(Bloomberg) — CBS owner Paramount Global’s merger with film and TV producer Skydance Media should be reviewed by federal authorities because of the participation of China’s Tencent Holdings Ltd., which was recently added to a US military blacklist, a key member of Congress said.
Most Read from Bloomberg
John Moolenaar, chairman of the House China Select Committee, said Wednesday in a statement that the merger should be reviewed by the Treasury Department’s Committee on Foreign Investment in the US.
“We’ve heard from multiple Hollywood executives about rampant self-censorship designed to curry favor with the Chinese Communist Party,” the Michigan Republican said. “Given that just this month, the Department of Defense designated Tencent as a Chinese military company, CFIUS should closely scrutinize the proposed merger to ensure the Chinese Communist Party is not further solidifying its hold on the American entertainment industry.”
Senator Mark Warner, a Virginia Democrat and vice chairman of the Senate’s Select Committee on Intelligence, echoed Moolenaar in a separate statement to Bloomberg News, suggesting bipartisan support for further inquiry.
“The potential for a PRC national champion like Tencent to hold a significant financial stake in a major US content conglomerate raises serious concerns and should absolutely prompt CFIUS scrutiny,” he said, referring to the People’s Republic of China by its initials.
Tencent, a technology and entertainment company, is an investor in Skydance. It will have a less-than 5% stake in the merged Paramount-Skydance and will be a passive, nonvoting investor, according to a person with knowledge of the deal who asked not to be identified.
The merger is subject to approval by the Federal Communications Commission, which must OK the transfer of Paramount’s broadcast licenses. The company owns the CBS network, several television stations and well-known cable channels like MTV.
Speaking to reporters on Wednesday, FCC member Brendan Carr didn’t rule out a national security review.
“We’re going to look at all the issues that have been raised,” said Carr, who has been nominated to be FCC chairman by President-elect Donald Trump. “At this point, sort of nothing is off the table.”
Skydance declined to comment. Neither Paramount nor Tencent immediately responded to emails seeking comment.
