Key facts
- The UK's Competition and Markets Authority (CMA) has cleared the £111bn Paramount-Warner Bros Discovery merger.
- The CMA concluded that the combined business will face sufficient competition in the UK.
- The merger's impact on cinemas, streaming, children's television, and creative workers was examined.
- The combined entity is expected to become the UK's largest theatrical film distributor with a 20-30% market share.
- Universal, Disney, Sony, and smaller studios provide significant competition in film distribution.
- The CMA rejected concerns that the merger would weaken the bargaining power of creative workers.
The UK's Competition and Markets Authority (CMA) has cleared the proposed £111bn merger between Paramount and Warner Bros Discovery, determining that the combined entity will not gain excessive market power in the UK.
The watchdog's full decision, published on Monday, addressed concerns regarding the deal's potential impact on cinemas, streaming services, children's television, and creative workers. The CMA concluded that the merged company would still face substantial competition across these sectors.
While the combined business is projected to become the UK's largest theatrical film distributor with an estimated 20-30% market share, the CMA noted that Universal and Disney hold similar shares, with Sony and other smaller studios also providing significant competition. The regulator found that Paramount and Warner Bros Discovery are not closer competitors to each other than they are to these other major studios.
Concerns raised by cinemas included the possibility of fewer film releases and the enlarged company demanding better revenue-sharing terms or shorter theatrical windows. Respondents also warned that increased buying power could negatively affect actors and other creative workers' wages and opportunities. However, the CMA dismissed these concerns, citing competition from other major studios, smaller producers, and streaming companies.
Regarding streaming, the CMA stated that the combined entity, which would bring Paramount+, HBO Max, and Discovery+ under one owner, would still contend with major players like Netflix, Amazon Prime Video, Disney+, and Apple, as well as free services. Similarly, the combined children's TV business was deemed to remain competitive due to the presence of free-to-air television and streaming services.
This UK approval comes as Paramount seeks to finalize the takeover, having reportedly secured regulatory approval in 68 countries. The primary remaining obstacle is a lawsuit filed by California and 11 other US states.