Paramount Sacrificed Some Cinema History To Win Approval For Its Warner Deal, But Will It Be Enough To Safeguard Europe’s Theatrical Business?

“Cinema may have peaked,” was how United International Pictures sales manager Kenneth Jønsson greeted the arrival of The Odyssey in Norway. “Trust me, this is one for the ages, and a huge reminder of how lucky we are to work with films and filmmakers like this.” Jønsson posted his love letter to Christopher Nolan’s epic on LinkedIn just before the movie’s premiere. A couple of weeks on, there are very real questions about the future of United International Pictures (UIP) and whether it will continue to serve the filmmakers Jønsson admires. That’s because Paramount has agreed to exit UIP, its 50-50 joint venture with Universal Pictures, to secure regulatory approval for its takeover of Warner Bros. Discovery in the European Union. In remedies laid down by the European Commission, the EU’s antitrust enforcer, Paramount will need to unwind its links to UIP within 13 months of closing the Warner merger, walking away from a company that has been part of the European cinema landscape for 44 years. Watch on Deadline Paramount declined to comment on how it will disentangle itself from UIP or whether the venture will continue without its stewardship. Universal Pictures also declined to comment on the European Commission ruling last week. UIP did not respond to a request for comment. UIP distributed ‘The Odyssey’ Melinda Sue Gordon/Universal So here’s what we know: Paramount will terminate its 50% stake in UIP, meaning it will have to seek alternative distribution arrangements in the 100 territories in which UIP has a presence. Paramount may be able to tap into Warner Bros. Pictures operations in some of these locations or piggyback on Warner’s existing partnerships, but only if the partner has no role in distributing Universal or Disney films. Warner has a distribution deal with SF Studios in the Nordics, for example, but if Paramount wanted to switch its UIP films into this agreement, it would need to establish that SF Studios has no similar arrangements with Universal and Disney. This would ensure Paramount does not fall foul of European Commission conditions. Whatever the outcome, UIP will have significantly fewer titles to handle, which will inevitably create uncertainty for the company’s 200 employees (even if it does distribute some non-Paramount-Universal titles, such as Lionsgate’s Michael). Headquartered in Chiswick, a leafy suburb of west London, UIP does not have a CEO, though former STX Entertainment executive Rhiannon Harries serves as chief operating officer and appears to be one of the company’s most senior figures. Paramount and Universal lawyers act as directors of UIP’s British operations. UIP posted sales of nearly £198M ($263M) in 2024, per its most recent accounts filed at the UK’s Companies House. It recorded a pre-tax profit of £12.2M. In its pomp, UIP boasted box office takings of $2.5 billion, but was much diminished in 2007, when Paramount and Universal took direct control of distribution in key markets, including France, Brazil, and Italy. Stewart Till, the British executive who ran UIP for four years until 2006, said Paramount’s exit would be the end of an era for a company that combined the “best of Hollywood with local decision makers.” He said the exit was “not irrelevant” for Paramount given that it will have to make alternative arrangements in UIP territories. “It’s not a coincidence that Paramount hasn’t done that since 2007,” he said. There is a feeling, however, that divesting from UIP is a small concession for Paramount to make in the context of an industry-reshaping $111B union with Warner Bros. A well-placed industry executive said: “I can’t see it making any difference, to be honest. The pieces will just move around between even fewer players, meaning even less competition. Maybe there needs to be further regulation introduced so that no single local distribution company has dominant market share, and other ways to stimulate competition and innovation.” The International Union of Cinemas (UNIC), which represents cinema operators across 39 European territories, agrees. Laura Houlgatte, UNIC’s chief executive, told Deadline: “While the remedy addresses an important structural issue, it does not tackle similar risks that arise from theatrical distribution arrangements outside the UIP territories, nor does the Commission decision address a number of wider concerns that UNIC raised throughout the review.” UIP re-released ‘Top Gun’ and ‘Top Gun: Maverick’ in cinemas earlier this year Paramount During the European Commission’s investigation process, Houlgatte said the UNIC advocated for “safeguards around theatrical exclusivity and release windows, as well as measures to help maintain a strong and diverse pipeline of films for cinemas and audiences.” Paramount CEO David Ellison has attempted to assuage these concerns with commitments to release more than 30 cinema films a year and hold to a minimum theatrical window of 45 days. He will continue making this case while the merger is on ice as Paramount fights a lawsuit from 12 U.S. state attorneys general, who argue the deal stifles competition for theatrical film distribution. The Balanced Economy Project, an apolitical UK non-profit that lobbies against monopolies, is not convinced. It said the European Commission’s UIP remedy “does nothing obvious about the future bargaining power of a combined Paramount-Warner studio.” The Balanced Economy Project added: “Cinemas would still face one fewer independent major studio. Broadcasters and platforms would still face a larger owner of premium rights. Producers and creative suppliers would still face another reduction in major routes to market.” Paramount breaking bonds with Universal signals the end of some European cinema history, but discovering whether it’s enough to safeguard a precarious business from a new monolith will be its own odyssey of sorts. Andreas Wiseman contributed to this story