Concessions Pave Way for Media Giant
EU Readies Approval for Paramount-Warner Bros. Discovery Deal Contingent on Remedies
Key Points
EU competition chief Teresa Ribera signaled regulators are examining whether Paramount Skydance’s takeover of Warner Bros Discovery could restrict how filmmakers get their content to audiences, stressing the need for ‘alternatives that producers and filmmakers can find’ to reach cinemas and homes and flagging potential limits on creativity, cultural heritage, and languages.
Paramount has indicated it would consider exiting its joint venture with Universal Pictures for movie distribution as a condition for EU clearance of the deal.
The EU decision deadline is July 7, with a path to approval or a possible Phase 2 review if remedies are not sufficient; remedies would need to be filed by early July to afford a brief extension period.
If cleared, the merger would unite Paramount Skydance’s assets with Warner Bros Discovery’s, including HBO and CBS News, significantly bolstering Paramount’s competitive stance against Netflix.
Paramount has engaged directly with EU authorities in Brussels as part of the review, which is taking place under EU merger rules and potentially foreign subsidies regulations, signaling ongoing concessions talks.
The European Union is set to approve Paramount Skydance's $110.9 billion takeover of Warner Bros. Discovery — but only if Paramount agrees to key concessions. EU Competition Chief Teresa Ribera signaled on June 24 that approval is likely, telling Bloomberg that regulators are assessing "to what extent there is a reduction of the capability of creators to reach their audiences in the context of this deal." The July 7 deadline is fast approaching.
Paramount executives met with EU officials in Brussels just one day earlier, on June 23, to discuss potential remedies, according to Financial Times. If the two sides cannot agree on sufficient fixes before the deadline, the deal could be pushed into a longer Phase 2 inquiry — a costly delay neither party wants.
Paramount May Exit Universal Joint Venture to Win Approval
The biggest concession on the table is Paramount's exit from its international film distribution joint venture with Universal Pictures. That joint venture helps get movies into European cinemas. Regulators worry that a combined Paramount-Warner entity, controlling roughly 30% of European theatrical revenue between 2021 and 2024, could act as a gatekeeper — squeezing out independent filmmakers, according to Bloomberg Law.
Ribera stressed the need for "alternatives that producers and filmmakers can find" to reach both cinemas and homes. Exiting the Universal joint venture would reduce Paramount's grip on European film distribution. But it could also raise costs for European theaters forced to find new distribution partners, according to The Capitol Forum analysis cited by researchers.
EU Scrutiny Goes Beyond Antitrust — Foreign Money Is Also Under the Microscope
The European Commission is not just running a standard antitrust review. It is also examining the deal under the EU's Foreign Subsidies Regulation — a 2023 law that checks whether foreign government money distorts competition inside the EU. Backers of the deal include Saudi Arabia's Public Investment Fund and Abu Dhabi's L'Imad, both sovereign wealth funds, according to Financial Times.
A coalition of over 25 industry groups, including the International Union of Cinemas, has urged the EU to block the deal entirely. They argue it creates a "non-European gatekeeper" with outsized control over European films and news. The EU's dual-track review makes the approval process unusually complex — and the remedies will need to be filed by early July to allow even a brief extension.
U.S. Already Cleared the Deal — Europe Is the Last Big Hurdle
The U.S. Department of Justice signed off on the merger on June 12 with no conditions — no asset sales required, according to Reuters. WBD shareholders had already voted overwhelmingly in favor of the deal on April 23. That leaves the European Commission as the last major regulatory body that could force changes or block the transaction entirely.
If the EU clears the deal, CEO David Ellison will lead one of the world's largest media companies — combining Paramount's film studio with Warner's HBO, CNN, and a library of thousands of titles. Ellison has pledged to release 30 theatrical films per year and told Deadline that "we have no intention to pull back on production." The combined company will carry roughly $85 billion in debt.
A $7 Billion Breakup Fee Hangs Over the Negotiations
The stakes for both sides are enormous. If the Paramount deal falls through, WBD would collect a $7 billion breakup fee from Paramount, according to Seeking Alpha. Paramount itself paid a $2.8 billion breakup fee to Netflix after WBD pivoted away from Netflix's earlier $82.7 billion offer in February 2026. That earlier Netflix bid collapsed partly because European cinema groups feared Netflix would sideline theatrical releases in favor of streaming.
For Paramount, the cost of failure is high. Analysts at GuruFocus note the company trades at a price-to-sales ratio of just 0.58, a sign investors see it as undervalued without a stronger parent. The EU decision on July 7 will determine whether Ellison's bet on old-media consolidation pays off — or triggers one of the largest breakup fees in entertainment history.
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