The UK government and its competition watchdog has cleared Paramount’s $110 billion acquisition of Warner Bros Discovery after David Ellison provided reassurances, leaving US states led by California as the final major hurdle to the deal.
Ellison, Paramount Skydance’s chief executive, offered legally binding guarantees of at least five years on programming commissioned in Britain and the independence of Britain’s Channel 5 news, the UK government said in letters to the companies.
That was sufficient to answer concerns raised by media minister Lisa Nandy, who said in June she could intervene in the deal and potentially order a public-interest investigation despite approvals from regulators in the US, China and elsewhere.
Lawyers and analysts told Reuters last month that the threat of intervention was more likely aimed at securing commitments from Paramount rather than blocking the deal outright.
Paramount has now agreed that the combined group’s linear and on-demand services in Britain would retain distinct editorial identities for five years, including children’s TV channels Nickelodeon and Cartoon Network.
Paramount-owned Channel 5 would continue to operate as a public service broadcaster until its licence expires at the end of 2034 and its news would remain editorially separate from CNN International and CBS News, the government said.
News archives, including CNN, CBS and Channel 5 news, would also remain available for bona fide licensees on standard commercial terms, it added.
Paramount also agreed that the deal would not result in a reduction in the number of people commissioning content in Britain, nor in any reduction in the quality and range of content commissioned.
The UK Competition and Markets Authority separately said the deal would not substantially lessen competition in movie distribution, children’s TV channels and streaming services.
Paramount welcomed the CMA decision as an “important milestone” in closing the deal, while it said it was pleased it had agreed a path forward with the government.
The twin decisions spare the companies lengthy regulatory reviews in Britain, leaving litigation brought by US states led by California as the principal remaining obstacle to closing the deal.
Warner Bros’ revenue disappoints on soft ad sales, weak box-office performance
Warner Bros Discovery has today missed second-quarter revenue expectations, hurt by lackluster box-office performance and soft advertising sales due to the absence of NBA games.
Studio revenue slumped 39%, with releases including “Mortal Kombat II” and “Supergirl” failing to replicate the blockbuster success of last year’s top grosser “A Minecraft Movie” and “Sinners”.
Warner’s film slate is weighted toward the second half of the year, with major releases such as “Digger” and “Dune: Part Three” expected to boost box-office performance.
The absence of the National Basketball Association games broadcasts this year, coupled with declines in domestic linear TV audiences, drove a 22% drop in advertising revenue for Warner Bros during the second quarter.
Higher energy prices linked to conflicts in Iran and Ukraine weighed on international advertiser spending. Warner said the 2026 FIFA World Cup reduced its share of viewers and advertising revenue in several markets during June and July.
While revenue at the CNN-owned networks division fell 17%, a 23% decline in operating expenses due to the absence of costs tied to NBA rights and lower content spending helped Warner post a surprise quarterly profit of six cents per share.
Analysts polled by LSEG had expected a loss of 13 cents.
Warner’s streaming business, which is central to the Discovery deal, remained a bright spot in the second quarter with HBO Max’s international expansion and original content like “The Pitt” driving revenue up 10%.
The combined HBO Max and Paramount+ service is expected to give greater scale to compete with streaming giants Netflix and Disney.
Warner Bros Discovery reported revenue of $8.72 billion in the second quarter, well below the LSEG-compiled estimate of $9.29 billion.
