UK weighs intervention in $110bn Paramount-Warner deal
The UK culture secretary is preparing to send regulators after a massive transatlantic media merger, exposing a legal gap in how London polices streaming consolidation.
Lisa Nandy has signalled she is prepared to intervene in Paramount’s $110bn takeover of Warner Bros Discovery, warning that the deal warrants scrutiny from both media and competition regulators. The culture secretary said she has written to the companies to inform them she is “minded to intervene”.
A combination of the two businesses would forge a global media giant controlling a vast portfolio of assets directly relevant to European audiences. The merged entity would hold the Hollywood studios behind franchises like Superman and Batman, UK broadcaster Channel 5, CNN International, and TNT Sports, which airs the Champions League, Premier League and the Olympics. It would also combine the Paramount+ and HBO Max streaming platforms.
Nandy’s move highlights a significant gap in British competition law. She noted that the Enterprise Act 2002 was drafted for an era of linear broadcast television and does not currently cover the impact of mergers on streaming or video-on-demand services. “I believe this ought to be able to be considered in relation to this and all future media mergers given the role on-demand viewing now plays in the market,” she said.
The government has given the companies until 6 July to respond before a final intervention notice is issued, which would kick off a 40-day investigation. Paramount, however, remains unperturbed. “We are confident that our proposed transaction does not pose any media plurality issues in the UK and remain confident in our stated transaction timeline,” a company spokesperson said.
Capital and control
The proposed takeover relies heavily on backing from Larry Ellison, the Oracle co-founder and Donald Trump ally, who has provided a $40bn personal guarantee to support his son David Ellison’s leadership of Paramount. Approximately $24bn in funding comes from three Middle Eastern sovereign wealth funds: Saudi Arabia’s Public Investment Fund, Abu Dhabi-backed L’Imad, and the Qatar Investment Authority.
Despite holding a combined stake of nearly 39 percent, the Saudi, Emirati and Qatari investors will not receive voting shares. All voting control will remain with the Ellison family and their US partner, RedBird Capital.
A continental contrast
The UK’s cautious approach contrasts sharply with the regulatory trajectory across the Channel. European Commission regulators are expected to approve the deal by 7 July, provided the companies accept certain remedies. The merger already cleared US antitrust scrutiny earlier this month.
