UK watchdog to look at Paramount’s $110bn takeover of Warner Bros Discovery

The UK competition watchdog has opened an investigation into Paramount Skydance’s $110bn (£82bn) takeover of Warner Bros Discovery (WBD).The deal will create a media powerhouse controlling assets including the Paramount and HBO Max streaming services, Channel 5 and TNT Sports, which broadcasts Champions League, Premier League and the Olympics, the Hollywood studios behind franchises including Superman, Batman and Top Gun, as well as HBO, home to shows including Game of Thrones, The White Lotus and Succession.The Competition and Markets Authority (CMA) said it has opened an investigation to ascertain whether the tie-up will result in a “substantial lessening of competition” in the UK.The CMA said it will decide by 7 August whether the deal warrants a more in-depth phase 2 investigation, which can take up to five months.In February, Paramount beat Netflix to take over WBD, bringing an end to a high-stakes bidding war between the media companies.Netflix refused to increase its bid, saying that at the price offered for WBD it was “no longer financially attractive” to continue the bidding war.Paramount, which paid a $2.8bn fee to Netflix for breaking the streamer’s $82.7bn deal for WBD’s streaming and studio assets, is facing regulatory scrutiny and a backlash from critics worried about the impact on Hollywood.In April, more than 1,000 film and TV industry professionals, including Mark Ruffalo, Kristen Stewart, Ben Stiller and Joaquin Phoenix, signed an open letter protesting against the deal.“The integrity, independence and diversity of our industry would be grievously compromised,” the letter said. “Competition is essential for a healthy economy and a healthy democracy. So is thoughtful regulation and enforcement.”The US senator Elizabeth Warren has described the deal as “an antitrust disaster threatening higher prices and fewer choices for American families”.In April, David Ellison, chief executive of Paramount, told a movie theatre owners convention that he promised to continue to make a minimum of 30 films a year across the Paramount and Warner Bros film studios.The move by Ellison, whose deal for WBD is backed by a $40bn personal guarantee by his father, the Oracle co-founder Larry, is an attempt to allay industry fears that he would cut output in the same way Disney did, despite promising not to after taking over Rupert Murdoch’s 21st Century Fox in 2019.However, job cuts appear inevitable, with $3bn in cost savings already announced after the merger of Skydance and Paramount last year, and a further $6bn in post-WBD takeover synergies revealed in filings.