To complete the acquisition of Warner Bros. Discovery, worth USD 110 billion, Paramount Skydance must obtain, among others: consent of the European Commission. There is a risk that the EU may raise concerns regarding overlaps in similar elements of the two companies' activities, including: children's channels. According to Bloomberg sources familiar with the matter, the company hopes to avoid selling any assets, but is ready to give up children's channels if the EU so requires.
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The sources added that the company has not yet made a decision on the matter, but should do so soon as July 7 approaches – the original deadline set by the EU to approve the landmark deal or initiate a detailed review.
European Commission approval is one of the final hurdles for Paramount CEO David Ellison to clear after he beat out rival bidder Netflix in the race to take over Warner Bros. Discovery. As Bloomberg emphasizes, if the planned transaction is successful, it will give the Ellison family control over one of the most powerful media empires in the world.
The acquisition will combine two Hollywood studios responsible for legendary films, two major news networks such as CNN and CBS, streaming giant HBO and dozens of cable networks. It will also combine Paramount's Nickelodeon and Warner Bros.'s Cartoon Network. Discovery – two of the most famous children's television brands in Europe. As the agency reminds – on the European market, almost half of all children's channels belong to the USA.
“There is certainly a strong likelihood that the committee will closely examine the overlap between Paramount and Warner Bros. Discovery in the wholesale distribution of children's television channels throughout the region,” said Jennifer Rie, an analyst at Bloomberg Intelligence. “There would be concerns if the total market share exceeded 40% in any country,” she added.
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Paramount declined to comment to Bloomberg on the details of the EU investigation and reiterated that it “has been cooperating with all regulators and law enforcement authorities in a constructive and transparent manner and will continue to do so.” The Commission made no comment beyond confirming the EU's deadline for making a decision.
