British regulators have cleared Paramount’s proposed acquisition of Warner Bros. Discovery, removing a major regulatory obstacle for the media mega-deal. The approval comes from both the UK’s Competition and Markets Authority (CMA) and the Department for Digital, Culture, Media and Sport (DCMS), with conditions attached to protect British broadcasting interests.
The deal, valued at approximately $110 billion including debt, would create a global media powerhouse combining two of Hollywood’s major studios. Paramount agreed in February to buy Warner Bros. Discovery for $31 per share. The combined entity would control a vast portfolio of assets including CNN, Warner Bros. Pictures, HBO Max, CBS, Paramount+, and the UK’s Channel 5.
While the UK clearance represents a significant step forward, the merger still faces a major legal challenge in the United States. A coalition of 12 states, led by California, has filed an antitrust lawsuit seeking to block the deal.
UK Approval Comes With Conditions
The Competition and Markets Authority concluded that the merger would not substantially lessen competition in the UK market. The regulator found that the combined entity would continue to face sufficient competition from Universal, Disney, Sony, and other studios in the theatrical film market. In the subscription-video-on-demand market, the CMA also determined that competition would remain adequate.
A CMA spokesperson stated: “We have cleared this deal as it does not raise competition concerns in the UK. The evidence shows that, after the merger, Paramount will continue to face sufficient competition in the various areas it operates in”.
Culture Secretary Lisa Nandy had previously expressed concerns about media plurality and the potential impact on UK audiences. However, she has now approved the deal after Paramount made significant concessions.
Paramount agreed to legally-binding commitments to protect UK broadcasting interests. These include:
- Channel 5 will continue operating as a public service broadcaster until at least the end of 2034
- Channel 5 News will retain editorial independence and remain separate from CBS News and CNN International
- Linear and on-demand services in Britain will retain distinct editorial identities for five years
- Children’s channels like Nickelodeon and Cartoon Network will remain distinct from each other
- The deal will not reduce the number of people commissioning content in Britain
- Channel 5 will continue backing UK-originated content covering drama, factual, and entertainment shows
The DCMS will monitor Paramount’s implementation of these commitments, with the company required to provide annual statements of compliance.
US Legal Challenge Remains
Despite the UK clearance, the merger faces a significant hurdle in the United States. Twelve states, including California and New York, have sued to block the deal over antitrust concerns. The states argue that combining two major studios would violate federal antitrust law by reducing competition across theatrical movie distribution, basic cable, and streaming services.
The legal battle escalated in July when a federal judge ordered Paramount and Warner Bros. Discovery to halt their merger for at least two weeks. California Attorney General Rob Bonta called the ruling “a critical first win in our case to ensure this megamerger never sees the light of day”.
A federal judge has now set a March 2027 trial date for the antitrust case. The trial is scheduled to begin on March 2 and run until March 19. Paramount had requested a November 2026 trial date, but the judge’s decision to schedule it for March 2027 represents a significant delay.
The delay comes with substantial financial consequences. Starting October 1, Paramount is required to pay “ticking fees” of 25 cents per share for each quarter the deal remains unclosed. This amounts to approximately $7 million for each day the process drags on. Industry analysts estimate Paramount will need to pay at least an additional $1.3 billion due to the trial delay.
Paramount has agreed not to close the deal until either the court case is resolved or June 1, 2027, whichever comes first. The companies will remain completely separate, competing operations until a final verdict is reached.
David Ellison Defends the Deal
Paramount CEO David Ellison has publicly defended the merger for the first time, publishing an op-ed in The New York Times. He rejected claims that a combined media giant would exert excessive control over the market or erode newsroom independence.
Addressing concerns over the future of CBS and CNN, Ellison insisted the news outlets would remain non-partisan and positioned to “tell it straight down the middle”. He also pointed out that a merged Paramount-Warner would account for less than 20% of US television watch time – dropping to around 13% when accounting for YouTube – as it competes against tech giants like Netflix, Amazon, and Apple whose resources “dwarf ours”.
Ellison committed to expanding traditional production, promising 30 theatrical films and 170 television series annually, backed by more than $30 billion in annual content investment.
However, his op-ed did not go over well with CNN staff. One anonymous CNN employee told Status’ Oliver Darcy: “We all have eyes and ears and see what’s happening at CBS. You can’t just write an op-ed and erase that”.
Global Approvals Already Secured
The UK clearance adds to a growing list of international approvals for the merger. The deal has already received clearance from the US Department of Justice, the European Commission, and regulators in Australia, Austria, Brazil, Canada, China, Kuwait, Saudi Arabia, Serbia, South Africa, Ukraine, Montenegro, New Zealand, and North Macedonia. Foreign direct investment authorities in Spain, Germany, Slovenia, Belgium, Czechia, Italy, France, and Romania have also signed off.
Paramount welcomed the UK’s decision, calling it “an important milestone” towards completing the Warner purchase.
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What the Combined Company Would Look Like
A Paramount-Warner merger would bring together two of the five remaining legacy studios in Hollywood. The combined company would control:
- Film studios: Warner Bros. Pictures and Paramount Pictures, home to franchises including Superman, Batman, and Top Gun
- Streaming services: HBO Max and Paramount+
- News networks: CNN and CBS News
- Television: UK’s Channel 5, TNT Sports, Nickelodeon, and Cartoon Network
The merger would create a media powerhouse capable of competing more effectively with streaming giants like Netflix, Amazon, and Apple.
Also Read: Paramount and Warner Bros. $110 Billion Merger Paused by Judge After States File Antitrust Lawsuit
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