UK regulator launches probe into BT and Warner Bros merger

The UK’s Competitions and Markets Authority is investigating the proposed joint venture between BT and Warner Bros Discovery, which would to merge their sports content into a new entity.

The deal was announced last month, and would involve BT Sport, which includes Premier League football coverage, and Warner Bros Discovery owned Eurosport UK being brought under a single identity at some undisclosed point in the future.

In terms of how much the deal is worth, the initial announcement stated that BT will receive £93 million from Warner Bros Discovery (payable in instalments over the three years following transaction completion) and up to a £540 million by way of an earn-out from the JV during the earn-out period, subject to certain conditions being met.

The Competitions and Markets Authority’s investigation is in phase one which involves inviting comments on the transaction from any interested party. The deadline for a phase 1 decision has been set at July 28^th. The CMA statement reads.

The Competition and Markets Authority (CMA) is considering whether it is or may be the case that this transaction if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.

BT revealed back in February that it was holding exclusive talks with Warner Bros Discovery with a view to creating a 50:50 sports broadcasting joint venture, following  rumours that it was planning to exit sports. As we pointed out at the time of the official announcement, BT could well use the JV to fully exit the sports business – but for now the trajectory of the merger is in the hands of the regulators.

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