The US Justice Department has given the green light to the merger of Paramount and Warner Bros., 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 (£82million) takeover, which will see Paramount Skydance, backed by the tech billionaire Larry Ellison and his son David, take control of all Warner Bros. titles and channels, including Harry Potter, Game Of Thrones, HBO, CNN, the DC Universe and The Lord Of The Rings.
Now, the Justice Department’s Antitrust Division has formally approved the deal, in a move that had been widely anticipated as Donald Trump is close with Larry Ellison.
“The Division has completed its analysis of the proposed merger of Paramount and Warner Bros. and determined based on the evidence received in its investigation that the transaction is not likely to result in harm to competition or American consumers,” a statement read on Friday (June 12).
They ruled that the merger will not negatively impact competition with regard to streaming, linear television, studio production and theatrical distribution.
Hundreds of major figures in the entertainment industry have disputed this claim, with a slew of Hollywood A-listers signing an open letter earlier this year citing the danger to jobs and the likelihood that it will result in higher costs for consumers and a drop in the number of projects in development.
Over 4,000 people have signed the letter, including more than 75 Oscar winners and nominees. Robert De Niro, Ben Stiller, Mark Ruffalo, Florence Pugh, Pedro Pascal, Edward Norton, Joaquin Phoenix, Kristen Stewart, Bryan Cranston, David Fincher, Denis Villeneuve, Jane Fonda and Lin-Manuel Miranda have all signed the letter.
Paramount Skydance responded to the US government’s ruling, saying: “We are grateful for the Department of Justice’s thorough review of this transaction, as well as the work of the other agencies that have completed their reviews and provided clearance to date. This deal is pro-competitive, resulting in a stronger company better positioned to compete against dominant technology platforms in an industry increasingly defined by intense competition for audiences, talent, technology and investment. We remain focused on completing the transaction as soon as possible and delivering its benefits to consumers, creators and the entertainment industry as a whole.”
Remaining roadblocks to the deal being closed include US state attorney generals bringing litigation charges against the merger on antitrust grounds, while British and European market regulators have yet to give their ruling.