UK competition watchdog gives PSKY/WBD merger the all-clear

The UK’s Competition and Markets Authority (CMA) has cleared Paramount Skydance (PSKY)’s merger with Warner Bros Discovery (WBD) after an antitrust probe.

Lisa Nandy

The CMA has concluded that the US$110bn acquisition “does not give rise to a realistic prospect” of substantially reducing competition.

The competition watchdog investigated the deal through the lens of competition in theatrical film distribution, children’s linear TV channels and the broader supply of SVoD services in the UK.

It said that while the merged company would represent the largest theatrical distributor, it will continue to face competition from the other US majors, Disney, Universal and Sony.

For kids’ channels, the CMA concluded that consumers would continue to have plenty of programming alternatives across both linear and streaming. It also noted that the demand and importance of linear channels for children are “declining,” reducing concerns around competition.

On the SVoD front, the CMA said other services, including Netflix, Apple TV, Disney+, Prime Video, BBC iPlayer and ITVX, will continue to provide “sufficient competition” to the merged entity. If the PSKY/WBD deal comes to fruition, the plan is to combine their respective streaming services, Paramount+ and HBO Max, into a single service.

The clearance from the CMA comes around five weeks after the UK’s secretary of state for culture, media and sport, Lisa Nandy, said the government was “minded to intervene” in the merger on public interest grounds.

At the time, the UK government’s apparent interest in the deal threatened to throw another spanner in the works for the controversial mega-merger.

There appeared to be some momentum behind the probe, with British actors Benedict Cumberbatch, Alan Cumming and Benedict Wong last week publishing an open letter in The Guardian warning of the potentially “disastrous” consequences for the UK screen sector.

However, the UK government has ultimately decided the tie-up does not meet the threshold for a Phase 2 investigation.

In a statement issued alongside the CMA’s approval notice, Nandy said she had decided not to intervene on the basis of “assurances and legally binding commitments” she had secured from Paramount.

Two weeks ago, the European Commission rubber-stamped the deal after PSKY agreed to several concessions, including agreeing to end a European joint venture with Universal Pictures within 13 months of closing the deal.

While the European parts of the approval have now been obtained, the merger faces a far stiffer test in the US, where a coalition of 12 states is suing to block the deal on antitrust grounds. Earlier this week, a federal judge set March 2027 for the trial to begin, with Ellison subsequently claiming he “fully expects” the deal to close.