The Federal Communications Commission on Thursday cleared the way for Middle Eastern sovereign wealth funds to help bankroll Paramount Skydance's roughly $110 billion takeover of Warner Bros. Discovery, waiving the agency's standard 25% cap on foreign ownership of U.S. broadcast licensees. The decision removes one of the last major regulatory hurdles standing between the merger and the closing table, according to Reuters.

Under the terms of the petition, Saudi Arabia's Public Investment Fund will take an equity stake of roughly 15.1%, Abu Dhabi's L'imad Holding Company about 12.8%, and the Qatar Investment Authority around 10.6% — combined stakes that, together with other foreign backers, can now total up to 49.5% of the merged company's equity. No single foreign investor may hold more than 20%. Crucially, the commission ruled that every dollar of that money buys zero voting power: foreign shareholders will hold no voting stock and, per the FCC's order, "will not have any influence, direction, or control over or provide any commentary or guidance on Paramount's content decisions, company management," or access to nonpublic data on U.S. operations. Larry Ellison's family and RedBird Capital Partners retain the entirety of the voting shares.

A split commission

The vote wasn't unanimous in spirit. Democratic Commissioner Anna Gomez dissented sharply, warning that the scale of the investment amounts to more than a passive check.

"An investment this large in one of America's biggest media companies doesn't just buy equity, it secures influence over what gets said and what gets made," Gomez said, according to a report on the ruling.

The commission's majority order countered that the no-vote, no-control structure was designed precisely to wall off editorial and operational decisions from the funds' balance sheets.

The merger itself — first agreed in February, when Paramount offered $30 to $31 a share in cash to acquire Warner Bros. Discovery outright — has already cleared antitrust review at the Justice Department, which found no competitive threat to film, broadcast or streaming markets. Warner Bros. Discovery shareholders formally approved the transaction at a special meeting earlier this year, and the FCC's Media Bureau said it found the arrangement served the public interest after reviewing the record of the proceeding, according to TheWrap.

What remains is a courtroom fight. A federal judge has temporarily blocked the deal's closing pending a trial, expected in the spring, over an antitrust lawsuit filed by California's attorney general and a coalition of roughly a dozen other Democratic-led states. That case, not any further Washington sign-off, is now the biggest obstacle left between Paramount Skydance and full control of HBO, CNN, Discovery and the rest of Warner Bros. Discovery's portfolio.

For Wall Street, Thursday's approval is read as a green light on financing risk even if the legal fight drags on: the Gulf capital that helps fund the roughly $81 billion cash payout to WBD shareholders is now cleared to flow, regardless of how the states' case resolves. Executives on both sides have signaled they still expect a closing this cycle, with the state trial as the last real wildcard.