Paramount-Warner Merger Would Lead to Fewer Films, Lower Pay, and Weaker Film Industry, OMI Warns

The Center for Media and Digital Governance and Open Markets Institute Europe has urged the European Commission to launch a full investigation into Paramount Skydance’s proposed acquisition of Warner Brothers, warning that merging two of Hollywood's most powerful studios would threaten European filmmakers and distributors, industry workers, and media pluralism. The submission also urges officials to refer the merger to the European Board for Media Services and relevant national authorities for review under media rules laid out in the European Media Freedom Act (EMFA).

When Disney acquired Fox in 2019, the number of films released annually by the combined companies fell by 40% – the submission argues the further industry concentration created by the Paramount-Warner deal risks repeating the same pattern. 

"European cinema is already fighting for its life – squeezed by changing audience habits, rising costs, and years of consolidation. We've seen a drastic decline in the number of films made after previous mergers", said Research Fellow Claire Lavin with Open Markets Europe. "This merger would have a further disastrous effect, leaving European artists, creators and cinemas more exposed and audiences with fewer, less diverse stories to watch."

"With significant political pressure and regulatory weakness in the United States, Europe may end up being the last line of defence against a deal which will potentially devastate the industry in the US, EU and beyond," said Dr Courtney Radsch, Director of the Center for Media and Digital Governance (CMDG). 

The Paramount-Warner merger will strengthen the already existing market power held by the two powerful, vertically integrated American film studios, with major American and European directors and film stars warning it will throttle the industry. The new industry behemoth will be uniquely placed to dominate production and distribution markets and squeeze producers, distributors and cinemas. 

Workers, creators and smaller businesses will be particularly vulnerable to increased market concentration, with dominant firms having greater power to degrade employment conditions, reduce wages, and accelerate use of  artificial intelligence. 

As the transaction will combine competing TV channels – including HBO Max and CNN – it will also exacerbate media concentration in news, sports and entertainment and threaten the quality and diversity of TV content. Open Markets has warned that this increased consolidation will hurt media pluralism and risks violating impartiality and editorial independence obligations pursuant to Article 22 EMFA, arguing that the case must be reviewed under competition rules by the European Commission  and under media pluralism and editorial independence by the European Board for Media Services and relevant national authorities.

The submission warns that any behavioural commitments – including promises to continue to release a minimum number of films per year or to comply with editorial independence obligations – risk being both ineffective and harder to enforce than structural remedies. The Commission must verify that any remedy package will effectively alleviate all competition concerns.

The full submission can be found here.

Open Markets has also made observations to the UK Competition Markets Authority's call for observations on the case. CMDG Director Dr Courtney Radsch released a statement reacting to the announcement of the deal and submitted a testimony earlier this year to the US Congress urging lawmakers to block further consolidation in the sector. The CMDG is part of a US coalition that has shed light on the harms raised by this transaction.