Lawmakers Challenge Paramount Skydance’s Bid for Warner Bros. Discovery

Democratic lawmakers are now looking at potentially reversing Paramount Skydance’s acquisition of Warner Bros. Discovery. They cite concerns over support for the hostile takeover from Saudi, Qatari, and UAE sovereign wealth funds, as well as Jared Kushner’s private equity firm, which they believe could be a national security risk.

Reps. Sam Licciardo from California and Ayanna Pressley from Massachusetts expressed these worries in a letter directed at the WBD Board of Directors and Treasury Secretary Scott Bessent. They highlighted the dangers foreign control could pose to one of the largest entertainment companies in the U.S.

In their letter, they warned that a future Congress might review the current administration’s decisions, potentially jeopardizing the merger. This point was initially reported by the news outlet Semafor.

“We encourage the Board to consider these national security and regulatory obligations,” they wrote, emphasizing the need for caution in transactions that might involve foreign influence or the risk of adverse regulatory actions.

Just last Friday, Netflix announced plans to acquire WBD’s film and streaming division for a substantial $72 billion, edging out Paramount’s interests.

However, three days later, Paramount Skydance made a rival hostile takeover offer for WBD, stating $30 per share, which totals around $78 billion—including significant properties like CNN.

Paramount’s bid gains backing from a group that comprises Saudi Arabia’s Public Investment Fund and sovereign wealth funds from Qatar and the UAE. Additionally, Affinity Partners, a firm linked to Jared Kushner, has also backed this bid, prompting concerns about potential conflicts, especially given that his father-in-law’s administration would need to approve the merger.

Licciardo and Pressley pointed out that the influence of foreign investors could impact decisions regarding editorial independence, content moderation, and even the management of American personal data. They suggested that even indirect influence could be a national security issue if the interests of these foreign investors don’t align with those of the U.S.

To address these concerns, Paramount has stated that the three Middle Eastern sovereign wealth funds and Kushner’s firm have agreed not to exercise governance rights associated with their non-voting equity stakes, according to SEC filings.

Paramount aims to structure its bid in a way that minimizes scrutiny from the Committee on Foreign Investment in the United States, which oversees deals that might present national security concerns.

Both parties’ lawmakers seem hesitant about allowing either Netflix or Paramount to acquire WBD, citing potential antitrust issues. The Post has reached out to WBD, Netflix, and Paramount for further comments.