Paramount Skydance’s $108.4 billion hostile bid for Warner Bros Discovery has drawn backing from three Gulf sovereign wealth funds, creating an alliance among Saudi Arabia, Abu Dhabi and Qatar as the oil-rich states push deeper into the global entertainment industry.
The Public Investment Fund (PIF) of Saudi Arabia, Abu Dhabi’s L’imad Holding Company and the Qatar Investment Authority have committed a combined $24 billion to the offer, Paramount said on Monday.
The bid is also backed by Affinity Partners, the investment firm run by US President Donald Trump’s son-in-law Jared Kushner that has capital from funds in Qatar and the United Arab Emirates.
The collaboration marks an uncommon joint move by Gulf funds that have previously invested in the same companies but seldom together on a single takeover.
Analysts say the scale of the deal has driven the need for several investors, even as the funds have opted out of seeking governance rights to avoid review by the United States Committee on Foreign Investment (CFIUS).
Paramount clarified in a regulatory filing that the sovereign funds would have no board seats or voting rights to limit regulatory scrutiny.
Neil Quilliam of Azure Strategy told Reuters that “a joint three-way alliance is very unusual, but it allows the three countries to step outside their regional media empires and brings them straight into the media big league.”
He added that the collaboration aligns with Gulf states' “joint aspirations to become global influencers and to shape new media narratives.”
Political economist Robert Mogielnicki told Reuters that the acquisition is “a strategic and high-priority investment space for Gulf sovereign and other investors” and noted that it would give access to iconic content and new audiences.
The Gulf’s entertainment ambitions have grown rapidly.
Saudi Arabia’s PIF recently took a majority stake in the media giant MBC, whose Shahid streaming platform is widely known as the Netflix of the Middle East.
In September, a PIF-led investor group agreed to buy videogame developer Electronic Arts in a $55 billion deal described as the largest leveraged buyout in history.
The kingdom allowed cinemas to reopen in 2018 after a 35-year ban, beginning with a partnership with AMC Entertainment.
Hollywood-backed theme parks are expanding too, with Walt Disney announcing its first Middle East project in May, joining Warner Bros World on Abu Dhabi’s Yas Island.
The region has also courted major productions, with scenes from Universal Pictures’ Furious 7 filmed in Abu Dhabi’s Emirates Palace and the Liwa Desert.
Saudi Arabia, the UAE and Qatar have further deepened ties with the United States this year, announcing large investment commitments.
Saudi Arabia has pledged $1 trillion following Crown Prince Mohammed bin Salman’s recent visit to Washington. Abu Dhabi committed $1.4 trillion, while Qatar has planned $500 billion of investments over the next decade.
While the Gulf funds stepped in, Chinese tech giant Tencent Holdings has withdrawn its earlier $1 billion commitment to the Paramount bid.
A revised filing with the US Securities and Exchange Commission showed Tencent’s exit, which Paramount acknowledged by noting that its presence as a “non US equity financing source” could have triggered CFIUS review.
Tencent is among several Chinese firms the US defense department lists as having links to China’s military, a claim the company denies.
The bidding war for Warner Bros Discovery has intensified over recent days. Netflix emerged as the frontrunner last Friday with a $72 billion equity offer for the studios and streaming assets, including HBO and HBO Max.
Paramount countered with its hostile bid on Monday, presenting a $30 per share cash proposal it says offers $18 billion more in cash than Netflix and a clearer path to regulatory approval.
Paramount’s bid covers all of Warner Bros Discovery’s cable networks in addition to its studio and streaming assets, unlike Netflix’s more limited offer.
Warner Bros Discovery’s board acknowledged receipt of Paramount’s offer and said it would review it, but advised shareholders to “take no action at this time” and did not change its recommendation in favour of Netflix.
Paramount argued that its offer carries “higher headline value, increased certainty in that value, greater regulatory certainty, and a pro-Hollywood, pro-consumer and pro-competition future.”
CEO David Ellison said the proposed merger “will create a stronger Hollywood.” He noted that his company remained committed to supporting theaters and jobs, while Netflix co-CEO Ted Sarandos countered that Paramount’s projected “six billion dollars of synergies” would come from job cuts, which he said Netflix does not plan to pursue.
“We are not cutting jobs. We are making jobs,” Sarandos said.
Paramount disclosed that the Ellison family and RedBird Capital are backstopping $40.7 billion of equity financing.
The company also alleged in a letter to Warner Bros that the sale process was unfair and biased toward Netflix, citing comments from Warner management calling the Netflix offer a “slam dunk.”
The political stakes surrounding the deal are mounting. Democratic Senator Elizabeth Warren said the Paramount Skydance Warner Bros merger would be “a five alarm antitrust fire and exactly what our anti-monopoly laws are written to prevent.”
She raised concerns about “a who’s who of Trump buddies” backing the bid and cited risks of “influence peddling, political favouritism, and national security risks.”
Paramount’s offer has also drawn criticism from lawmakers who fear further consolidation in the entertainment industry. If Warner Bros switches sides and accepts the Paramount bid, it will owe Netflix a $2.8 billion breakup fee. Netflix would owe $5.8 billion if its deal fails.
President Donald Trump has questioned the Netflix offer, saying “there is no question about it” that the merger “could be a problem” due to market share concerns.
He said on Sunday and Monday that he had not spoken to Kushner about the bidding and insisted he wants “to do what is right.”
At the Kennedy Center Honors, he called Netflix “a great company” and praised co-CEO Ted Sarandos, but added that regulators would have to review the percentage of market control.
“They have a very big market share and when they have Warner Bros, that share goes up a lot so, I do not know,” he said. “It could be a problem.”
Industry analysts say the takeover battle will likely drag on.
Ross Benes of eMarketer told Reuters that “the Warner Bros Discovery acquisition is far from over” and warned the fight could become prolonged.
Paramount said Warner Bros “never engaged meaningfully” with any of its six proposals submitted over twelve weeks, while critics argue that the company is leaning toward Netflix. Paramount CEO Ellison told CNBC there was an “inherent bias” in the process.
With both sides digging in, the future of one of Hollywood’s most storied studios remains locked in a high stakes corporate battle that now spans global investors, Washington politics and competing visions for the future of entertainment.