The UK Culture Secretary, Lisa Nandy, has signaled potential government intervention in Paramount’s proposed $110 billion acquisition of Warner Bros, citing concerns over media plurality and the impact on public interest. The deal, which would merge two of Hollywood’s major film studios and combine their extensive media holdings, is under scrutiny amid broader worries about concentration of media ownership in the UK.

Paramount’s portfolio includes Channel 5, CBS News, Nickelodeon, and Comedy Central, while Warner Bros owns CNN, TNT Sports, Cartoon Network, and operates the HBO Max streaming service. The merger would create a powerful entity controlling Paramount Plus and HBO Max, two leading streaming platforms, a sector not currently regulated under existing UK media plurality laws.

Nandy expressed concern that, despite the lack of statutory rules covering video-on-demand services, the rapid rise of streaming as a dominant mode of viewing necessitates reconsideration of regulatory frameworks. She indicated she might pursue new legislative powers to investigate mergers involving streaming services if the combination of Paramount Plus and HBO Max raises public interest issues.

The Culture Secretary has issued a formal notice to both companies, allowing them a week to respond, after which she may formally refer the deal to the communications regulator Ofcom for a detailed inquiry. This potential intervention is separate from an ongoing investigation by the Competition and Markets Authority (CMA), which is already examining competition and jobs implications of the merger. Paramount has committed to $4 billion in cost savings, raising concerns particularly about job losses; Warner Bros employs approximately 4,000 people in the UK.

Paramount has pledged to maintain a steady release schedule of 30 films annually in cinemas with a 45-day theatrical window and has vowed to continue licensing content to other streaming platforms as well as acquiring shows from third-party producers. Despite these assurances, critics warn the merger could reduce the diversity of films available to audiences.

If the government opts to use its full regulatory powers, clearance of the deal by UK authorities could be delayed until next year. Nandy emphasized that while the transaction is global in scope, UK public interest considerations are paramount in the government’s decision-making process.

Paramount representatives have responded that they remain confident the transaction poses no issues for media plurality in the UK and that they continue to engage constructively with government bodies and regulators. Meanwhile, the deal has already received clearance from the U.S. Department of Justice, although it faces opposition from some U.S. states and must still gain approval from American communications regulators.

The proposed merger has sparked unease among staff at CNN and notable Hollywood figures, including Jane Fonda and Ben Stiller, who have voiced concerns about its implications. This deal emerges amid significant disruption in the media industry, illustrated by Comcast’s recent announcement to separate its NBCUniversal and Sky assets into an independent publicly traded company, leaving behind its broadband business.