The UK government has said it is likely to intervene in Paramount Skydance’s proposed takeover of Warner Bros. Discovery.
The $110billion (£83billion) deal would see Paramount Skydance acquire Warner Bros. Discovery, bringing together major film, TV, news and streaming assets including Warner Bros., HBO and HBO Max, CNN, TNT Sports, Cartoon Network, Nickelodeon, Channel 5, Paramount+, the DC Universe, Harry Potter, Game Of Thrones and The Lord Of The Rings.
However, Culture Secretary Lisa Nandy has written to the current and proposed owners of Warner Bros. Discovery to say she is “minded to intervene” in the deal on public interest grounds.
That does not mean the merger has been blocked in the UK. If Nandy decides to intervene, she could issue a Public Interest Intervention Notice, which would trigger further scrutiny from Ofcom and the Competition and Markets Authority (CMA).
Ofcom would be asked to examine the deal’s impact on media plurality in the UK, while the CMA would look at whether the merger could create competition concerns.
“Following engagement with the parties and independent research, my department has today written to the current and proposed owners of Warner Bros Discovery on my behalf to inform them that I am minded to intervene,” Nandy said in a written statement.
She added: “I am conscious that the proposed acquisition is global in nature. In reaching this decision, my focus has been, and will remain, on the UK public interest and the range of services available to UK audiences, including Channel 5, TNT Sports, Cartoon Network, Nickelodeon, and CNN International, as well as Paramount+ and HBO Max.”
Paramount and Warner Bros. Discovery have until July 6 to respond before Nandy makes a final decision on whether to intervene.
Paramount has said it remains confident the deal will clear UK scrutiny. “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 spokesperson said. “We are grateful for the continued constructive engagement with all interested government bodies and relevant authorities, including in the UK.”
The development comes after the US Justice Department gave the green light to the merger, despite a huge industry backlash.
Negotiations over the future of Warner Bros. Studios have been taking place in recent months, with Netflix at one point being perceived as the frontrunner. However, in February, the streaming company backed out of the bidding, leaving the way clear for Paramount Skydance to acquire the major studio.
In April, Warner Bros. Discovery shareholders approved the $111billion (£82billion) takeover, with Paramount Skydance backed by the tech billionaire Larry Ellison and his son David. The decision had been widely anticipated, with Donald Trump known to be close with the Ellison family, praising Larry in May, calling him a “tremendous man”.
The proposed merger has also been met with criticism from across Hollywood, however, with more than 1,000 industry professionals signing an open letter opposing the deal.
Mark Ruffalo is one who strongly criticised the merger, writing: “We must fight this. It will mean less films, less TV, less creativity, less of everything from the people who make the decisions.”
“This merger is bad for everyone except the billionaire class,” he added. “Please fight this.”