Paramount Seeks Warner Deal Approval from UK Regulators While Urging Ministers to Change Tax Breaks
Paramount’s Dual Requests to UK Authorities: Merger Approval and Tax Reform
Paramount is urging British authorities to approve the mega-merger with Warner Bros. Discovery while calling for reduced tax break thresholds in the UK. These requests were highlighted by Paul Testar, a drama commissioner for Paramount-owned Channel 5, during the Creative Cities Convention held in Liverpool on Wednesday.
At the convention, Testar emphasized the need for reform in high-end TV tax incentives. Channel 5 has significantly increased its commitment to drama programming, expanding from 12 hours of commissioned content in 2019 to an anticipated 100 hours by 2026. However, many of these productions are being filmed overseas, in countries like Malta and Lithuania, where tax incentives are more favorable than those available in the UK.
Testar remarked that lowering the tax break threshold—which currently grants around 25% for shows exceeding £1 million ($1.36 million) per hour—could potentially bring “tens of millions of business” back to the UK. He suggested a reduction of the threshold to £500,000 to stimulate local production.
This initiative aligns with Channel 5’s strategy to expand its drama offerings, including the Yorkshire-produced hit All Creatures Great and Small. Testar noted the increasing challenges in the drama production landscape, yet expressed optimism about the network’s ability to grow each year.
Testar’s comments reflect a broader consensus within the British scripted community regarding the need for tax incentives. However, the UK government has yet to respond favorably to these industry appeals. The recent 2025 budget offered no accommodations related to the requested tax credits.
Meanwhile, Paramount remains vigilant regarding the UK’s handling of its $110 billion merger with Warner Bros. Discovery. Last month, the Competition and Markets Authority reached out for feedback from affected parties—a preliminary step in assessing a deal that is poised to reshape the global media landscape.
In a sign of commitment to European markets, Paramount Skydance CEO David Ellison visited the UK earlier this year as part of a strategy to engage European regulators. During his visit, he met with UK Culture Secretary Lisa Nandy and various influential European creatives.
