British Government Likely to Intervene in Paramount’s Proposed $110 Billion Takeover of Warner Bros. Discovery

The British government has signalled that it is likely to intervene in Paramount Skydance’s proposed $110 billion takeover of Warner Bros. Discover, citing concerns about maintaining media plurality.

Lisa Nandy, the U.K.’s Secretary of State for Culture, Media and Sport, said in a written statement to Parliament on ‌Tuesday, “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.”

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She said she would do so, first, because of “the need for, to the extent that it is reasonable and practicable, a sufficient plurality of views in news media in each market for news media” in the U.K.

Second, it was to satisfy “the need, in relation to every different audience [in the U.K.], for there to be a sufficient plurality of persons with control of the media enterprises, or the enterprises providing on-demand program services or both, serving that audience.”

The move was prompted by concerns about the impact the deal might have on U.K. television audiences, given that broadcaster Channel 5, channels like Cartoon ‌Network, ⁠Nickelodeon and CNN International, as well as streaming platforms Paramount+, TNT Sports and HBO Max would all be brought under the same ownership by the merger.

Nandy is looking to broaden public interest ​rules to ​better reflect ⁠the popularity of streaming and 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. “If I decide to intervene in this merger on the basis, I will bring forward secondary legislation to finalize this public interest consideration as the Enterprise Act requires me to do.”

Nandy concluded her statement by saying that she had invited “further representations in writing from the parties” and had given them until July 6 to respond.

If she then decides to intervene, “the next stage would be for [media regulator] Ofcom to assess and report to me on the public interest considerations, and for the Competition and Markets Authority to assess and report to me on whether a relevant merger situation has been created, and any impact this may have on competition.”

She aded, “Following these reports, I would need to decide whether to refer the matter for a more detailed investigation by the CMA under section 45 of [the Enterprise Act].”

The deal has already been cleared by the U.S. Justice Department, as well as by regulators in China, Australia, Germany, ​France and Saudi Arabia, and it is thought likely the European Union will give it the greenlight if certain “remedies” are made, such as the ending of the Paramount-Universal distribution joint-venture known as UIP.

A Paramount Skydance spokesperson said in a statement sent to Variety, “We are grateful for the continued constructive engagement with all interested government bodies and relevant authorities, including in the U.K. We are confident that our proposed transaction does not pose any media plurality issues in the U.K. and remain confident in our stated transaction timeline.”