FCC Chairman Brendan Carr has publicly backed the proposed merger between Paramount Skydance and Warner Bros. Discovery, describing the $111 billion deal as “a lot cleaner” than the since-abandoned proposal for Netflix to acquire WBD.
Carr made the comments to CNBC, citing the scale of what a Netflix-WBD combination would have produced. Merging Netflix with HBO Max would have created a streaming entity of a size that carried “a lot of concerns in DC,” he said, adding that Netflix “would have had a very difficult path forward from a regulatory perspective.” Netflix ultimately withdrew from the bidding rather than match Paramount’s offer.
Why This Deal Looks Different to Regulators
Although the Paramount/WBD deal would unite Paramount+ and HBO Max under one roof, Carr said it “does not raise at all the same types of concerns” as the Netflix bid. “I think there’s some real consumer benefits that could emerge from it,” he said.
The FCC’s formal role in the merger is limited. Warner Bros. Discovery holds no broadcast licenses, so there are no license transfers to review. The FCC does have a stake, however, because Paramount Skydance is already an FCC licensee operating 28 local CBS stations, and the company must comply with the agency’s foreign ownership rules.
Carr told CNBC that the deal’s primary regulatory path runs through the Justice Department, and that “if there’s any FCC role at all, it will be a pretty minimal role. I think this is a good deal and I think it should get through pretty quickly.” A Bloomberg report noted the Justice Department is not expected to block the merger, with the agency having not challenged a deal on antitrust grounds since President Donald Trump took office.
Sovereign Wealth Funds and the Foreign Debt Question
The more nuanced regulatory question involves how Paramount is financing the acquisition. In December, the company disclosed a $24 billion commitment from three sovereign wealth funds based in Saudi Arabia, Abu Dhabi, and Qatar. Those funds agreed at the time to “forgo all governance rights (including board representation).”
Carr told the Financial Times that this foreign debt is unlikely to delay the merger. “All the information that I’ve seen about that foreign debt is that it would qualify under FCC rules as what we call bona fide debt, meaning it would be a very quick, almost pro forma review,” he said. FCC precedent defines bona fide debt as financing arrangements in which a creditor holds no ownership or voting interest in the licensee.
Telecom lawyer Harold Feld, senior VP at advocacy group Public Knowledge, noted a key distinction. If the deal restructures corporate ownership in a way that gives foreign investors what the FCC classifies as an “attributable interest” in the licenses, it would require formal FCC approval. That threshold has not yet been crossed based on publicly available information.
The Ellisons and the Financing Picture
Paramount Skydance CEO David Ellison is leading the deal. His father, Larry Ellison, has pledged $40 billion toward it, and the family appears to have secured backing from President Trump. Together with private-equity firm RedBird Capital Partners, the Ellisons have committed $47 billion of the roughly $81 billion Paramount will pay to buy out WBD shareholders. The remainder will be debt-financed, though the company has not disclosed how much of that debt originates with foreign investors.
The merger still faces review by individual U.S. states and regulators in other countries, meaning the regulatory picture is not entirely settled even as the FCC’s top official signals few obstacles on his end.
Photo by Mikael Seegen on Unsplash
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