Paramount is in advanced discussions with Saudi, Qatari and United Arab Emirate sovereign wealth funds about investing in its bid for Warner Bros. Discovery, despite Paramount’s official denials, TheWrap has learned.
The strategy is aimed at strengthening support for the Ellisons’ bid from the Trump administration, which has been courting Saudi interests and other Gulf investments in the United States, as well as blocking Comcast CEO Brian Roberts from cutting his own deal with the Saudis.
Paramount made the unusual move on Tuesday of denying a report that a deal had been struck with the three sovereign wealth funds. But two individuals confirmed to TheWrap that advanced discussions are ongoing with Saudi Arabia’s Public Investment Fund (PIF), the Qatar Investment Authority (QIA) and the Abu Dhabi Investment Authority (ADIA).
A flurry of activity has accompanied a raft of rumors around bids for Warner Bros. Discovery, one of Hollywood’s legendary studios.
Paramount CEO David Ellison and RedBird Capital Partners founder Gerry Cardinale, a major backer in the media company, both traveled to Abu Dhabi, according to a source familiar with the situation. On Tuesday, Ellison attended President Donald Trump’s state dinner for Saudi Crown Prince Mohammed bin Salman.
Meanwhile, Comcast’s Roberts was also in the Arabian Gulf in recent weeks, attending an investor conference and visiting Qiddiya City, a new entertainment hub near Riyadh designed to be a world-class destination with multiple theme parks.
The talks come ahead of WBD’s Thursday deadline for first-round bids, with Paramount, Comcast and Netflix the three main interested suitors. For Paramount, getting the three Arab funds on board is less about financial backing and more about building the most compelling case to get a deal done.
The move could potentially diminish a rival bidder’s chances by preventing Comcast from striking a similar deal. A Comcast source said the cable giant had no plans to fund its bid with Saudi Arabian investment and said Roberts was in the kingdom for the conference.
But the possibility of that deal was clearly enough to motivate Paramount.
Ellison needs to ally with these funds “to keep them from investing with Brian Roberts,” the first knowledgable person said. “If you’re David Ellison, you don’t have a choice.”
An alliance also provides political benefits. As evidenced by the warm welcome that bin Salman received at the White House, including Trump defending the crown prince from a question about his involvement with the murder of journalist Jamal Khashoggi, having Saudi Arabia’s PIF involved in the bid could further speed the regulatory approval process with the Trump administration.
WBD has said it hopes to provide an update on its strategic review by the middle or end of December.
Representatives for PIF, QIA and ADIA did not return TheWrap’s request for comment. A spokesperson for Paramount declined to comment.
Increasing Saudi influence in Hollywood
Middle Eastern countries, and Saudi Arabia in particular, have increasingly poured money into getting a toehold in Hollywood and entertainment in general. Last month saw the launch of Arena SNK Studios, a new billion dollar-funded studio backed by bin Salman.
This came after Saudi Arabia invested in the creation of LIV Golf, took a major stake in Electronic Arts and the Grand Prix Formula 1 event and struck a brand new deal with TKO to promote Zuffa Boxing. And in September, a host of A-list comics like Dave Chappelle and Bill Burr participated in the Riyadh Comedy Festival in exchange for big paychecks — a move that received considerable backlash in the U.S.
It’s also not just entertainment, as bin Salman on Wednesday announced a broader investment in U.S. AI companies, including with AI startup Humain participating in a $900 million funding round for video model company Luma AI.
But participation by the three Arab sovereign wealth funds raises questions about how much influence they would have in U.S. media and mass entertainment. Middle Eastern countries have for the last decade spent lavishly to improve their image and reputation on the world stage.
But Saudi Arabia has been criticized for its oppressive regime with little tolerance for dissenting voices, as evidenced by the murder of Khashoggi, which Trump dismissed Tuesday as “things happen.” Does having PIF as an investor in a bid mean CNN may be discouraged from critical coverage of the country or its ruler?
It’s a question that some in Hollywood are already wrestling with as the prospect of an Arab-backed bid gets closer to reality.
Paramount’s push
The strategic maneuvering to ally with the funds underscores Ellison’s drive to get a deal with WBD done as he works to build a next-generation media giant.
Ellison, who had previously submitted three bids as high as $23.50 a share, has argued the company would be the “best partner” for Warner after CEO David Zaslav signaled his interest to sell the company just three years after merging Warner Bros. and Discovery, adding that other potential acquirers would need to overcome “significant (perhaps insurmountable) hurdles given their dominant market positions.”
In order to sweeten the bid, Ellison previously offered Zaslav a co-CEO and co-chairman title and said the company would increase the portion of its bid paid in cash to shareholders from 60% to 80% and breakup fee from $2 billion to $2.1 billion.
If successful in acquiring WBD, TheWrap previously reported that Ellison would look to merge HBO Max and Paramount+ into a “super platform” under one scenario being considered. The theatrical model is also at the core of his vision and a combined company would look to target an output of 30 films per year as part of its commitment to that model.
Lucas Manfredi contributed to this story.
