Foreign ownership an issue for CNN deal speculation

There’s a certain logic to the debt-ridden WBD selling CNN, and to Jeff Zucker and his friends — or some other investor — buying it. The problem: Zucker’s money comes largely from the United Arab Emirates. The Saudis and Qataris also quietly make up much of the cash available to big deals like this.

But a foreign-backed bid for CNN could trigger “the mother of all CFIUS reviews,” said Ivan Schlager of Kirkland & Ellis, a leading expert on the foreign influence regulation. He noted that even the sale of Forbes to Indian investors has been held up by political concerns. If the investment is more than 25%, and if the foreign parent aren’t truly passive limited partners (neither the case in Zucker’s Redbird IMI), Schlager predicted that competitors and members of Congress could block the deal on concerns of creating “another Al Jazeera.”