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Posted in: HBO, Max, Movies, Paramount+, TV | Tagged: paramount, Warner Bros
Paramount Makes Changes to Warner Bros Deal to Secure EU Approval
The European Commission revealed in a filing that Paramount Skydance has made changes to its Warner Bros Discovery deal to secure EU approval.
Article Summary
- Paramount Skydance offered concessions in its Warner Bros Discovery deal as it seeks European Commission approval.
- The EU review deadline moved from July 7 to July 22, signaling deeper scrutiny of Paramount’s $110 billion merger.
- Reported remedies could include ending the UIP partnership and divesting kids and family brands like Nickelodeon.
- UK scrutiny and a costly October ticking fee raise pressure on Paramount Skydance to close the deal on schedule.
While David Ellison's Paramount Skydance awaits word from British culture minister Lisa Nandy on the planned takeover of David Zaslav's Warner Bros Discovery, it seems the multimedia corporation has made concessions to secure a green light from the European Commission (EC) for its $110 billion deal. In a filing, the EC confirmed that Paramount Skydance has pledged a number of changes to the deal to secure approval (though details were not released), resulting in a "new provisional deadline" of July 22nd, extended from the previous July 7th deadline.
There had been rumblings over the past few weeks that Paramount Skydance may have to cut ties with Universal Pictures regarding their international distribution partnership, United International Pictures (UIP). In addition, there were reports that Paramount Skydance may consider selling off some of its kids/family programming, such as Cartoon Network and Nickelodeon. In a statement from earlier today, Paramount Skydance said that it was "confident that this remedy directly and comprehensively addresses any concerns expressed in the European Commission's preliminary assessment and support the path for timely clearance."
"Following engagement with the parties and independent research, my Department has today written to the current and proposed owners of Warner Bros Discovery on my behalf to inform them that I am minded to intervene" on behalf of the greater public interest, including having a "sufficient plurality of views in news media" and a "sufficient plurality of persons with control of the media enterprises," read the statement from Nandy earlier this week, seen by many as Nandy's heads-up before official actions are taken.
Why does this matter to Ellison and Paramount Skydance? Because of a little clause included in the deal that has suddenly become a very, very big one. Because Ellison was confident the deal would get done in a timely manner, the Warner Bros deal included a "ticking fee": Paramount Skydance will pay a fee to shareholders beginning on October 1st if the merger isn't closed by the end of September. The penalty (or "ticking fee") is $0.25 per share per quarter until the deal is officially done, or approximately $650 million per quarter.
"We are grateful for the continued constructive engagement with all interested government bodies and relevant authorities, including in the UK. We are confident that our proposed transaction does not pose any media plurality issues in the UK and remain confident in our stated transaction timeline," said a spokesperson for Paramount Skydance when news of the UK's concerns first hit headlines.
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