WBD slips as Senate Democrats urge FCC probe into foreign funding of Paramount deal
Regulatory scrutiny over $24B in sovereign wealth fund backing clouds the $110B acquisition, shares at 11% discount to deal price
Warner Bros. Discovery (WBD) slipped 0.8% to $27.42 on Monday as Senate Democrats called on the Federal Communications Commission to conduct a "rigorous" review of foreign funding behind Paramount Skydance’s proposed acquisition. The move adds fresh regulatory uncertainty to a transaction already burdened by debt, antitrust scrutiny, and governance questions.
The $31 per share all-cash offer from Paramount Skydance, which values WBD at $81 billion in equity and $110 billion in enterprise value, now faces heightened pressure from lawmakers concerned about foreign involvement in US media assets. Approximately $24 billion of the deal’s funding is backed by sovereign wealth funds from Saudi Arabia, Qatar and Abu Dhabi, according to deal documents. The foreign investors are not slated to receive governance rights to sidestep Committee on Foreign Investment in the United States (CFIUS) review, but senators warn the scale of their equity could still influence editorial decisions and business strategy.
A group of Senate Democrats, including Minority Leader Chuck Schumer, Dick Durbin, Cory Booker and Elizabeth Warren, urged FCC Chairman Brendan Carr to examine the "constellation of foreign investment from China and from Gulf states," according to a letter cited by Benzinga. They also pointed to reported renewed investment discussions involving Tencent, raising further concerns about potential Chinese influence.
Paramount Skydance, which completed its own merger with Paramount Global in August 2025 to form the acquisition vehicle, has defended the structure and said the deal remains on track for a third-quarter 2026 closing. The companies have not yet commented publicly on the Senate Democrats’ request.
The widening gap between WBD’s current trading price and the $31 offer reflects growing deal risk. Analyst consensus targets are lower at $29.60, and the analyst outlook is mixed: recent ratings include a hold-biased distribution with one buy, sixteen holds, two sells and one strong sell, according to data compiled by Morningstar. S&P Global Ratings has placed Paramount Skydance’s corporate credit ratings on negative CreditWatch, citing the additional debt load from the acquisition. The combined entity is projected to carry roughly $80 billion in debt, and Paramount Skydance has said it plans to reduce leverage over time.
Beyond the FCC request, regulators continue to scrutinize the transaction on multiple fronts. The Department of Justice has issued a formal second request in its antitrust review, and CFIUS has been asked by lawmakers to evaluate whether the deal constitutes a covered transaction and whether any non-public information access or indirect governance control has been granted to foreign investors. International regulators in the European Union and the United Kingdom are also reviewing the proposal.
The governance and editorial independence of major news assets, notably CNN and CBS News, have drawn sharp criticism from Democrats. Senator Elizabeth Warren has called the deal an "antitrust disaster," while lawmakers have demanded preservation of records related to the pursuit of WBD, including communications with Donald Trump, hinting at potential investigations into political influence.
Paramount Skydance, controlled by the Ellison family and backed by RedBird Capital Partners, maintains that the merger will create a next-generation global media and entertainment company. The company has pledged $6 billion in cost cuts, and some analysts say more may be needed, raising concerns about potential job losses and cultural integration challenges. A WBD shareholder vote on the transaction is expected in early spring 2026.
With the stock trading below the deal price and regulatory pressure mounting, investors are reassessing the probability of the merger closing on schedule. The outcome of the requested FCC probe, along with CFIUS and DOJ reviews, will determine whether Paramount Skydance can overcome a gauntlet of political and economic hurdles to complete its $110 billion takeover of Warner Bros. Discovery.