US media watchdog signals support for Paramount’s $110bn Warner Bros deal

The chair of the US media watchdog signalled Paramount’s $110bn deal to buy Warner Bros Discovery will have an easier path to regulatory approval than Netflix’s pact and played down competition concerns over a combination of CBS and CNN, the companies’ television networks.

Paramount became the final remaining bidder for Warner Bros last week after Netflix refused to counter its offer of $31 a share.

Brendan Carr, chair of the Federal Communications Commission, told the FT in an interview at the Mobile World Congress in Barcelona on Monday that there had been “concerns raised in Washington about the concentration of power” arising from Warner Bros’ previously agreed deal with Netflix.

But he added that “obviously the level of market share and issue with a Paramount purchase is drastically different”.

Carr, who was appointed in 2024 by US President Donald Trump, said the majority of the regulatory work on the deal would be carried out by the Department of Justice.

The FCC, which regulates traditional broadcast airwaves, will play a minimal role in examining the deal put in place by Paramount, which is owned by chief executive David Ellison, son of longstanding Trump supporter and Oracle founder Larry Ellison. But Carr’s views help provide a signal of what the White House thinks of the takeover.

Paramount’s deal is funded by $47bn in equity, fully backed by the Ellison family and US private equity firm RedBird Capital Partners. The deal is also being financed by a group of Middle Eastern sovereign wealth investors, all of whom agreed to forgo governance rights, as well as tens of billions of dollars in debt.

Carr said: “All the information that I’ve seen about that foreign debt . . . is that would qualify under FCC rules as what we call bona fide debt, meaning, it would be a very quick, almost pro forma review.”

The deal would have broad implications in the entertainment business and in news media. It will combine two century-old Hollywood studios, the Paramount+ and HBO Max streaming services and a pair of major TV news networks, Warner’s CNN and Paramount’s CBS News.

While some observers are raising concerns over Paramount consolidating a powerful position in news media at a time when there are worries over the industry’s independence, Carr described the competition in the sector as generally “very robust”.

“We’re looking at changes from a regulatory perspective to try to encourage more investment and more scale in broadcast,” Carr said. He added the FCC does not directly regulate the content of cable channels.

Trump also has multiple interests in the deal — not least of which is seeing changes at CNN, a longtime target of the president’s ire.

The DoJ is expected to comply with what it views as the US president’s wishes, said Reilly Steel, a professor at Columbia Law School — a move he labelled “anticipatory compliance”.

“Trump will be the ultimate decider as to whether the antitrust authorities actually challenge any combination here,” Steel said, adding that Ellison, a major Republican donor, has the president’s ear.

“Larry Ellison is putting his own money behind this transaction, so he has a personal interest in seeing it go through.”

The DoJ did not immediately respond to a request for comment.

Other regulatory reviews loom for Paramount, however. California’s attorney-general, Rob Bonta, warned its proposed takeover has “not cleared regulatory scrutiny” and that the state intends “to be vigorous” in its review.

The takeover would also result in the consolidation in ownership of two of the world’s five major movie studios, giving Paramount greater power over payments and wages.

In Europe, where cinema operators have voiced concerns over the deal, analysts expected the proposed deal to be subject to an intensive review.

Paramount is in talks with regulators in Brussels, people briefed on the matter said. The company is on the hook for a $7bn break-up fee if the deal is not approved.

Additional reporting by Stefania Palma in Washington