Paramount is giving up a piece of Hollywood history it barely uses anymore to keep a $111 billion deal alive.
Paramount Skydance has agreed to exit United International Pictures, its decades-old film distribution joint venture with Universal, according to reports from Variety and The Hollywood Reporter, after European antitrust regulators demanded the divestment as a condition for approving Paramount’s takeover of Warner Bros. Discovery. The European Commission confirmed Wednesday that Paramount’s filing committing to the exit had been submitted, and pushed its own decision deadline back from July 7 to July 22 to work through it.
The concession is the clearest sign yet of how many separate approvals this single merger needs before it closes, and how much leverage each regulator has managed to extract along the way. The U.S. Department of Justice has already cleared the deal. The U.K.’s Competition and Markets Authority is still running a formal probe of its own, on different grounds, with an August 7 deadline. State attorneys general in California and New York are pursuing an antitrust suit that neither the DOJ’s clearance nor the EU’s concessions will resolve. Brussels is only one jurisdiction of several still standing between Paramount and a finished transaction.
UIP itself is a modest thing to be fighting over now. Founded in 1981, the venture once distributed both companies’ films across most of the world outside North America, giving two Hollywood studios shared control over how their movies reached foreign screens for a generation. Today it operates in a handful of smaller European markets, including Denmark, Greece, Croatia, Hungary, Norway, Poland and Sweden, after decades of larger territories being folded back into each studio’s own distribution arm one by one. European cinema operators nonetheless flagged what remained of it as a competitive risk once Paramount’s catalog would sit inside a company that also owns HBO, Warner Bros. Pictures, CNN, TNT and TBS, and Brussels agreed the exposure was worth closing off even at this reduced scale.
The company on the other side of that math is enormous. The merger unites Paramount’s CBS, Paramount Pictures and Paramount+ with Warner Bros. Discovery’s HBO, HBO Max, Warner Bros. Pictures, CNN, TNT and TBS, financed in part by 24 billion dollars in combined investment from Saudi Arabia’s Public Investment Fund, Abu Dhabi’s L’imad Holding Company and the Qatar Investment Authority, capital that gave Paramount Skydance the balance sheet to outbid Netflix for Warner Bros. Discovery in the first place. Giving up a scaled-back distribution venture in a handful of mid-sized European markets is a small price against that structure, which is precisely why Paramount agreed to it as quickly as it did rather than spend months contesting a divestment request over assets it had mostly already stopped relying on.
Warner Bros. Discovery’s shareholders approved the underlying transaction itself by an overwhelming margin, at $31 a share, with the transaction expected to close sometime in the third quarter if every remaining regulatory track resolves on schedule. That timeline assumes Brussels holds to its new July 22 date, which is itself a revision of an earlier one, a pattern that gives no particular confidence it is the last extension either side will need.
Not every cost of the merger is being negotiated away as cleanly. Warner Bros. Discovery shareholders voted against the exit compensation package for outgoing chief executive David Zaslav this year, a package that includes 34.2 million dollars in cash severance, 517.2 million dollars in equity tied to the combined company and up to 335.4 million dollars in tax reimbursements, valued near 887 million dollars in total, according to a report from Deadline. The vote changes nothing, because it was advisory only. Regulators are extracting real concessions on competition grounds; shareholders objecting to executive pay have no comparable leverage at all.
The deal’s toll is also visible earlier than the closing date, on the air rather than in a filing. Paula Reid’s decision to leave CNN for MS NOW rather than wait to see how a Paramount-controlled newsroom operates was one data point inside the company Warner Bros. Discovery is being folded into, made before the European concessions were even final. Regulators are negotiating market share. On-air talent is negotiating with its own comfort level, on a faster timeline than Brussels is working to.
None of the remaining hurdles are trivial on their own terms. The U.K.’s review is examining media plurality, a different legal theory than the EU’s competition concerns, and the state attorneys general lawsuit does not go away because Brussels is satisfied. Paramount has already shown it will trade assets to keep the European clock moving. Whether the same instinct gets the deal past London and past a courtroom in the fall is a question this week’s filing does not answer.
