Gulf States May End Up Owning Hollywood by Accident

The Loophole at the Center of a Media Landmark

There is a federal law that caps foreign ownership of American television and media assets at 25%. It exists for obvious reasons. And yet Paramount Global has filed a request with the Federal Communications Commission asking the agency to simply set that law aside.

The proposed post-merger entity combining Paramount and Warner Brothers Discovery would be 49.5% foreign-owned. Of that, 38.5% would come specifically from the Gulf, with Saudi Arabia's Public Investment Fund as the largest stakeholder, followed by Qatar and the UAE. Paramount is asking the FCC to pre-approve any individual foreign interest holding up to a 20% stake.

That number, 49.5%, is not accidental. It sits just below the 50% threshold that would trigger a mandatory review by CFIUS, the Committee on Foreign Investment in the United States. The deal, as Neeta argues in this episode, has been very cleverly constructed to avoid that scrutiny. The question she raises, and that almost no one else seems to be asking, is whether the FCC's pre-clearance of an additional 20% stake for Gulf investors would push that number to 60% and thereby trigger CFIUS review anyway.

It is the kind of regulatory gap that tends to close after something goes wrong rather than before.

A Jenga Tower of Debt

The foreign ownership angle would be provocative on its own. But what makes this merger genuinely alarming is the financial architecture supporting it.

The deal involves $79 billion in new debt for Paramount Global. That alone is an extraordinary number. The Ellison family, which controls Paramount through Oracle, was supposed to provide the credible financial anchor here. In 2025, Oracle was riding the AI infrastructure wave, making sweeping commitments to data centers and cloud capacity. Those commitments now look like a liability.

Oracle is raising $50 billion in new debt to fund data center buildout while simultaneously cutting 18% of its workforce. Its trailing free cash flow is declining. And it carries $553 billion in prior obligations, with $300 billion of that concentrated in a single counterparty: OpenAI. OpenAI, for its part, is pulling back on its Stargate commitments with Oracle, the $500 billion infrastructure project that was supposed to be a cornerstone of Oracle's growth story.

The picture that emerges is of two struggling business models leaning against each other for support. A Hollywood that has not solved its profitability problem colliding with an AI infrastructure play that overextended at peak hype. Neither is in a position to bail out the other.

Hollywood's Underlying Problem

Opponents of the merger, and there are many, tend to focus on the foreign ownership issue or the antitrust angle. Both are legitimate. But the episode makes clear that the deeper problem is the business model of American media itself.

Every major Hollywood merger of the past decade has been accompanied by promises about content volume, investment in production, and commitment to domestic jobs. After Disney acquired Fox, Bob Iger walked back those commitments within a couple of years, reducing the number of films the studio would make. The pattern is reliable enough to be predictable.

Filmmaking locations in Los Angeles County have already slid 13.2%, according to a letter sent by 34 California Democrats to the state Attorney General urging him to block the merger on antitrust grounds. The Attorney General of New York is said to share those concerns. Production has been moving to other states and overseas for years, and the high-paying union and non-union jobs that once defined the California economy around Hollywood have become far less stable.

What Happens Next

The Ellisons have said they will retain voting control and have no plans to offer board seats to foreign investors. That may be true at the moment of closing. Deals have a way of evolving after they are approved, particularly when the finances are as stretched as they are here.

The FCC, based on the current political climate, looks likely to approve the pre-clearance request. The more interesting variables are whether CFIUS finds a reason to weigh in, and whether California or New York attorneys general can mount an effective antitrust challenge in time to matter.

What is clear is that a deal this leveraged, covering assets this significant, is being rushed through regulatory processes that were not designed for this level of complexity or this scale of foreign participation. The checks exist. Whether they will be used is another question entirely.