The Federal Communications Commission has approved a petition allowing foreign entities to hold 49.5% of the equity in Paramount once its acquisition of Warner Bros. Discovery is complete.
The rule being waived is a long-standing one. Foreign entities can ordinarily own up to 25% of media companies that broadcast on the public airwaves, and Paramount owns 28 such television stations.
The petition asked for considerably more than it received. It sought permission for foreign entities to own up to 100% of the combined Paramount-Warner Bros.
The investors are sovereign wealth funds from Saudi Arabia, Qatar and Abu Dhabi.
The commission's reasoning turned on the kind of stock involved. According to the agency, the foreign investors "will not be able to wield any influence, let alone control, over decisions involving the Licensees". This is because the stock options do not come with official voting rights.
Not everyone at the commission agreed. Anna Gomez, its Democratic member, said the agency had "just let some of the most repressive governments in the world indirectly control nearly all of a combined Paramount-Warner Bros."
The advocacy group Free Press objected in similar terms, saying that "control over for-profit, commercial domestic news media by any government is an extraordinary situation that would surely strike most Americans as unseemly".
The transaction is not finished. It remains subject to antitrust litigation brought by California and eleven other states, with a trial scheduled for March.
Set the argument aside for a moment and look only at the arithmetic, because that is where the genuinely interesting problem sits.
The commission's position is not that this equity confers limited influence. It is that it confers none: no influence, let alone control. If that is correct, then the quantity of it cannot matter, and the commission has spent its deliberation setting a ceiling on a substance it has in the same document declared inert.
Nor is the ceiling a round one. It is 49.5%, a figure that stops half a percentage point short of half. On the commission's own reasoning nothing whatsoever happens at half, which makes that half point the most carefully positioned number in the order.
The 25% rule emerges from all this with the strongest record in American broadcasting regulation. It restricts a form of ownership which, according to the order relaxing it, was never capable of doing anything in the first place. In its entire history it has not once failed to prevent what it prevents.
The remaining 50.5% is presumably where the owning happens. This newspaper has asked which portion of a share carries the influence, and at what point along the certificate it begins, and has not yet had an answer.
The Department of Unnecessary Research observes that a limit placed on a quantity with no effect may be set at any figure whatever, from zero to one hundred, with identical results in every case. It took a federal commission, a formal petition and a published order to choose one.