UK Culture Secretary Considers Probing Paramount's $110bn Warner Bros Discovery Acquisition

The UK culture secretary, Lisa Nandy, intends to ask Britain’s media and competition watchdogs to examine Paramount’s $110bn (£85bn) acquisition of Warner Bros Discovery.

The WBD takeover deal will create a media powerhouse controlling assets ranging from: the Hollywood studios behind franchises including Superman, Batman and Top Gun; the UK’s Channel 5; the news channel CNN; TNT Sports, which broadcasts Champions League, Premier League and the Olympics; and the Paramount+ and HBO Max streaming services.

Nandy said on Tuesday that she was “minded” to task the communications regulator Ofcom with looking at the impact of the mega-merger on media plurality, and request the Competition and Markets Authority (CMA) to investigate whether the proposed deal creates competition issues.

“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,” said Nandy, in a written ministerial statement.

“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.”

Nandy said that investigating public interest issues regarding streaming was not covered in the Enterprise Act 2002, but that she may legislate to allow Ofcom to investigate the merger’s impact on on-demand services.

“As the legislation was drafted at a time where viewing was largely via broadcast linear channels, it does not cover the effect of a merger on streaming or video-on-demand services,” she said. “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.”

Nandy said that if she decided to intervene she would bring forward secondary legislation to include streaming and on-demand services in the Enterprise Act.

The culture secretary has given Paramount and WBD until 6 July to respond. “It is important to note that I have not taken a final decision on intervention at this stage,” she said.

If Nandy decides to intervene she will then issue a public interest intervention notice, which starts an investigation process of up to 40 days.

Paramount said it expected the deal to clear UK scrutiny without a lengthy delay. “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.”

Paramount is run by David Ellison, whose father is the Oracle co-founder and Donald Trump ally Larry Ellison, who has backed his son’s takeover with a $40bn personal guarantee.

Three Middle East sovereign wealth funds have provided about $24bn as part of the deal. Saudi Arabia’s Public Investment fund will own about 15%; L’Imad, an investment vehicle backed by Abu Dhabi, will hold just under 13%; and the Qatar Investment Authority will own about 10.6%.

However, the sovereign wealth investors do not have voting shares, with the Ellison family and their US partner RedBird Capital holding all of the voting control.

Last week, it was reported that EU regulators were likely to approve Paramount’s takeover, provided the company accepted certain remedies, being worked out between the companies and the European Commission.