US justice department approves $111bn merger of Paramount and Warner Bros Discovery

Deal still under UK scrutiny with new investigation, and could face lawsuit from state attorneys general

Donald Trump ’s Department of Justice has decided to approve the $111bn merger of Paramount Skydance, controlled by the Ellison family, and Warner Bros Discovery, the parent company of networks like CNN and HBO.

The deal was approved by the justice department’s anti-trust division after months of review, and despite the concerns of many people in the entertainment and media industries who believe it will hurt competition by reducing the number of film studios and – most likely – merging two news networks, Paramount’s CBS News and CNN.

“The Division has completed its analysis of the proposed merger of Paramount and Warner Bros and determined based on the evidence received in its investigation that the transaction is not likely to result in harm to competition or American consumers, including with respect to: (1) streaming video on demand (“SVOD”); (2) linear television; and (3) studio development, production, or distribution of films for theatrical release,” the agency said on Friday evening.

While the US government’s approval is a major win for the deal, hurdles remain. Earlier this week, the UK competition watchdog opened an investigation into the merger to determine whether it will result in a “substantial lessening of competition” in the UK. The Competition and Markets Authority (CMA) set a 7 August deadline to determine whether the merger requires a more in-depth review. In addition to reviewing the deal, European regulators are investigating the funding behind the merger; three sovereign-wealth funds in the Gulf have committed a combined $24bn. Both reviews have July deadlines.

Paramount denied the lessening of competition in its statement Friday evening: “We are grateful for the Department of Justice’s thorough review of this transaction, as well as the work of the other agencies that have completed their reviews and provided clearance to date. This deal is pro-competitive, resulting in a stronger company better positioned to compete against dominant technology platforms in an industry increasingly defined by intense competition for audiences, talent, technology, and investment. We remain focused on completing the transaction as soon as possible and delivering its benefits to consumers, creators, and the entertainment industry as a whole.”

On Tuesday, regulators in Australia approved the deal, after determining that it “is unlikely to have the effect of substantially lessening competition in relation to the wholesale supply of films for theatrical release in Australia”, according to a filing with the Securities and Exchange Commission that listed numerous other countries that have blessed the merger.

Journalists at CBS News and CNN have expressed concerns about the possibility of the networks being merged, which would probably entail significant job cuts, as the companies have promised $6bn in synergies from the deal. There is also long-held concern from some staffers at CNN about the possibility of David Ellison and his father Larry, a longtime Trump associate, reorienting the network in an editorial direction more favorable to the president. (David Ellison pledged in March that CNN’s editorial independence would be protected, but there is speculation that he could choose to put CBS News’s embattled editor-in-chief, Bari Weiss, in charge of the cable network.)