Two Democratic senators are raising concerns about the federal government’s handling of a massive media industry merger, arguing that officials have not properly examined the national security implications of the proposed deal.
Elizabeth Warren and Richard Blumenthal have criticized the administration of Donald Trump for failing to launch a national security review into a $111 billion agreement in which Paramount Skydance seeks to acquire Warner Bros. Discovery.
The senators say the proposed merger deserves closer scrutiny because it relies heavily on financing from foreign sovereign wealth funds. According to them, allowing billions of dollars from foreign government-backed investors into a major American media company without an in-depth review could create risks for both national security and the media landscape.
Calls for Review by Federal Investment Watchdog
At the center of the dispute is the role of the Committee on Foreign Investment in the United States, commonly known as CFIUS. The interagency committee, which is led by the U.S. Treasury Department, is responsible for reviewing foreign investments in American companies when those transactions might affect national security.
CFIUS has broad authority to investigate deals involving overseas investors. If the committee determines that a transaction could create security concerns, it can recommend mitigation measures or, in some cases, advise the president to block the deal entirely.
Warren and Blumenthal have repeatedly urged officials to bring the Paramount–Warner Bros. transaction under this review process. They argue that the size of the deal and the involvement of foreign sovereign funds make it a clear candidate for examination.
Gulf Sovereign Wealth Funds Involved in Financing
Documents filed with U.S. regulators show that Paramount’s offer for Warner Bros. Discovery is backed in part by billions of dollars from three major Middle Eastern sovereign wealth funds.
Those investors include the Public Investment Fund, the Qatar Investment Authority, and the Abu Dhabi Investment Authority.
A filing submitted to the U.S. Securities and Exchange Commission indicated that the three funds together were expected to contribute about $24 billion toward Paramount’s proposal as of early December. Since that disclosure, the company has not released updated details about the exact level of financial participation from each fund.
The financing helped support Paramount’s bid of $31 per share for Warner Bros. Discovery. The offer eventually prevailed after Netflix chose not to submit a competing proposal. Warner Bros. Discovery’s board accepted Paramount’s offer last month, positioning the deal to move forward.
Senators Question Government Response
Warren and Blumenthal have expressed concern that the administration has not moved to review the transaction despite the scale of foreign funding involved.
The lawmakers initially raised the issue in a letter sent in early December to Treasury Secretary Scott Bessent, who serves as chair of CFIUS. In their letter, they asked the Treasury Department to examine the proposed merger and assess whether the involvement of foreign sovereign wealth funds could create security risks.
Their concerns included the possibility that foreign government-backed investors could indirectly gain influence over a major American media company, which could have implications for both media independence and the handling of user data.
Treasury Department Responds but Leaves Key Question Unanswered
In late February, the senators received a reply from Mason Champion, an acting senior official in the Treasury Department’s Office of Legislative Affairs.
The response outlined the general procedures CFIUS follows when evaluating foreign investment transactions. According to the letter, the committee conducts thorough reviews of deals that fall within its legal jurisdiction, analyzing possible threats, vulnerabilities, and broader national security implications.
However, the response did not clarify whether the Paramount–Warner Bros. deal would actually undergo such a review.
This lack of a clear answer has fueled further criticism from lawmakers who believe the transaction should be examined before it progresses further.
Paramount Argues Review Is Unnecessary
Paramount has maintained that the transaction may not fall under CFIUS authority.
In filings submitted to regulators, the company said the Middle Eastern investors would hold non-voting equity stakes in the combined company. According to Paramount, the funds have also agreed not to seek governance rights such as board representation.
Because the investors would not have direct control over the company’s management or decision-making processes, Paramount argues that the deal does not meet the criteria that typically trigger a national security review.
Debate Over Foreign Investment in Media
The involvement of sovereign wealth funds in a major media acquisition has also sparked broader debate about the role of foreign government investors in the U.S. entertainment industry.
Before stepping away from the bidding process, Ted Sarandos raised questions about the implications of foreign government-backed funding in media companies during an interview with BBC Radio 4’s “Today” program.
Sarandos indicated that government investment in companies that operate television news networks could raise concerns about editorial independence and the potential influence of outside governments.
Possible Impact on Major News Networks
If the merger is completed, the combined company would control an enormous portfolio of media assets.
Paramount currently owns CBS News, while Warner Bros. Discovery owns the cable news network CNN. A successful merger would bring both news organizations under the same corporate umbrella.
David Ellison has said that the company intends to preserve CNN’s editorial independence if the acquisition proceeds.
Other Lawmakers Also Express Concern
Warren and Blumenthal are not alone in raising questions about the deal.
In December, Representatives Sam Liccardo and Ayanna Pressley also warned about potential national security implications.
The lawmakers specifically pointed to the involvement of Saudi Arabia’s sovereign wealth fund, which is overseen by Crown Prince Mohammed bin Salman. They referenced findings by U.S. intelligence agencies that connected the crown prince to the killing of journalist Jamal Khashoggi.
In a letter sent to David Zaslav and the company’s board, the representatives warned that future political leadership in Washington could revisit the merger if concerns about foreign involvement remain unresolved.
