Key facts
- Democratic senators are urging the FCC to halt the Paramount-Warner Bros. Discovery merger.
- Concerns cited include national security risks due to significant foreign investment.
- The Justice Department approved the $111 billion deal after an eight-month investigation.
- Reports suggest DOJ career lawyers favored challenging the deal on antitrust grounds.
- Senators question if the approval was a political favor, citing potential corruption.
- The deal requires an FCC waiver due to large equity stakes from Saudi Arabian, UAE, and Qatari sovereign wealth funds.
Democratic senators are urging the Federal Communications Commission (FCC) to pause the proposed merger between Paramount and Warner Bros. Discovery, citing national security concerns stemming from significant foreign investment. The senators argue that the FCC should not accept assurances that the deal poses no national security risks, especially given that foreign government-backed entities would hold a substantial stake.
The US Department of Justice (DOJ) approved the $111 billion acquisition, with a press release stating a rigorous investigation found no harm to competition or consumers. However, The Wall Street Journal reported that DOJ career lawyers were leaning toward recommending a lawsuit to challenge the deal on antitrust grounds, but senior DOJ leaders closed the investigation before staff could formally object.
Senator Elizabeth Warren (D-Mass.) commented that the approval "reeks of corruption" and questioned if it was a political favor. Staff investigators reportedly had concerns about the combined company's ability to meet its commitment of 30 theatrical releases annually due to its increased debt load. Senior DOJ leaders, however, believed Paramount's debt was not a sufficient reason to challenge the merger.
According to reports, a meeting with Paramount CEO David Ellison, son of Trump ally Larry Ellison, helped persuade DOJ leaders to approve the deal. Ellison reportedly told Trump administration officials that he would make changes at CNN, a news source President Trump has frequently criticized.
The DOJ's antitrust division, previously led by Trump nominee Gail Slater who advocated for tougher enforcement, has seen its current leadership deny allegations of politicized enforcement. Acting Assistant Attorney General Omeed Assefi called such claims "ludicrous."
The DOJ's announcement stated the merger is expected to increase competition in the streaming video market. Despite federal approval, US states reportedly plan to file their own lawsuits to block the merger, and European Union regulators are also scrutinizing the deal's financing and competitive impacts.