The U.K.’s decision to clear Paramount Skydance’s $111 billion proposed acquisition of Warner Bros. Discovery has been broadly welcomed by European industry players.
U.K. exhibitors, media executives and analysts have argued the deal reflects a wider shift in regulatory thinking as European broadcasters face mounting competitive pressure from global streaming giants.
Following the European Commission’s clearance of the deal last month, the U.K.’s Competition and Markets Authority (CMA) on Thursday concluded the merger would not substantially impact competition within theatrical film distribution, linear children’s TV channels and the supply of subscription VOD services in Britain.
The support Ellison is receiving across Europe follows an extensive lobbying campaign he undertook in January to build backing for the transaction. The Skydance chief met political leaders, policymakers and senior industry players, including the French President Emmanuel Macron and the U.K. Culture Secretary Lisa Nandy, to stress how committed to the theatrical experience he was, as well as to persuade them that traditional media companies had to come together to compete with global streamers.
That outreach appears to have considerably helped Ellison win over influential figures, several of whom have since publicly embraced his argument. That was the case in Brussels, where Macron pushed for the deal to be cleared by the European Commission, according to a senior industry source.
Vue founder and CEO Tim Richards described the CMA’s greenlight as an important milestone after six years of disruption and uncertainty for the film business, spanning the pandemic and the Hollywood strikes.
“We welcome today’s decision from the U.K.’s Competition and Markets Authority to approve Paramount Skydance’s proposed acquisition of Warner Bros. Discovery,” Richards said. “It has been an incredibly challenging six years for our industry, from the pandemic through to the Hollywood strikes, and this decision is an important step toward providing the final level of certainty for the sector.”
Richards argued that bringing the two studios together would strengthen theatrical exhibition and support greater investment in feature filmmaking under Skydance founder David Ellison.
“We believe the industry will be stronger with Paramount and Warner Bros. Discovery coming together, rather than competing separately,” Richards said. “The industry now needs final certainty so it can focus on what matters most: making and releasing great films.”
He added that Ellison was “a highly respected filmmaker” who had consistently demonstrated a long-term commitment to feature films and theatrical exhibition, and urged remaining regulators not to delay the transaction further.
The CMA’s approval also marks a notable departure from the tougher stance regulators adopted several years ago, when the British watchdog blocked Microsoft’s proposed acquisition of Activision Blizzard before later approving a restructured version of the deal, and took a hard line on Meta’s acquisition of Giphy, forcing the social media giant to unwind the transaction.
Speaking to Variety, Sir Peter Bazalgette, the former ITV chair and longtime government adviser on the creative industries, said consolidation had become both inevitable and increasingly supported by policymakers.
“The trend is toward consolidation,” Bazalgette said. “Regulators were stopping these mergers four or five years ago because they were looking in the rearview mirror and not on the road ahead. They’re now looking at it very differently.”
Bazalgette pointed to the U.K.’s recently published industrial strategy for the creative industries, arguing that consolidation had effectively become part of government policy.
“We actually wrote into it, with government approval, that consolidation is something that needs to happen,” he said. “It’s a matter of necessity that you need to have mergers or merge services.”
He also dismissed concerns that the combined Paramount-WBD business would wield excessive market power in Britain.
“When it comes to competition, Paramount’s not very big, and OK, they’re going to own Warner Bros. Discovery now, but if you look at British media and the role of Netflix, Disney, Apple and the BBC, you could hardly argue that the whole Skydance conglomerate is in a dominant position in the U.K. market,” he said. “They just don’t have a dominant position. Just look at market share. It’s tiny.”
In order to receive the U.K. approval, Paramount Skydance had to address concerns surrounding Channel 5, the U.K. public service broadcaster owned by Paramount, and agreed to maintain its public service broadcasting license through 2034, preserve the editorial independence of Channel 5 News, keep its news operations separate from CNN and CBS News, as well as continue commissioning U.K.-originated programming, and invest £80 million ($108 million) in the broadcaster over the next three years.
Yet, Bazalgette suggested that while the BBC, Channel 4 and Channel 5 could remain independent, they may ultimately combine services such as streaming platforms or advertising sales. Under that scenario, he added, Channel 5 would become “a ticket to play” for Skydance.
Mark Oliver, a U.K. media analyst, similarly argued that the merger raises few meaningful competition concerns in Britain because neither Paramount nor Channel 5 commands a significant share of the market.
“The main issue is around the shared advertising market, and whether there needs to be a reshuffling of that ownership,” Oliver said. “I don’t think it’s around Warner Bros. and Paramount having too much power in the U.K. market.”
He noted that Channel 5 accounts for roughly 5% of television viewing, or around 6% including its portfolio channels.
“There’s no TV market issues in the U.K. on the Paramount-Warner Bros. merger,” Oliver said. “You obviously still have Disney and Universal through Comcast, while Netflix, Amazon MGM and Netflix’s own productions have fundamentally changed the commissioning landscape. One studio is not going to push it over the edge.”
Oliver said any remaining regulatory questions are more likely to concern the companies’ studio businesses and theatrical distribution than the British television market.
The CMA’s approval comes as British exhibitors are enjoying the highest number of weekly admissions since ‘Barbenheimer,‘ bolstered by “The Odyssey” and “Spider-Man: Brand New Day.”
Naman Ramachandran and Leo Barraclough contributed to this report.
