Paramount buys Warner: a new media giant emerges

The US Justice Department on Friday approved the takeover of Hollywood studio Warner Bros. Discovery by the conglomerate Paramount Skydance. This decision paves the way for this megamerger for around $111 billion, which should give birth to a new media giant.

At the end of an eight-month investigation, the Department’s antitrust division concluded that the operation was “not likely to harm competition or American consumers”, whether in streaming, television or the production and distribution of films in theaters, according to a press release. She therefore gave up contesting it, without requiring transfers of assets or commitments.

Late on Netflix, Amazon Prime and Disney+

The Department goes further: according to it, the merger should have the effect of “increasing competition throughout the media and entertainment ecosystem, with benefits for American consumers and workers.” He points out that Paramount and Warner are “historically late” entrants into subscription streaming.

Their platforms Paramount+, HBO Max and Discovery+ have fewer subscribers than the three industry leaders, Netflix, Amazon Prime and Disney+. The new set would therefore offer a more robust alternative to these giants, according to the Ministry.

However, a large part of Hollywood is opposed to this takeover, fearing massive job cuts. Concerns brushed aside by the ministry, for which these “concerns expressed in terms of employment do not raise problems relating to competition law”. This green light removes the main federal regulatory obstacle to the merger of the historic rivals, both of which are among the five largest Hollywood studios.

L’Europe mène l’enquête

The judicial review is not over yet: a group of around ten states, led by California, is preparing an antitrust complaint which could be filed this month, according to Bloomberg. The office of California Attorney General Rob Bonta, who participated in the federal investigation, indicated this week that the acquisition was “still the subject of an ongoing investigation.” In Europe, the British competition authority announced on Tuesday the opening of an investigation, and the European Commission is also examining the legality of this merger for its market.

The new group would combine Paramount Skydance’s holdings, such as CBS and the “Mission: Impossible” and “Star Trek” franchises, with those of Warner Bros. Discovery, including the CNN channel, the “Harry Potter” and “DC Comics” universes, and the HBO Max platform. Merged with Paramount+, it would claim around 200 million subscribers, according to Politico.

The conglomerate, whose boss David Ellison is the son of billionaire and Donald Trump ally Larry Ellison, won after the withdrawal of Netflix’s rival offer in February.

Agence France‒Presse (AFP) is a global news agency. It is one of the sources of international information that 20 minutes uses.