David Ellison-run Paramount Skydance has reportedly signed deals to get nearly $24 billion from three Gulf wealth funds to help back its acquisition of Warner Bros. Discovery.
Saudi Arabia’s Public Investment Fund has agreed to provide roughly $10 billion for the mega media merger, while the Qatar Investment Authority and Abu Dhabi’s L’imad Holding Co. have also signed equity commitments with Paramount, the Wall Street Journal reported, citing unnamed sources with knowledge of the matter.
The commitments will help offset the costs of the $81 billion deal for Paramount CEO Ellison and his father Larry Ellison, the mega-billionaire co-founder of Oracle and a close ally of President Trump’s.
The elder Ellison previously promised to back the deal even if Paramount couldn’t secure outside support. Gerry Cardinale’s private equity firm RedBird Capital is also backing the deal.
The Gulf funds’ commitment comes as tensions remain high in the Middle East due to the US and Israel’s war with Iran, as Iranian strikes have broadened to neighboring regions – including attacks on key energy facilities in Qatar and Saudi Arabia, which could further disrupt global energy markets.
Meanwhile, Paramount’s deal for WBD – which would create a media behemoth including HBO, CNN, CBS, “Harry Potter” and “The Godfather” – is awaiting regulatory review in Europe, where it is likely to face more challenges than in the US, according to experts.
Executives at Paramount, though, have told employees to prepare to close the deal as soon as the end of July, according to the Wall Street Journal.
Paramount declined to comment.
After a brutal monthslong bidding war with Netflix, Paramount in February emerged victorious in the battle to acquire WBD – in part arguing that its deal would be able to secure regulatory approval because the Ellison family could cover the entire cost if necessary.
The Saudi funds’ involvement “potentially complicates things a bit,” Derek Reisfield, a former media executive at CBS News and McKinsey, and co-founder of MarketWatch, told The Post.
But the commitments are “for non-voting shares and they will not be represented on the board, so that eliminates some of the regulatory scrutiny,” he added.
The deal’s main regulatory challenges in the US are expected to come from the Committee on Foreign Investment in the US, or CFIUS, and the Federal Communications Commission.
Since the Gulf investors will not be given voting rights in the new Paramount-WBD company, the investment will likely gain approval from CFIUS, according to Reisfield.
It’s also unlikely to face an FCC review since each individual investor will own far less than the 25% cap for foreign investors, he said.
An early version of Paramount’s bid for the company included backing from Chinese firm Tencent and Affinity Partners, the private-equity firm founded by Trump’s son-in-law Jared Kushner. Tencent and Kushner are no longer involved, according to the Journal.
The company has also received $54 billion of debt commitments from Bank of America, Citigroup and Apollo Global Management, for a total deal value of $110 billion including debt.
Paramount secured the Warner Bros. deal after it sweetened its bid to include an agreement to pay the $2.8 billion termination fee to Netflix, as well as a “ticking fee” worth $650 million for WBD shareholders for each quarter the transaction has not closed. It also pledged to reimburse a potential $1.5 billion in debt refinancing, if incurred.
In an SEC filing in December, Paramount disclosed that its offer for WBD included $24 billion from a group of Middle Eastern funds.
It had denied a report in November that it was working with a consortium of Middle Eastern sovereign wealth funds on an offer, calling it “categorically inaccurate.”
Last month, Omeed Assefi, the acting attorney general for the Department of Justice’s antitrust division, said the deal will “absolutely not” have a fast track to approval for political reasons, nodding to the Ellison family’s relationship with Trump.
During a press gaggle last October, Trump lavished praise on the Ellisons, who currently control CBS News through their $8.4 billion Paramount Skydance merger.
“Larry Ellison is great, and his son David is great. They’re friends of mine. They’re big supporters of mine,” Trump told reporters at the time.
“They will make the right decisions. They’re going to revitalize CBS – hopefully, they’ll bring it back to its former glory.”
Warner Bros. has set a date of April 23 for a special shareholders meeting to vote on the merger.
