Paramount Skydance has notched a needed win as it continues to pursue its $111-billion deal to buy Warner Bros. Discovery.<\/p>\n
On Wednesday, the European Commission gave its consent, allowing tech scion David Ellison\u2019s <\/a>industry-reshaping merger to move forward in the countries that make up the European Union. <\/p>\n European regulators added just one condition: Paramount must end a partnership with Universal Pictures to share distribution of movies in Europe. Beyond that, regulators concluded that even with the proposed Paramount-Warner consolidation there was plenty of other studios making movies to avoid competitive harms.<\/p>\n \u201cThe Commission found that, at film production level, enough film studios remain as competitors,\u201d the European Commission said in a statement. \u201cThese include other major US studios like Disney, NBC Universal … and Sony, along with smaller US studios such as Amazon MGM, A24 and Lionsgate, as well as European studios.\u201d<\/p>\n But the merger would result in a \u201chigh concentration\u201d of film distribution, the commission said, so Paramount would have a year to end its joint venture, United International Pictures, which distributes Paramount and Universal films to cinema owners in Europe. Adding Warner Bros. would give that firm too much heft, the commission said.<\/p>\n Paramount must not \u201cdirectly or indirectly … enter into any agreement or understanding with Universal to jointly co-distribute films\u201d in the European countries for 10 years, the commission said.<\/p>\n Despite early concerns about dominance in the children\u2019s television market, Paramount will not be required to divest Cartoon Network, a Warner asset, because of its ownership of Nickelodeon.<\/p>\n \u201cThe Commission found that streaming platforms offering children\u2019s content will continue to act as a competitive constraint on the merged entity\u2019s TV channels,\u201d the agency said.<\/p>\n \u201cThe combination of Paramount and WBD will create a stronger, well-capitalized, creative-first media company that is better positioned to compete with companies like Netflix that have come to dominate the industry for audiences, premium content, and creative talent,\u201d Paramount said in a previous statement.<\/p>\n The European Commission\u2019s approval came two days after Ellison\u2019s firm was dealt a substantial setback. <\/p>\n A federal judge in Oakland on Monday issued a temporary restraining order<\/a> preventing Paramount from finalizing the acquisition for at least 14 days as that court case heats up. The decision came after 12 state attorneys general, led by California Atty. Gen. Rob Bonta, filed a lawsuit last week alleging the merger would violate U.S. antitrust rules. <\/p>\n District Judge Araceli Mart\u00ednez-Olgu\u00edn scheduled an Aug. 3 hearing to determine whether a longer-term pause is warranted. The states are expected to seek a preliminary injunction, which would tie up Paramount\u2019s merger for months. <\/p>\n \u201cThis is not remotely over. The United States is not Europe,\u201d deal critic Alvaro Bedoya, a former Federal Trade Commission member who is now a senior adviser at the American Economic Liberties Project, said in a Wednesday statement. <\/p>\n The European Commission joins regulators in Australia, Austria, Brazil, Canada, China, Saudi Arabia, Serbia and South Africa that have found the deal would not crush competition in their markets. Britain\u2019s Competition and Markets Authority is still investigating the merger\u2019s impacts.<\/p>\n Paramount secured approval from the U.S. Justice Department<\/a> last month. The company was hoping to close its blockbuster acquisition of Warner Bros., which owns HBO, CNN and the Burbank studios behind such popular characters as Batman, Superman, Harry Potter, Scooby-Doo, by the end of September to avoid a larger payout to Warner Bros. Discovery shareholders.<\/p>\n In a show of confidence earlier this year, Paramount offered Warner investors $31 a share for their stakes.<\/a><\/p>\n Paramount also agreed to pay a \u201cticking fee\u201d of $.25 per share for every quarter after Sept. 30 that the deal drags on \u2014 payments that would add nearly $7 million a day to the cost of buying Warner Bros. Paramount triumphed over Netflix, which withdrew its bid in late February<\/a> when Paramount raised its bid.<\/p>\n Larry Ellison, co-founder of software giant Oracle, is bankrolling his son\u2019s ambitions to acquire a second major entertainment company<\/a> in less than a year. The Ellison family acquired the smaller Paramount in August.<\/p>\n