Paramount Might Use Middle Eastern Oil Money to Finance Deal for WBD

A deal to combine Paramount and Warner Bros. Discovery would create a media behemoth.

And that behemoth could be partially owned by the governments of Saudi Arabia, Qatar, and Abu Dhabi.

So says Variety, reporting that David and Larry Ellison, who own Paramount and are bidding to buy WBD, are using money from those countries’ sovereign wealth funds to finance their proposed deal.

If that story sounds familiar, there’s a good reason: In November, Variety reported more or less the same thing — which prompted Paramount to call the story “categorically inaccurate”.

But even at the time, it didn’t seem implausible that Middle Eastern oil money would be used to help the Ellisons buy WBD. And other outlets had suggested the Ellisons might partner with the Saudis, among others.

Now Variety is doubling down on its initial report. Bloomberg also reports that “Middle East funds” are involved in the Ellisons’ bid. A Paramount rep declined to comment; I’ve also reached out to the sovereign wealth funds.

But as I noted before, the fact that it’s even possible that Middle Eastern petrostates could have ownership stakes in a giant American media conglomerate — one that would control major movie studios, streaming networks, and news outlets — tells us a lot about 2025. A few years ago, this would have seemed like a non-starter; now it seems quite close to happening.

That’s because Paramount, which is competing with Netflix and Comcast in the WBD bidding, still seems like the most likely WBD owner when all of this is done. That’s partially because Paramount is offering to buy all of WBD, while Comcast and Netflix only want part of it. And partially because the Ellisons — Larry Ellison in particular — are close to Donald Trump, and we live in a world where people close to Donald Trump often get what they want.

In the absence of anyone involved in the deal talking to me on the record, I can imagine some arguments why a petrostate-backed mega-media conglomerate makes sense:

The funds would presumably have minority stakes in a combined Paramount/WBD, and it would presumably remain controlled by Americans.Foreign investors have frequently owned some or all of big, American-based media companies: See, for instance, Japan’s Sony, which owns a major movie studio and music label. And Saudi investor Prince Alwaleed bin Talal was a longtime minority investor in Rupert Murdoch’s Fox empire; now he has a stake in the company formerly known as Twitter.The Saudi sovereign wealth fund is already set to own almost all of video game giant Electronic Arts, and no one seems to have an issue with that.

A Middle East-financed deal for WBD could raise some eyebrows

All true! But I still think that there are differences that will certainly raise eyebrows, and maybe more forceful pushback, if a combined Ellison/Middle East deal goes forward.

One obvious point: It’s one thing to have a private company or investor from another company taking a stake in an American media giant; it’s another to have one that’s directly controlled by a foreign government.

Another one: As media companies continue to consolidate, the power of the remaining ones gets amplified. On their own for instance, CBS News and CNN have dwindling influence and financial power; a company that combines the two, though, might have more meaningful sway. You can argue that the Saudis owning one of the world’s biggest video game companies is also meaningful, but the video game industry never gets the attention it deserves, and that seems likely to continue in this case.

And last: It’s possible that Middle Eastern countries are investing in an American media conglomerate solely for a financial return, and would have zero interest in the content that conglomerate makes and distributes. But that’s an assertion that many folks would have a hard time taking at face value. And while lots of American companies have sought Middle Eastern funding for years, there was a pause after 2018, following the murder and dismemberment of Washington Post contributor Jamal Khashoggi — a shocking act the CIA concluded was ordered by Saudi Arabia’s Crown Prince Mohammed bin Salman himself. (He has denied involvement.)

Now bin Salman might end up owning a piece of major American news outlets and other media arms. How’s that going to go over?