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The UK’s culture secretary, Lisa Nandy, wants to ask the British media and race officials to take a look Paramount’s $110bn (£85bn) acquisition of Warner Bros Discovery.
The WBD takeover deal will create a media powerhouse controlling assets from: the Hollywood studios behind franchises including Superman, Batman and Top Gun; UK Channel 5; news channel CNN; TNT Sports, which broadcasts the Champions League, Premier League and Olympics; and the streaming services of Paramount + and HBO Max.
Nandy said on Tuesday that he “wants” to hand over the responsibility of the media watchdog Ofcom to look at the impact of the large-scale conflict on the number of TV channels, and asked Competition and Markets Authority (CMA) to investigate whether the proposed agreement creates competition.
“Following engagement with the parties and an independent investigation, my department today wrote to the current and prospective owners Warner Bros Discovery on my behalf let them know that I want to intervene,” said Nandy, in his ministerial statement.
“I know that their target audience is global. In achieving this decision, my focus has been, and will remain, the interest of the UK public and the range of services available to the UK public, including Channel 5, TNT Sports, Cartoon Network, Nickelodeon, and CNN International, as well as Paramount+ and HBO Max.”
Nandy said that the investigation of public interest issues in relation to classification was not mentioned in the Enterprise Act 2002, but that they could make laws to allow it. Ofcom to investigate the effect of the merger on the desired performance.
“As the law was created at a time when viewing is mainly through broadcast channels, it does not affect the integration of streaming services or video on demand,” he said. “I believe that this needs to be considered in light of this and in addition to all of the future media that is expected to be seen in the market.”
Nandy said that if he decides to intervene, he will introduce secondary legislation to include advertising and demand services in the Enterprise Act.
The culture secretary has given Paramount and WBD until July 6 to respond. “It is important to note that I have not made a final decision on the course of action at this time,” he said.
If Nandy decides to intervene then he will issue a notice of public interest, which will start the investigation up to 40 days.
Paramount said it hoped the deal would end the UK review without delay. “We are confident that our proposed action will not cause any problems for the UK and we remain confident in the information we have provided,” a spokesman said. “We are grateful for the continued success with all interested parties and authorities, including in the UK.”
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Paramount is run by David Ellison, whose father is the co-founder of Oracle and Donald Trump ally Larry Ellison, who has supported his son’s takeover and $40bn personal guarantee.
Three Middle East financial institutions have committed nearly $24bn as part of the deal. The Public Investment Fund of Saudi Arabia will have about 15%; L’Imad, a commercial vehicle backed by Abu Dhabi, will hold under 13%; and the Qatar Investment Authority will hold approximately 10.6%.
However, the majority shareholders do not have voting shares, the Ellison family and its US partner RedBird Capital have full voting power.
Last week, it was reported that the EU authorities could approve the takeover of Paramount, provided that the company agreed to other measures to deal with the problem, which is being done between the company and the European Commission.
The commission has until July 7 to approve the deal or open a full investigation. The agreement was approved by the US Department of Justice at the beginning of this month.
