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.
A mandatory CFIUS review would be triggered if a foreign entity obtains a 25% or more voting interest in a U.S. company and a foreign government holds a 49% or greater voting interest in that foreign investor. However, experts previously told TheWrap that CFIUS reviews can look at “practical influence, access to information, and leverage” through other means, such as access to non-public strategic information, special veto rights, board observer rights, or any meaningful say over content, data, or technology decisions.
Paramount has said that the Middle Eastern funds’ do not reach that threshold and that the Ellison family would have majority control over a combined company. It also noted that the funds agreed to forego all governance rights, including board representation. An individual familiar with the matter previously told TheWrap they have “no special information rights or anything of that nature.”
Under its latest revised bid, Oracle co-founder Larry Ellison also offered an “irrevocable personal guarantee” to cover $40.4 billion of the equity financing in Paramount’s bid through the Ellison family trust.
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?
The inquiry comes as Paramount’s bid is under review by the Department of Justice, who has requested additional information from the media giant. In addition to filing for Hart-Scott-Rodino (HSR) approval with U.S. regulators, Paramount previously said it announced its case to the European Commission, opening the path to pre-notification discussions. Paramount has said it expects a deal with WBD to close within 12 months.
A Paramount spokesperson did not immediately return TheWrap’s request for comment on the letter.
