Paramount’s $110 billion acquisition of Warner Bros. Discovery (WBD) faces more than a month of regulatory uncertainty in Britain, as Parliament shuts down for the summer.
The House of Commons went into recess without British Culture Secretary Lisa Nandy providing an update on whether she would formally intervene in Hollywood’s massive merger, which will bring together the content empire that includes Superman, SpongeBob SquarePantsand game of thrones.
Nandy surprised Paramount, Warner and other industry figures last month when the Labor minister revealed she was “willing to intervene” in the merger on the grounds of media pluralism.
Paramount and Warner had been waiting to hear whether Nandy would issue a so-called “public interest intervention notice”, triggering investigations by media regulator Ofcom and the Competition and Markets Authority (CMA), the UK’s antitrust watchdog.
Deadline understands that government updates on the merger will first be provided to Parliament as it is a quasi-judicial process. This means Paramount and Warner could remain in limbo until at least September 1, when Parliament returns from its summer recess.
Further complicating the process is Nandy’s desire to explore introducing secondary legislation that would enable Ofcom to examine how the Paramount-WBD deal would affect streaming services. Public interest issues relating to live broadcasting are not currently covered under the Corporations Act 2002.
Nandy is said to recognize the need to reach a timely decision, but her failure to release an update before the summer break could be a source of frustration for Paramount and WBD.
When Sky received an offer from 21st Century Fox in 2017 (a deal that never materialized), the government went from being “in the mindset” to intervene to launching a formal intervention within 10 days. وقد استغرقت ناندي الآن 17 يومًا كجزء من عملية مماثلة.
The government-ordered investigation will almost certainly now creep past Paramount’s September 30 closure deadline. This is important because the David Ellison-run company has a “timed fee” commitment to WBD shareholders of 25 cents per share — about $650 million — for each quarter its acquisition does not expire after the third quarter.
It is possible that Paramount’s alliance with Warner Bros. will be closed without UK permission because Britain’s merger control regime is not suspended. Paramount has always aimed to respect the UK process, but that will be tested by Nandy’s delay.
Meanwhile, the merger investigations announced by the Capital Markets Authority into the acquisition are still ongoing. The CMA intends to issue an update on August 7, meaning the antitrust watchdog could theoretically approve the deal before Nandy reaches a decision.
ووصف مصدر مطلع الوضع بأنه “يشوبه نوع من الفوضى”. It is not clear what delayed Nandy’s decision, but a change in prime minister is unlikely to have helped.
Keir Starmer will be replaced next week by Andy Burnham, who may have his own ideas about WarnerMount and could replace Nandy as Culture Secretary. Burnham is familiar with the media brief, having served as Culture Secretary in Gordon Brown’s government.
As Deadline reported, Nandy’s announcement of her “willingness to get involved” confused lawmakers and industry insiders, given the lack of significant opposition to the Paramount deal. John Whittingdale, Britain’s former culture secretary, told Deadline he was “surprised,” while another lawmaker described the intervention as “somewhat baffling.”
Outside of the UK, the European Commission, the EU’s antitrust body, is considering approving the takeover after Paramount agreed to make concessions, according to Deadline’s source and multiple reports. ومن المقرر أن تصدر المفوضية الأوروبية قرارها بحلول الأربعاء المقبل 22 يوليو.
In the United States, dozens of attorneys general, including California’s Rob Bonta, are trying to block the deal after they allege it stifles competition through the distribution of large-scale theatrical films, big-budget blockbusters, and basic cable TV licensing.
