Kushner and Saudis back hostile takeover of Hollywood giant
Deep Dives
Explore related topics with these Wikipedia articles, rewritten for enjoyable reading:
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Committee on Foreign Investment in the United States
13 min read
CFIUS is central to understanding the regulatory stakes of this deal - the article claims Paramount structured the deal to avoid CFIUS jurisdiction, but disputes this. Understanding how CFIUS actually works and its history of blocking foreign acquisitions provides crucial context for evaluating these claims.
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Public Investment Fund
2 min read
Saudi Arabia's sovereign wealth fund is providing a massive portion of the $24 billion equity financing. Understanding its history, scale, controversial investments, and relationship to the Saudi government illuminates the foreign influence concerns raised in the article.
On Monday morning, Paramount announced a $77.9 billion hostile takeover offer of Warner Bros. Discovery (WBD), an American media conglomerate that owns an iconic movie studio, HBO, and other news and entertainment properties. The offer is meant to upend Netflix’s deal to purchase WBD for $72 billion, which WBD accepted last Friday.
Paramount’s press release announcing the offer says that the $40 billion in equity financing will be “backstopped by Ellison Family and RedBird Capital.” The CEO of Paramount is David Ellison, the son of Oracle co-founder Larry Ellison, the second-wealthiest person in the world. RedBird Capital is an investment fund based in New York. (The rest of the cash for the purchase will be raised as debt from American banks.)
What is not mentioned in the press release is that while the equity financing is “backstopped” by American individuals and entities, the majority of the equity financing — $24 billion — comes from the sovereign wealth funds of Saudi Arabia, Abu Dhabi, and Qatar. That fact is buried on page 42 of a separate SEC filing.
$24 billion is a massive investment by foreign governments on Paramount’s behalf. To put it in perspective, the current value of Paramount is just $15 billion.
Also participating in the deal is Affinity Partners, the private equity firm run by President Trump’s son-in-law, Jared Kushner. Nearly all of Affinity Partners’ assets come from the same sovereign wealth funds bankrolling the proposed Paramount takeover of WBD. Kushner collects tens of millions in fees from Saudi Arabia and other Middle Eastern countries annually.
Kushner’s involvement in the deal highlights the ongoing legal and ethical problems with his dual role. On the one hand, Kushner is operating as a high-ranking official representing the Trump administration in the most sensitive foreign policy matters. On the other hand, he is being paid by and partnering with Middle Eastern governments as they seek to expand their political, economic, and cultural interests.
Any acquisition of WBD requires the approval of multiple federal agencies. On Sunday, the day before Paramount’s hostile takeover bid was announced, Trump warned that Netflix’s planned acquisition “could be a problem“ because the combined company would have too much market
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