EXCLUSIVE: Paramount’s $110 billion acquisition of Warner Bros. Discovery (WBD) is expected to create complications for its SkyShowtime partnership with Comcast, Deadline can reveal.

Industry sources said Paramount’s proposed ownership of HBO Max will likely put the David Ellison-run company in breach of its joint venture agreement for SkyShowtime, a streaming service available in 22 European markets, boasting more than 9 million subscribers, per insiders.

SkyShowtime and Paramount declined to comment. Comcast did not respond to a request for comment.

Deadline understands that the 50-50 pact between Paramount and Comcast means they do not compete with SkyShowtime in the territories where the streamer is available. 

Paramount+ is accessible in seven European markets, but there is no overlap with SkyShowtime. Indeed, Paramount+ withdrew from Sweden, Norway, Denmark, and Finland in 2022 to make way for SkyShowtime. Comcast has not rolled out Peacock internationally, and SkyShowtime is not available in the UK, where the company owns Sky.

Paramount absorbing HBO Max would significantly change this dynamic. HBO Max operates in 21 of SkyShowtime’s 22 markets, including key territories such as Spain and the Nordics. Ellison has signalled that he intends to combine Paramount+ and HBO Max. “That would go against the whole joint venture thing,” said a well-placed person.

Sources close to SkyShowtime said Paramount’s WBD deal had created palpable uncertainty among employees, leading to speculation about how the mega-merger will affect SkyShowtime’s shareholder structure. 

Change is anticipated, with sources suggesting that it would make sense for Paramount to take over the SkyShowtime arrangement, or at least become the dominant partner. Comcast co-CEO Mike Cavanagh indicated as recently as March that the company was focused on its U.S. streaming strategy.

“A scenario in which Paramount assumes full control of the [SkyShowtime] platform and integrates it into its operations in EMEA is increasingly viewed as a likely strategic outcome,” said a source familiar with the thinking.

Paramount is currently seeking regulatory approval for the WBD deal and has said that it expects the acquisition to close in the third quarter of this year. 

Deadline revealed last year that Paramount and Comcast have invested at least $1 billion into SkyShowtime since its launch, but sources said they do get a return on their investment because the streamer buys their content and generates subscription and ad revenue. 

SkyShowtime is stocked with series like Sky Studios’ The Day of the Jackal and Taylor Sheridan’s Yellowstone, which has been a driver of subscriptions. It also hosts originals, such as Swedish drama Where the Sun Always Shines, which recently cast Game of Thrones star Kristofer Hivju. The streamer made an operating loss of €543.7M ($632M) in 2024, which was 3% down on 2023, when its losses stood at €561.9M.

SkyShowtime is based out of Sky’s campus on the outskirts of central London, but brought together its 300 employees for an all-hands offsite meeting in Budapest in January. Those present said CEO Monty Sarhan was in an ebullient mood, high-fiving employees, talking up the company’s performance, and committing to a new set of leadership pledges. 

According to a copy of the commitments seen by Deadline, they included the pledge: “Try to maintain a positive and optimistic outlook, even in the face of challenges. Things are never as good – or as bad – as we think they are.”

Sources said this has not been straightforward amid shareholder uncertainty, and that some internal employee mood metrics have been below benchmarks. SkyShowtime’s position is that employee feedback after the Budapest gathering was “overwhelmingly positive.”

A Paramount spokesperson said: “SkyShowtime continues to operate under its established joint venture agreement. We don’t comment on speculation about contractual matters between shareholders.”