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Paramount wants FCC to approve increased foreign ownership in Warner Bros. Discovery deal

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Paramount wants FCC to approve increased foreign ownership in Warner Bros. Discovery deal

Paramount Skydance has asked the Federal Communications Commission for permission to exceed foreign ownership rules for U.S. media companies to pave the way for its takeover of Warner Bros. Discovery.

David Ellison’s media company is expecting to receive $24 billion from three Middle Eastern royal families, who would become part owners of the combined Paramount-Warner Bros. Discovery. Paramount on Monday asked the FCC for authorization to include the royal families and other foreign investors to help finance the company’s proposed $81-billion transaction.

U.S. law restricts foreign investors from owning more than 25% of a company that holds an FCC broadcast license — unless the commission determines that such an ownership structure would “serve the public interest.”

The FCC disclosed that Paramount had asked for such a “public interest” ruling to allow the merged entity to exceed the 25% foreign ownership cap.

The FCC, which did not indicate whether it will go along with Paramount’s request, initiated a review.

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Paramount, in a statement, described the move as a “customary petition,” one that was required because of “the recent equity syndication.”

The Larry Ellison family will retain control of the company through its voting interests, the company said.

“When the transaction and equity syndication close, the Ellison family and RedBird [Capital Partners] will collectively hold the largest equity stake in the combined company and continue to be the sole owners of Class A Common Stock, representing 100% of the voting shares,” Paramount said.

The Ellisons must come up with $47.2 billion in equity and more than $60 billion in debt financing to pull off the deal, which is valued at $111 billion, including Warner Bros. Discovery’s existing debt.

The $24 billion expected from the sovereign wealth funds — representing the royal families of Saudi Arabia, Abu Dhabi and Qatar — would together represent about 49% of the equity in the new company. As part of the investor group, Saudi Arabia’s Public Investment Fund has agreed to contribute $10 billion, according to regulatory filings.

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The FCC is involved because of Paramount’s ownership of CBS and 28 television station licenses granted by the FCC. That gives FCC Chairman Brendan Carr influence over the ownership structure of the combined company.

Paramount, as it is currently constituted, has foreign investors — although not enough to approach the ownership cap. Some of those investors are expected to roll over to the larger Paramount-Warner Bros. when that merger is complete.

Several Democrats in Congress, including Sens. Cory Booker (D-N.J.) and Elizabeth Warren (D-Mass.), have expressed alarm about the prospect of allowing foreign entities to hold such an enormous stake in a major U.S. media company, particularly one with two prominent news outlets: CBS News and CNN. The two senators previously cited national national security concerns.

Paramount has long maintained the foreign ownership issue was largely resolved because the Middle Eastern families would not have voting representatives on the company’s board.

However, the FCC on Monday noted that, under its rules to calculate foreign ownership levels, the agency considers “a voting interest equal to [an entity’s] equity interest for purposes of seeking specific approval.”

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The FCC has allowed other media companies to have significant foreign investment. Years ago, the FCC agreed to allow Mexico City-based Grupo Televisa to own much of Univision, the U.S.-based Spanish-language company. More recently, struggling radio giant iHeartMedia Inc. gained FCC approval for foreign owners to buy up to 100% of the company’s stock.

To get the Warner Bros. Discovery deal over the finish line, billionaire Larry Ellison agreed to guarantee the entire $47.2 billion in equity needed. Warner Bros. Discovery board members had demanded that Ellison — one of the world’s richest men — backstop the deal’s financial structure due to initial concerns about it.

Despite the commitment, the Ellisons want the flexibility to include the Middle Eastern royal families and additional foreign investors.

Paramount wants “greater access to capital, including from foreign sources,” the FCC said in its notice.

The proposed Paramount-Warner Bros. would carry $79 billion in debt, making it one of the largest leveraged buyouts ever.

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The Justice Department is separately reviewing whether the merger violates U.S. antitrust laws. State attorneys general, including California Atty. Gen. Rob Bonta, also are scrutinizing the transaction.

More than 4,000 filmmakers, actors and industry workers, including Ben Stiller, Jane Fonda, J.J. Abrams and Damon Lindelof, have signed an open letter calling for regulators to block the deal, saying it “would reduce the number of major U.S. film studios to just four.”

The Ellison family, which holds close ties to President Trump, has expressed confidence that the deal will be approved. Paramount also must garner the consent of regulators in markets where it conducts business, including Europe.

Paramount has said it expects to gather all of the regulatory approvals by this summer.

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Read Nick Bilton’s Letter to Scott Pelley

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Read Nick Bilton’s Letter to Scott Pelley

Dear Mr. Pelley:

I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.

Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.

Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.

Sincerely,

Nick Bilton

Executive Producer, 60 Minutes

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Aspiration co-founder sentenced to 14 years for fraud

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Aspiration co-founder sentenced to 14 years for fraud

The co-founder of Aspiration, Joseph Sanberg, was sentenced to 14 years in prison on Monday after defrauding investors and lenders of over $248 million.

The startup, an eco-friendly digital banking company boasting fossil fuel-free investments, carbon offsets for gas purchases, and a debit card with cash-back benefits for shopping at clean companies, was founded by Sanberg and Andrei Cherny. Cherny left the company in 2022 and has not been charged.

Sanberg, an Orange County native, pleaded guilty to wire fraud in October after being arrested in March last year. Aspiration subsequently filed for bankruptcy and liquidated all of its assets by July.

Sanberg and venture capitalist Ibrahim AlHusseini, who also faces charges, together forged a series of bank statements in order to obtain loans. From 2020 to 2021, the pair forged AlHusseini’s bank statements to show millions of dollars in assets in order to obtain millions of dollars from lenders.

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Additionally, they forged a letter from their audit committee stating that $250 million in funds were available, when in reality Aspiration had less than $1 million. The amount of loans defrauded exceeded $248 million.

In 2021, Sanberg artificially inflated Aspiration’s 2021 revenue by $44 million by recruiting 27 fake customers to sign letters of intent pledging tens of thousands of dollars per month for tree planting services. Sanberg himself funded the contracts and used the inflated revenue numbers to obtain more loans.

The charges sparked an NBA investigation into salary cap allegations due to Aspiration’s connections with Clippers owner Steve Ballmer.

Ballmer personally invested $60 million in Aspiration, all of which was lost. He is now the target of a civil lawsuit alleging his participation in the scheme. Ballmer denies the allegations.

The team announced a $300-million sponsorship deal with Aspiration, and Clippers player Kawhi Leonard signed a four-year, $28-million marketing contract with the company, which reportedly performed no duties. The issue has raised concerns about how players are circumventing the NBA’s salary cap.

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The team lost the $300-million sponsorship deal and an additional $20 million paid for carbon offset purchases.

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Monterey Park takes landmark vote on banning data centers

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Monterey Park takes landmark vote on banning data centers

Residents in the city of Monterey Park will be the first in the nation to vote on a permanent ban on data centers Tuesday.

If approved, Measure NDC would prohibit data centers within the city limits and could only be overturned by another vote.

Yard signs saying “No Data Center” in English and Chinese with images of dragons line sidewalks in the San Gabriel Valley city.

As a wave of data center opposition sweeps the country, numerous towns and counties across the U.S. have instituted temporary moratoria and other restrictions on the facilities. But only a handful have instituted indefinite bans, and just four other towns have sent related matters to the ballot.

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Supporters are hoping the vote will set a precedent for the rest of the region, where residents are fighting proposals in Vernon and City of Industry.

“This is about as permanent a ban as we can get,” said Steven Kung, co-founder of the group No Data Center Monterey Park. “Winning Measure NDC would send a huge message to the rest of the San Gabriel Valley about how residents don’t want data centers.”

The ballot measure emerged from the fight against a 247,000-square-foot center proposed in 2024 by the Australian-owned investment firm HMC StratCap for a residential area in Monterey Park.

The facility would have sat less than 500 feet away from the nearest home and used three times the electricity of the 60,000-person, predominantly Asian American city.

While the developer touted the potential for jobs and tax revenue, residents expressed concerns about noise and air pollution, rising electricity rates and a potential to lower property values.

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The company pulled its plans in late March following public outcry and a March 4 city council vote to extend a temporary data center moratorium and place a ban on Tuesday’s ballot.

In a letter to the city council, HMC StratCap said it would pursue a different use for the land and would not engage in a ballot measure fight.

The city council later banned data centers indefinitely, the first in California to do so, said Mayor Elizabeth Yang. But she’s still been out campaigning for the measure with all four other council members.

“If a council puts in an ordinance, a future council can reverse it too,” said Yang. “With the ballot measure, unbanning it is a lot harder because you need the entire city to vote on it.”

The measure proposes the ban “to protect air quality, drinking water resources, and public health” and “prevent impacts to electricity and water rates.”

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While California places third in the country for existing data centers with about 300 facilities, it hasn’t been a hot spot in the recent AI-driven data center boom. High electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in Virginia, Texas, Georgia, Illinois or Arizona.

“Most of California’s data centers are small by today’s standards,” said Shaolei Ren, an engineering professor at UC Riverside who studies how to reduce the environmental impacts of data centers. “Ten years ago, they would be medium-sized, but the power demand for new AI data centers has increased a lot.”

The average operating data center demands 45 megawatts, according to the Washington Post, while the average planned one would draw 430 MW. The one proposed for Monterey Park would have required about 50 MW at peak demand.

As proposals crop up in SoCal, they’re met with fierce opposition. Montebello, El Monte and Baldwin Park have all enacted temporary moratoria, and Alhambra recently banned data centers as part of a zoning code update. City of Industry, Vernon, City of Commerce and Santa Fe Springs are moving in the other direction, trying to court developers and streamline data center approvals. Community groups are fighting that.

Outside the San Gabriel Valley, residents of Coachella and Imperial County are showing up in droves to protest local proposals.

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Matthew Shaw, a volunteer with the Coalition for Responsible Data Center Development, who recently published a report on opposition to AI data centers, said a vote to ban them in Monterey Park “would lead to copycats, partially because so many groups are just opposed to any data center development at all.”

While there is no formal opposition to Measure NDC, some building trades like Ironworker Local 433 supported the Monterey Park data center when it was still live before city council. Those in the data center industry are lamenting the state of public opinion.

“These are multi-billion-dollar assets that are built by multi-trillion-dollar companies. These things will get done,” said Mehdi Paryavi, chairman of the International Data Center Authority. “My biggest problem is that our industry does not invest enough in community engagement.”

Paryavi said towns that seek to limit data centers are missing out on thousands of jobs generated by data center construction, operations and customers, as well as faster artificial intelligence speeds and better performance.

Kung said local community organizers are “looking at the empirical evidence” and seeing a ban as a win.

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“We’ve never seen a city that embraces a data center and is like, ‘Look how our quality of life has increased, look how all the revenue has gone into citywide improvements,’” he said. “That just doesn’t exist.”

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