EU probes Paramount Skydance bid for Warner Bros Discovery over subsidies

Paramount Skydance Corp’s $110 billion bid for Warner Bros Discovery has run into a new regulatory choke point in Brussels, where the European Commission is examining whether Gulf sovereign wealth backing may have given the buyer an unfair advantage. The filing under the EU’s Foreign Subsidies Regulation sets a July 14 decision date, giving the deal an early deadline while leaving regulators room to deepen the review if they see signs of distortion.

The stakes reach far beyond the two companies. A merger of this size would reshape ownership across film, television and streaming, concentrating more power over what audiences can watch, what studios can charge for content and how aggressively rivals such as Netflix must spend to keep subscribers. That is why the Commission’s focus on foreign subsidies matters: the issue is not only whether the bid clears antitrust hurdles, but whether outside state-linked capital tilted the bidding process in a way European rules are meant to prevent.

The Foreign Subsidies Regulation has applied since 13 July 2023 and was built to catch financial contributions from non-EU governments that can distort competition inside the bloc. The Commission published guidance on the regime on 9 January 2026, clarifying how it weighs distortion against possible positive effects, and its first mandatory review of the law is due by July 2026. That timing makes Paramount Skydance’s filing more than a one-off test case. It is arriving just as Brussels is formalizing how it will police a relatively new but increasingly important part of its competition toolkit.

Warner Bros Discovery shareholders approved Paramount Skydance’s acquisition on April 23, 2026, after Paramount’s $31-per-share all-cash proposal was described by Warner Bros Discovery as a superior proposal in February. Reuters-linked reporting has said the deal is backed by Gulf sovereign wealth funds, with commitments totaling about $24 billion. For regulators, that financing structure is now central to the question of whether the buyer had a subsidy-backed edge that other bidders did not.

Brussels is not the only gatekeeper. Britain’s Competition and Markets Authority formally began reviewing the transaction on June 9, 2026, with an initial deadline of August 7. Reuters reporting has also said California and New York attorneys general are preparing a legal challenge, adding state-level pressure in the U.S. The result is a deal that may be commercially compelling on paper but is now boxed in by subsidy scrutiny, antitrust review and political risk on both sides of the Atlantic.