The Competition and Markets Authority (CMA) has determined that the £111bn merger between Paramount and Warner Bros Discovery will encounter "sufficient competition" within the UK. This conclusion, detailed in a full decision published on Monday, aims to prevent the combined Hollywood entity from acquiring undue market power.
The regulator examined the deal's potential impact on various sectors, including cinemas, streaming services, children's television, and creative workers. Despite concerns raised by some cinemas about fewer film releases or altered revenue-sharing terms, and warnings about the potential weakening of creative workers' bargaining positions, the CMA found these risks to be adequately mitigated by existing competition.
While the merged company is projected to become the UK's largest theatrical film distributor, holding an estimated market share of 20 to 30 per cent, the CMA noted that Universal and Disney also command similar shares. The watchdog also found that Paramount and Warner Bros are no closer competitors to each other than they are to Universal, Disney, or Sony. Competition from other major studios, smaller producers, and various streaming services, including Netflix, Amazon Prime Video, Disney+, Apple, BBC iPlayer, and ITVX, was deemed sufficient to maintain market balance.
The UK decision marks a significant step for Paramount, which stated last week it had secured regulatory approval in 68 countries. A lawsuit in California and 11 other US states remains the final hurdle for the deal's completion.