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With Paramount’s $111 billion takeover of Warner Bros. Discovery likely to soon get the go-ahead from the European Union, the next question will be whether the U.K.’s competition regulator, the Competition and Markets
Authority (CMA), will follow suit.
The prospects are that the U.K. won’t block the deal, but may throw in an extra hurdle, according to Max von Thun, director of Europe at the Brussels-based Open Markets Institute.
The CMA has two options, according to Von Thun. Either they follow suit with the EU, or “they decide to be tougher,” he said. This would involve a longer investigation and imposing some additional “remedies” beyond those being reportedly requested by Brussels.
According to the Financial Times and other outlets, the European Commission’s anti-trust watchdog is currently hammering out final details of its approval of the mega-merger and discussing the condition that Paramount would have to exit its United International Pictures joint venture with Universal. UIP is currently active as a distributor in several European territories, including Denmark, Greece, Hungary, Norway, Poland and Sweden.
“I think Paramount will be perfectly happy to dump that, if it means they get their merger approved in the whole of Europe,” Von Thun said.
But in the U.K., the CMA could also require further remedies such as “some binding commitments on things around film releases,” he noted, adding: “I could potentially see that happening, because the creative industries and the film industry in the U.K. are so strong.” Ultimately, however, he does not expect the CMA to block the deal because “the transatlantic relationship is still quite an important thing for the U.K.,” he said, after pointing out that Donald Trump has “given this deal his blessing.”
Paramount CEO David Ellison has pledged to release a combined 30 films a year from Paramount and Warner Bros. in the U.S., with a minimum 45-day window.
The megadeal, inked in February after a protracted battle with Netflix, would bring bring together Paramount assets including CBS, CBS News, Paramount Pictures and Paramount+ with WBD’s HBO and HBO Max, Warner Bros. Pictures, CNN, TNT, TBS, HGTV and more.
In the U.K, in addition to merging the two major film studios, the deal will bring streamers Paramount+ and recently launched HBO Max under the same ownership, as well as U.K. broadcaster 5 and TNT Sports.
The deadline for the CMA to announce its decision over whether it will approve the deal or refer the merger for a more in-depth probe is Aug. 7, but this could be extended.
Von Thun pointed out that “the U.K. is obviously a much smaller market and political player than the EU.” However, the fact that Saudi Arabia’s Public Investment Fund (PIF), Abu Dhabi’s L’imad Holding Company and the Qatar Investment Authority (QIA) are jointly putting up a total of $24 billion investment into the Hollywood megadeal does not seem to be an issue in Europe. At least not in terms of any concerns about indirect influence that their countries could exert on news and entertainment content.
“CNN are not as big a player in Europe [as they are in the U.S.], so in relation to CNN and Gulf states interfering in their programming, I don’t think that’s a problem,” he said. As for whether they could try to promote production of more conservative films or works geopolitically favorable to the Gulf States, “that really hasn’t been part of the debate at all,” Von Thun noted. The only discussions in Europe have been whether the deal may have received unfair funding from Gulf investors under the EU’s Foreign Subsidies Regulation, but even that “doesn’t seem like something anyone’s worried about,” he noted.
The European Commission has until July 7 to either approve the deal or open an in-depth probe.
A spokesperson for Paramount on Wednesday said the company does not comment “on any of ongoing regulatory proceedings.” There was no comment from the EU Commission.
