The Federal Communications Commission on Thursday approved the foreign-capital structure supporting Paramount Skydance’s roughly $110 billion acquisition of Warner Bros. Discovery, while imposing conditions designed to keep foreign investors from controlling votes, programming decisions or sensitive customer data. The FCC order removes a major communications-law hurdle for one of the largest media transactions ever proposed.

The ruling does not complete the merger. A federal judge has temporarily blocked the companies from closing while a lawsuit brought by 12 states proceeds toward a March trial. That leaves Paramount with a split result: federal regulators have now largely cleared the transaction, but state antitrust claims still threaten its timetable and economics.

The FCC separates investment from control

Federal communications law generally requires FCC review when foreign ownership of a company holding broadcast licenses would exceed a 25% benchmark. Paramount asked the agency to authorize foreign investors to hold a much larger economic interest in the post-merger company. The Media Bureau granted that request with conditions after reviewing the ownership structure and national-security concerns.

Under the approval described by Reuters, the relevant foreign investors may hold nonvoting equity but cannot influence management, news or entertainment content, or other editorial decisions. They also may not gain access to nonpublic data about U.S. customers. Paramount told the agency that its review by the federal interagency group commonly known as Team Telecom had been completed.

The FCC’s action is therefore narrower than approving every aspect of the merger. It addresses whether the resulting company may hold broadcast licenses with the proposed foreign financing in place. The Ellison family and RedBird Capital would retain all voting shares, according to the structure presented to regulators.

Foreign capital helps finance a historic acquisition

The transaction values Warner Bros. Discovery’s equity at about $81 billion and reaches nearly $111 billion when debt is included, according to an AP report. It would place the Warner Bros. film and television studio, HBO Max and CNN alongside Paramount Pictures, CBS and Paramount+.

The financing drew scrutiny because sovereign wealth funds and other investors from the Middle East would own a substantial economic stake. The FCC authorization allows a broad ceiling for foreign equity, but Paramount has said the sovereign funds are expected to hold 38.5% after closing. That distinction matters: the order permits a structure that can accommodate more foreign capital than the company currently expects to use.

Lawmakers who questioned the arrangement argued that economic ownership can create pressure even without formal voting rights. The FCC concluded that enforceable restrictions on voting, governance, content and data access were sufficient to prevent control by the foreign investors. Those safeguards will become part of the regulatory framework the combined company must observe.

Paramount says scale is essential

Paramount has framed the merger as a response to an entertainment market increasingly shaped by global streaming platforms and large technology companies. Combining the studios, libraries, cable networks and streaming services would give the new company more content and a larger subscriber base over which to spread production and technology costs.

The company has also emphasized the financial cost of delay. In a September update, Paramount said the transaction was ready to close and argued that prolonged litigation would impose avoidable costs. The Justice Department separately allowed its federal antitrust review to conclude in June, as reported at the time, and European regulators later granted conditional clearance.

Those approvals strengthen Paramount’s claim that the combination can satisfy competition rules. They do not bind the states or the federal court hearing their case, however, and they do not resolve the practical challenge of integrating two companies with overlapping film, television, cable and streaming operations.

The state lawsuit remains the central obstacle

California and 11 other states contend that the merger would reduce competition in theatrical film distribution, blockbuster production and basic cable programming. Their complaint argues that the combined company could control nearly one-third of theatrical distribution and basic cable programming, potentially giving it greater leverage over theaters, creators, advertisers and consumers.

Paramount disputes that analysis and says the relevant competitive market includes powerful streaming rivals. The company argues that greater scale would help it invest in programming and compete more effectively with Netflix and other global platforms. The states counter that concentration among traditional studios and cable programmers can still cause harm even when viewers have streaming alternatives.

The judge’s preliminary injunction preserves the existing companies while those claims are tested. A March trial creates months of uncertainty, and the final result could depend on how the court defines the markets at issue: narrowly around theatrical releases and cable programming, or more broadly across modern video entertainment.

Approval reduces risk without ending it

For investors, the FCC decision removes a discrete regulatory risk and clarifies the limits that will apply to foreign backers. It also shows how media deals can rely heavily on overseas capital while reserving formal control for U.S. owners. Compliance will depend not only on voting arrangements but also on keeping foreign investors away from editorial judgment and protected data.

The next decisive event is no longer another routine agency review. It is the state antitrust case and the March trial. Until that dispute is resolved, the FCC’s order makes the proposed ownership structure legally workable but leaves the merger itself unfinished.