Congress Targets Tencent Stake in Skydance: Paramount Global’s merger with Skydance Media, which includes a financial stake from China’s Tencent Holdings, is facing increasing scrutiny from U.S. lawmakers. Congressman John Moolenaar, who chairs the House China Select Committee, has urged federal authorities to review the deal, particularly after Tencent was added to a U.S. military blacklist earlier this month. Moolenaar emphasized concerns over self-censorship in Hollywood driven by Chinese influence, suggesting that the U.S. Treasury’s Committee on Foreign Investment in the U.S. (CFIUS) should examine the merger for national security risks.
Senator Mark Warner also expressed support for further inquiry, highlighting concerns over Tencent’s potential to hold significant financial power in a major U.S. media company. Tencent, which holds less than a 5% stake in the merger and is described as a passive, nonvoting investor, is seen by critics as a “national champion” of China, raising alarms over possible influence in the American entertainment industry.
The merger also requires approval from the Federal Communications Commission (FCC), which oversees the transfer of Paramount’s broadcast licenses. While FCC Commissioner Brendan Carr has not ruled out a national security review, he mentioned that all concerns raised will be evaluated. Additionally, public comment filings have expressed concerns over Tencent’s blacklisted status, urging the FCC to consult with CFIUS or other agencies such as the Justice Department’s Team Telecom.
Investor Mario Gabelli has also filed a complaint with a Delaware court, requesting further transparency on the merger terms. Despite the concerns, analysts predict that the deal will eventually receive approval, as Paramount’s broadcast licenses do not meet the FCC’s thresholds for more extensive review.
Key Points:
- Lawmakers, including Moolenaar and Warner, are pushing for a review of the Tencent-Paramount-Skydance merger due to national security concerns.
- Tencent’s blacklisting by the U.S. Department of Defense has raised alarm over its influence on the U.S. entertainment industry.
- The merger is under scrutiny by both the FCC and CFIUS, with some public watchdogs urging further investigation.
- Despite concerns, analysts predict the merger will likely proceed with FCC approval.