The UK government is considering intervention in Paramount Skydance Corporation's proposed $110 billion (£83.11 billion) acquisition of Warner Bros. Discovery over concerns the deal would place some of the country's largest television, streaming and news brands under common ownership.
Culture Secretary Lisa Nandy said on Tuesday she was 'minded' to issue a Public Interest Intervention Notice, which would allow Ofcom and the Competition and Markets Authority to investigate the merger's impact on media plurality and competition before ministers decide whether further regulatory action is needed.
If completed, the merger would bring services including HBO Max, Paramount+, CNN International, CBS News, Channel 5, TNT Sports, Cartoon Network and Nickelodeon under common ownership. Paramount and Warner Bros. Discovery have until 6 July to respond before Nandy decides whether to begin a formal intervention.
Government Considers Intervention
In a letter published on Tuesday, Nandy said she was considering intervention because existing media merger rules were drafted before streaming services became a dominant way people watch television. She said the government was prepared to introduce secondary legislation allowing Ofcom to assess the public interest impact of mergers involving streaming platforms such as HBO Max and Paramount+.
The Department for Culture, Media and Sport said around 85% of UK adults now use an on-demand streaming service each month, compared with 67% who watch live television, saying current legislation no longer reflects how people watch television and other media.
Officials also identified children's television as a particular area of concern. Paramount and Warner Bros. Discovery operate two of the UK's largest commercial children's television portfolios after the BBC. Ministers said combining those services could reduce competition in an already limited market.
Concerns Over Media Ownership
Government analysis found the merged company would become the UK's third-largest linear broadcaster by audience share, with a combined 12.1% share of viewing, behind only the BBC and ITV but ahead of Sky and Channel 4.
Ministers also raised concerns about news plurality because the merger would bring CNN International, CBS News and Channel 5 News under common ownership. Officials said such consolidation could reduce the diversity of independent news voices available to UK audiences, although Paramount has said it has no current plans to make substantive changes to Warner Bros. Discovery's UK services.
The government also said bringing the CNN and CBS news archives under common ownership could affect future access to archive footage used by independent documentary-makers and news producers, although no changes to archive access have been proposed.
Companies Given Until 6 July
Nandy has asked Paramount and Warner Bros. Discovery to submit written representations by 6 July before deciding whether to issue a formal Public Interest Intervention Notice. If she proceeds, Ofcom and the Competition and Markets Authority would have up to 40 working days to report on the merger before ministers decide whether further action is required.
Voting control of the combined company would remain with the Ellison family and RedBird Capital despite financing from several international investors.
Paramount has said it remains confident the transaction does not pose media plurality concerns in the UK and expects the deal to complete within its original third-quarter timetable. Ministers are expected to decide after receiving the companies' submissions whether to begin a formal public interest investigation.
