold the sensitive personal data of more than 100 million American citizens and that any deal providing foreign investors with governance rights, access to non-public data, or indirect influence over content distribution creates vulnerabilities that foreign governments could exploit.

“A hostile takeover of a major U.S. media company backed by foreign sovereign wealth demands full transparency,” Liccardo said in a statement. “No American wants foreign governments lurking behind the screen—quietly accessing personal data or influencing what families watch every night. That is the risk posed by this deal. Paramount should submit  to the Committee on Foreign Investment in the United States (CFIUS) immediately and assure the public that they’re safe from nefarious foreign actors entering their living rooms.”

The letter to Ellison comes after Liccardo and Congresswoman Ayanna Pressley sent a similar letter to Warner Bros. Discovery CEO David Zaslav in December, in which it demanded that the company file a voluntary notice with the regulator if it accepted Paramount’s offer.

At the time, the pair warned that failure to do so would represent a “serious lapse in fiduciary judgment and could expose the company to significant regulatory and reputational harm.” They also said future Congresses may recommend that regulators push for divestitures, which would “undermine the strategic
logic” of doing a potential deal with Paramount.

Liccardo is asking Ellison to provide answers to the following questions by Jan. 23:

• What concrete structural, contractual, and governance protections will ensure that foreign investors—particularly state-linked entities such as sovereign wealth funds— have no ability, directly or indirectly, to influence editorial decisions, content, news coverage, or distribution priorities?
• What assurances can Paramount provide that foreign investors will have no access to Americans’ private data, proprietary audience analytics, internal communications, or financial information? Who will monitor and enforce compliance with any firewalls, and how will they do so?
• What is the full range of commitments–formally or informally–that you or Paramount have made to these sovereign-wealth funds and their ultimate benefactors in return for committing tens of billions of dollars to this transaction? Please provide all information regarding side agreements, information rights, consultation rights, or strategic understandings beyond passive financial returns.
• Will Paramount commit to full disclosure of the equity and debt financing structure, including ultimate beneficial ownership, investor rights, and governance arrangements, to both regulators and Congress?

More to come…

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