The Brussels-based International Union of Cinemas (UNIC), representing exhibitors in 39 European territories, has said the European Commission’s conditions for its recent approval of Paramount’s takeover of Warner Bros. Discovery should have gone further.
The body was reacting to the EC’s announcement Wednesday that it had approved Paramount Skydance’s proposed acquisition of Warner Bros. Discovery (WBD) on the condition that divests its stake in United International Pictures (UIP), the film distribution venture it currently jointly owns with Universal Pictures.
“UNIC welcomes the Commission’s decision to require the divestment of Paramount’s stake in UIP and additional requirements. While it addresses an important competition concern, we strongly believe that the Commission could and should have gone further with its conditions for the merger’s approval,” said UNIC CEO Laura Houlgatte.
“Our sector raised numerous concerns with its competition department about the proposed deal, and the Commission’s findings don’t reflect that bigger picture. It has based its decision on too narrow a scope.”
Beyond the divestment of its UIP stake, the EC ruling also stipulated that for a period of ten years, Paramount cannot directly or indirectly enter into any agreement or understanding with Universal to jointly co-distribute films in the European Economic Area (EEA), or shift the distribution of Warner films from Warner’s existing distributor to the theatrical distributor used by Paramount, where that distributor also distributes Universal’s or Disney’s films in all UIP countries in the EEA.
Additionally, in the UIP countries in the EEA where Paramount and Universal do not share the same distributor, it will not be allowed to shift the distribution of Paramount’s films from Paramount’s existing distributor to the theatrical distributor used by Warner, where that distributor also distributes Universal’s or Disney’s films.
The countries covered by the conditions span Bulgaria, Croatia, Czechia, Cyprus, Denmark, Estonia, Finland, Greece, Hungary, Iceland, Latvia, Lithuania, Norway, Poland, Portugal, Romania, Slovakia, Slovenia and Sweden.
UNIC said the stipulations should have gone beyond the EEA territories where UIP currently operates, while the ruling also failed to address other issues such as theatrical windows and access to back catalogues.
“We regret that the decision does not address similar risks arising from theatrical distribution arrangements outside the UIP territories, nor does it extend to remedies addressing theatrical windows, film diversity, preservation of film output and production pipelines, contractual practices and access to back catalogues,” said Houlgatte.
“Given that the transaction continues to face legal challenges based on such factors in the United States, it is clear that these broader concerns about the merger remain unresolved and unanswered. UNIC will keep a close eye on developments in the US and any potential consequences for Europe.”
Houlgatte added that UNIC was also disappointed that the European Media Board, an independent advisory body, had not examined the wider implications of the transaction for media pluralism, cultural diversity and the audiovisual market.
