Paramount’s agreement to acquire Warner Bros. Discovery is facing new scrutiny after disclosures revealed that a major portion of the deal’s financing is coming from Middle Eastern sovereign wealth funds.
Regulatory filings tied to the $110 billion transaction, obtained by Variety, show that approximately $24 billion of the capital backing the merger will come from government-linked funds in Saudi Arabia, Qatar, and Abu Dhabi.
The investors include Saudi Arabia’s Public Investment Fund, the Qatar Investment Authority, and Abu Dhabi’s L’imad Holding Company.
Paramount says the funds will not hold formal power within the company. In documents submitted to regulators, the company stated that the investors will not receive board seats, voting authority, or other governance rights, describing their role as strictly financial.
But the disclosure has prompted debate across the media and policy sectors because the merged company would control some of the most influential entertainment and news properties worldwide, including CNN, HBO, Warner Bros. Studios, and HBO Max.
The issue surfaced publicly during the bidding battle that unfolded earlier this year. At the time, Netflix was competing with Paramount for control of Warner Bros. Discovery before ultimately stepping away from the deal.
Speaking in London shortly after the BAFTA Film Awards, Netflix co-CEO Ted Sarandos raised concerns about the structure of Paramount’s financing. Sarandos said the involvement of Gulf sovereign funds was troubling because the investment originates from “a part of the world that is not very big on the First Amendment.”
He added that the scale of the funding makes the claim of passive ownership difficult to accept. “It seems very odd to me with the level of investment that we’re talking about that they’d have no influence or editorial control over media in another country,” Sarandos said.
The sale process began when Paramount pursued a full acquisition of Warner Bros. Discovery, offering to purchase the company outright rather than separating its assets. Netflix entered the race with a competing proposal focused on acquiring Warner’s studio and streaming divisions while spinning off its cable networks.
Warner’s board initially favored Netflix’s structure but kept negotiating as Paramount increased its bid. After several revisions, Paramount ultimately presented the higher offer for the entire company.
