The British government has indicated it is likely to intervene in Paramount Skydance’s $110 billion takeover of Warner Bros. Discover, citing concerns about maintaining media plurality.
“Following engagement with the parties and our own investigation, my department has today written to the current owners of Warner Bros. Discovery and the candidates on my behalf to inform them of my intention to intervene,” Lisa Nandy, Britain’s secretary of state for culture, media and sport, said in a written statement to parliament on Tuesday.
He said he would do so primarily because of the “need, to the extent reasonably practicable, for news media to have a sufficient number of views in each of its markets” in the UK.
Second, it was to meet “the need for there to be a sufficient number of people in relation to all the different audiences[in the UK]to manage the media companies that serve them, and/or the companies that provide on-demand programming services.”
The move stems from concerns about the impact the deal will have on British TV viewers, given that channels such as broadcaster Channel 5, Cartoon Network, Nickelodeon and CNN International, as well as streaming platforms Paramount+, TNT Sports and HBO Max, will all come under the same ownership in the merger.
Nandy is considering expanding the public interest provisions to better reflect the popularity of streaming and video-on-demand services, she said.
“Given the role that on-demand viewing currently plays in the market, I think this should be considered in the context of this and all future media mergers,” Nandi said. “If I decide to intervene in this merger on this basis, I intend to introduce secondary legislation to finalize this public interest consideration, as required by corporate law.”
Mr. Nandy concluded his statement by asking for “further written representations from both parties” and giving them until July 6 to respond.
If she then decides to intervene, “the next steps would be for[media regulator]Ofcom to assess the public interest considerations and report to me, and for the Competition and Markets Authority to assess and report to me as to whether a relevant merger situation has arisen and the impact this may have on competition.”
She added: “Following these reports, we will need to decide whether to refer the matter for further investigation by the CMA under section 45 (of the Enterprise Act).”
The deal has already been approved by the U.S. Department of Justice, as well as regulators in China, Australia, Germany, France and Saudi Arabia, and it is thought that the European Union is likely to give the go-ahead if certain “remedies” are taken, such as ending Paramount and Universal’s distribution joint venture known as UIP.
In a statement to Variety, a Paramount Skydance spokesperson said: “We appreciate our continued constructive engagement with all relevant government bodies and authorities, including in the UK. We are confident that our proposed transaction will not raise multiple media issues in the UK and remain confident in the transaction timeline we have set.”
