paramount skydance

Britain’s culture minister may challenge Paramount Skydance’s takeover of Warner Bros. Discovery — presenting a potential speed bump to David Ellison’s plan to wrap up his $111-billion deal by September.

Earlier this month, Paramount secured the U.S. Justice Department’s blessing to buy the Warner assets, which include CNN, HBO, Cartoon Network, Animal Planet and the Warner Bros. film and TV studios in Burbank.

Paramount also must win the approval of British and European regulators, who are known for drilling deeply into media matters because of their influence on society.

Britain’s Competition and Markets Authority took a preliminary step this month by opening an investigation into Ellison’s proposed merger.

On Tuesday, Lisa Nandy, Britain’s secretary of state for culture, media and sport, notified Parliament that she was inclined to intervene in the blockbuster deal.

In a written statement, Nandy cited her ability to weigh in on “public interest grounds,” due to concerns about maintaining a competitive media market in Britain.

“The UK’s move to intervene in the Paramount–WBD deal confirms what we’ve been saying for months. The real regulatory risk was never in the US — it’s in Europe,” Forrester VP Research Director Mike Proulx said Tuesday in a statement.

While Nandy cautioned she has not made “a final decision on intervention at this stage,” she has invited Paramount and Warner Bros. to respond to her concerns by Monday.

Lisa Nandy, Britain’s secretary of state for culture, media and sport, has said she may intervene in the deal on “public interest grounds.”

(Alishia Abodunde / Getty Images)

Paramount did not offer immediate comment.

The company owns CBS News, children’s channel Nickelodeon and Channel 5, one of the largest over-the-air television broadcasters in the United Kingdom.

Warner Bros. Discovery owns CNN, Cartoon Network and TNT Sports, which broadcasts the Olympics, Champions League and Premier League soccer matches.

“I am conscious that the proposed acquisition is global in nature,” Nandy wrote in her statement. “In reaching this decision, my focus has been, and will remain, on the UK public interest and the range of services available to UK audiences, including Channel 5, TNT Sports, Cartoon Network, Nickelodeon, and CNN International, as well as Paramount+ and HBO Max.”

If Nandy decides to intervene, the Office of Communications, known as Ofcom, would launch an assessment of the deal. Britain’s Competition and Markets Authority also would determine how the merger might reshape the competitive landscape.

Teams from the two companies have been huddling for months to plan for the melding of the two operations as soon as Paramount receives all of its regulatory approvals.

Australia, New Zealand, China, Saudi Arabia, Ukraine, Serbia, France and Italy have already given their approvals to the deal.

Saudi Arabia’s Public Investment Fund is planning to contribute $10 billion to help the billionaire Ellison family pull off the merger, which would make the Saudi royal family a significant, although passive, equity owner. In addition, the royal families of Qatar and Abu Dhabi have agreed to each contribute $7 billion in equity financing.

The Federal Communications Commission must evaluate the foreign ownership stakes due to Paramount’s holding of CBS broadcast licenses. U.S. antitrust regulators already have concluded the combination would not violate federal anticompetition laws.

Approval had been expected because President Trump — who has friendly ties with Ellison and his father, tech billionaire Larry Ellison — favors the deal.

Trump has been eager for changes at CNN.

The U.S. government stopped short of asking Paramount to make concessions or divestitures. Many expect that Paramount may have to reconfigure its children’s television holdings abroad due to the proposed combination of two large players — Nickelodeon and Cartoon Network.

Nandy suggested that Britain also should scrutinize the impact of combining two major streaming services, HBO Max, a Warner property, with Paramount+.

HBO programming, including “Game of Thrones,” “Boardwalk Empire” and “Succession,” has long been popular in Britain.

A coalition of state attorneys general, led by California‘s Rob Bonta, also is expected to challenge the deal, in part, due to concerns about news media consolidation. Bonta’s office has said the matter remains under review.

Opposition to the deal has been building in the U.S. for months. A group of Hollywood activists — led by actors Jane Fonda and Mark Ruffalo — have spearheaded a “block the merger” campaign that now has support from more than 5,000 entertainment workers.

The group’s open letter calls on Bonta to take action to thwart the Ellison expansion effort. Paramount’s Chief Legal Officer Makan Delrahim has blasted the campaign, calling it “fear-mongering” and a partisan distortion of antitrust law.

Forrester’s Proulx noted differences in attitudes toward the deal among the various constituencies.

“For U.S. consumers, this merger has become a proxy fight about political influence and control of media,” Proulx said. “In the UK, it’s being treated as a structural competition issue where regulators, not consumers, will decide how this deal plays out and how long it takes.”

A group of five consumers have filed a lawsuit against Paramount Skydance seeking to block its acquisition of Warner Bros. Discovery and unwind the earlier merger that joined the storied Melrose Avenue studio with David Ellison’s Skydance Media, alleging that both deals reduce marketplace competition.

The lawsuit, filed Thursday in U.S. District Court in the Northern District of California, alleges the Paramount-Warner deal will lead to increased prices, fewer consumer choices and reduce production of film and TV since a major rival in the entertainment business will be eliminated.

The suit also alleges that the Paramount-Skydance merger, which was finalized last year, led to higher prices for the Paramount+ streaming service.

The plaintiffs — Pamela Faust, Len Marazzo, Lisa McCarthy, Deborah Rubinsohn and Gary Talewsky — are either Paramount+ subscribers, pay for cable bundles that include Paramount-owned TV channels or are moviegoers who watch films in theaters.

The deal activity for Paramount is part of a growing list of recent media mergers, including Walt Disney Co.’s 2019 acquisition of much of 21st Century Fox and Amazon’s purchase of MGM in 2021.

“These acquisitions show an industry moving by successive combinations toward fewer independent rivals, exactly the consolidation backdrop that heightens the competitive threat posed by the next merger, even if the combined firm remains smaller than the largest platforms,” the lawsuit states.

Paramount is aware of the lawsuit and “confident that it is without merit,” a company spokesperson said.

“The combination of Paramount and [Warner Bros. Discovery] will create a stronger competitor that is well positioned to serve as a champion for creative talent and consumer choice,” the spokesperson said in a statement.

The Paramount-Warner deal is currently winding its way through regulatory approvals. While that process is underway, Paramount has asked the Federal Communications Commission for permission to exceed a cap on foreign ownership for U.S. media companies.

Paramount expects to receive $24 billion in funds from three Middle Eastern royal families, who will become part owners of the combined company. Those total funds will represent about 49% of equity in that new company, exceeding the current foreign ownership cap of 25%.

Paramount has said the Ellison family and RedBird Capital Partners “collectively hold the largest equity stake in the combined company and continue to be the sole owners of Class A Common Stock, representing 100% of the voting shares.”

But on Friday, Rep. Sam Liccardo (D- San Jose) urged the FCC to deny Paramount’s petition on the foreign ownership aspect of the deal.

“Congress did not entrust the public airwaves to this agency so that it could auction off America to Riyadh, Abu Dhabi and Doha,” he wrote in a statement. “This will not stand.”

Paramount Skydance’s proposed takeover of Warner Bros. Discovery cleared a major hurdle Thursday as Warner stockholders overwhelmingly embraced the $111-billion deal.

Approval was expected. Paramount Chairman David Ellison’s proposal would pay Warner investors $31 a share — four times the price of the company’s stock a year ago. Warner Bros. officials did not disclose the precise vote count during the nine-minute special shareholder meeting beyond saying the merger “received sufficient votes and has overwhelmingly passed.”

Paramount offered the generous premium to compete with, and ultimately triumph over, Netflix, which withdrew from the auction in late February after Ellison’s father, Oracle billionaire Larry Ellison, agreed to guarantee the financing of his son’s deal.

The merger would create a new Hollywood behemoth by giving Paramount, which owns CBS and the Melrose Avenue film studio, such valuable assets as HBO, HBO Max, CNN, TBS, Food Network and Warner Bros.’ film and television studios in Burbank. Warner controls beloved TV shows, franchises and movies, including “Casablanca,” Harry Potter, D.C. Comics, “Game of Thrones,” “Euphoria,” “The Pitt,” and “Rooster.”

“Shareholder approval marks another important milestone towards completing our acquisition of Warner Bros. Discovery, building on our successful equity and debt syndications and progress across regulatory approvals,” Paramount said Thursday in a statement. “We look forward to closing the transaction in the coming months and realizing the creation of a next-generation media and entertainment company that better serves both the creative community and consumers.”

Paramount now must secure regulatory approvals in the U.S. and abroad. Ellison, who is poised to honor President Trump with a dinner Thursday evening in Washington, hopes to complete the deal by late summer.

Shareholders, however, made known their disdain for Warner Chief Executive David Zaslav’s proposed golden parachute, which could swell to $887 million, depending on when the transaction closes. His cash, stock and options would be valued at more than $550 million. Warner board members also agreed to pay his tax bill, which could approach $330 million, should the merger be completed by year’s end.

Shareholders, in a non-binding vote, voted against Zaslav’s package.

Paramount’s deal has encountered significant opposition in Hollywood and beyond.

More than 4,000 filmmakers, actors and industry workers, including Ben Stiller, Bryan Cranston, Ted Danson, J.J. Abrams and Kristen Stewart have signed an open letter asking California Atty. Gen. Rob Bonta and other regulators to block the deal.

Opponents fear the consolidation would be lead to massive layoffs and diminish the quality of programming that Warner Bros., CNN and HBO are known for. Hollywood has sustained thousands of layoffs over the last six years; the film production economy hasn’t recovered from shutdowns during the 2023 labor strikes.

“This is already an incredibly consolidated industry where writers have seen merger after merger leave fewer and fewer companies in control of what our members can get paid to write,” Michele Mulroney, president of the Writers Guild of America West, said Wednesday during a press briefing organized by Free Press and other progressive groups that oppose the merger.

“A combined Warner Bros. and Paramount would create a media behemoth with tremendous leverage to reduce content, to raise prices, to increase control of production, to suppress member compensation, worsen working conditions and silence the voices of our members,” Mulroney said.

Trump has long agitated for changes at CNN, and few expect his Justice Department to block the transaction. Defense Department Secretary Pete Hegseth echoed the sentiment. “The sooner David Ellison takes over that network the better,” Hegseth told reporters in March.

It’s unclear whether Bonta or other state attorney generals will file a lawsuit to try to stop the deal. Bonta previously told The Times that his office is reviewing the consolidation.

“This deal can get blocked. I personally think it will get blocked — or undone,” Alvaro Bedoya, former Federal Trade Commission member who now serves as a senior adviser to the American Economic Liberties Project, told reporters Wednesday. He pointed to other proposed mergers that unraveled due to fierce opposition, including the proposed combinations of grocery giants Kroger and Albertson’s.

David Ellison has promised to keep HBO entact and the Paramount and Warner Bros. movie studios humming. He promised cinema owners last week that a combined Paramount-Warner Bros. would release 30 movies into theaters each year.

“This transaction uniquely brings together complementary strengths to create a company that can greenlight more projects, back bold ideas, support talent across multiple stages of their careers,” Paramount said in a statement to push back on the opposition. The company would have the power to “bring stories to audiences at a truly global scale — while strengthening competition by ensuring multiple scaled players are investing in creative talent.”

To finance the Warner takeover, Ellison’s billionaire father, Larry Ellison, has agreed to guarantee the $45.7 billion in equity needed. Bank of America, Citibank and Apollo Global have agreed to provide Paramount with more than $54 billion in debt financing.

Paramount has enlisted a former Trump administration official, lawyer Makan Delrahim, who served as Trump’s antitrust chief during the president’s first term.

In a confident move, Delrahim filed to win the Justice Department’s blessing in December — even though Paramount didn’t have an agreement with Warner Bros. Discovery’s board at the time. In February, a key deadline for the Justice Department to raise issues with Paramount’s proposed Warner takeover passed without comment from the Trump regulators.