UK Regulator Launches Probe Of Proposed Warner Bros Discovery-BT Sports Joint Venture

The UK’s Competition and Markets Authority is investigating the proposed joint venture between Warner Bros Discovery and BT Group which will create a new premium sports offering for the UK and Ireland. The regulator said today that it notified the respective parties on Tuesday and is inviting comments on the transaction until June 17.

During the probe, whose Phase 1 decision deadline is July 28, the CMA will consider whether the transaction 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.”

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Plans for the 50-50 joint venture were confirmed in early May and will see the transfer of the operating businesses of BT Sport to Warner Bros Discovery, effectively merging the content offering of both BT Sport and Eurosport UK.

The JV’s portfolio of premium sports rights will include UEFA’s Champions League and Europa League, Premier League matches, Premiership Rugby, UFC, the Olympic Games, tennis Grand Slams the Australian Open and Roland-Garros, cycling Grand Tours including the Tour de France and Giro d’Italia, and the winter sports World Cup season.

In May, the companies said Warner Bros Discovery and BT will each directly contribute, sub-license or deliver the benefit of their respective sports rights and distribution agreements for the UK and Ireland to the JV.

BT will receive £93M ($113.6M) from Warner Bros Discovery and up to approximately £540M ($659.3M) by way of an earn-out from the JV, subject to certain conditions being met. BT will retain a 50% interest in the JV, and Warner Bros Discovery will be granted a call option over BT’s interest in the venture.

The deal is subject to customary closing conditions, including approvals by the relevant regulatory bodies and is expected to complete by the end of 2022.

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