EU clears Paramount-Warner merger with remedies
Live Events Ongoing challenge from US states Other regulatory clearances as a Reliable and Trusted News Source Addas a Reliable and Trusted News Source Add
Live Events Ongoing challenge from US states Other regulatory clearances as a Reliable and Trusted News Source Addas a Reliable and Trusted News Source Add Now! (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel New York: The European Union approved Paramount's $81 billion takeover of Warner Bros. Discovery this week, effectively clearing another regulatory hurdle for a mega merger that could vastly reshape the entertainment and media landscape worldwide.But the greenlight comes with certain conditions.The European Commission - which serves as the EU's antitrust enforcer - said that even with a Paramount-Warner combo, enough competitors would exist across markets like film production and streaming in its 27-nation bloc. Still, when it comes to distributing movies to theaters, the Commission warned of high concentration that could lead to "worse rental and distribution terms for cinema operators, ultimately disadvantaging consumers."To address this, the Commission said Skydance-owned Paramount agreed to end its European Economic Area stake in United International Pictures - a longstanding venture with another major studio, Universal, that Paramount has used to distribute films in theaters outside North America. The company must end that partnership within 13 months of closing its Warner acquisition, the Commission said, and not enter any new agreements with Universal for the next 10 years.Among other terms, current distribution of Warner films must be shifted to the same pipeline Paramount is using in these European countries.
The European Commission said its approval was conditional on the company's commitments and that it would monitor their implementation, without expanding further on how that would be enforced.Paramount welcomed the EU's greenlight, which it said represented "a major milestone" toward completing its acquisition. In a Wednesday statement, the company added that such clearances reflect how a Paramount-Warner combo "will enhance consumer choice" and create a business with a scale "capable of competing with the tech companies that have come to dominate the industry."Universal did not respond Wednesday to a request for comment about Paramount's new film distribution commitments in Europe.A Paramount-Warner combo would mean putting HBO Max, fan favorite titles like "Harry Potter" and even CNN under the same roof with CBS, "Top Gun" and the Paramount+ streaming service. Beyond movies and streaming, both American companies also own a handful of European-based TV assets - including Warner's TVN Group in Poland, as well as localized channels for flagship Paramount brands like MTV and Nickelodeon.The EU's blessing marks the latest in a chain of regulatory clearances inching the merger closer to becoming a reality, but the deal faces other challenges. In the U.S., a federal judge on Monday ordered the companies to pause their transaction for at least two weeks.That spans from a lawsuit brought forth by California and 11 other states seeking to block Paramount and Warner's merger altogether - on the grounds such a tie-up would "extinguish competition" in Hollywood and lead to fewer choices for consumers, particularly moviegoers and cable customers in the U.S.Paramount has called the states' claims meritless.
The BriefWire