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Netflix CEO argues Warner Bros acquisition drives expansion
Netflix co-chief executive Ted Sarandos has defended the streaming giant's $82.7 billion bid for Warner Bros, calling it a strategic growth opportunity rather than a political maneuver. In an interview with the BBC's Today programme, Sarandos emphasized that the deal would expand Netflix's footprint in the entertainment industry by adding assets the company currently lacks.
Competing bids and industry impact
Warner Bros had initially agreed to Netflix's offer last December, which targets its studio and streaming networks-including HBO Max, Warner Bros, and New Line Cinema-while spinning off the remainder of the company. However, Paramount later tabled a rival bid of $108.4 billion for the entire Warner Bros conglomerate, including its traditional pay-TV networks, which are widely viewed as a declining segment.
Sarandos dismissed Paramount's approach as disruptive, arguing that its plan to cut $22 billion from Warner Bros' operations would shrink the industry. "There are five major studios left in Hollywood. If the Paramount deal goes through, it would be four, because they're collapsing two studios into one," he said. Paramount, which has declined to comment, previously stated its offer provides shareholders with greater certainty and includes a commitment to cover Warner Bros' $2.8 billion break-up fee if the Netflix deal collapses.
Growth vs. consolidation
Highlighting Netflix's expansion strategy, Sarandos pointed to the company's investment in the UK, where it has created 50,000 jobs and spent $6 billion on original programming since 2020. "Our deal is about growth," he said. "We've been growing this business consistently since we started."
In contrast, he claimed Paramount's bid would involve immediate cuts of $6 billion, followed by an additional $16 billion in reductions. "This industry would be much smaller under that ownership," Sarandos added.
Political pressure and industry criticism
Sarandos also addressed threats from former U.S. President Donald Trump, who warned Netflix would "face the consequences" if it did not remove Democratic board member Susan Rice. "This is a business deal, not a political deal," Sarandos responded. "He [Trump] likes to do a lot of things on social media."
The Netflix chief further rebuffed criticism from filmmaker James Cameron, who wrote to U.S. competition regulators warning that the deal would be "disastrous" for cinemas. Sarandos called Cameron's stance "disingenuous," noting that the average Netflix subscriber watches seven movies per month, while the average American visits cinemas just twice a year. "I don't see us as direct competitors to the big screen," he said. "When people watch a great film at the cinema, they want to watch more films when they get home."
Next steps and deadlines
Warner Bros has set a deadline of the end of Monday for Paramount to submit its "best and final" offer ahead of a shareholder vote on the Netflix deal next month. Sarandos declined to speculate on whether Netflix would raise its bid if Paramount increased its offer, but described the current proposal as "a spectacular opportunity at a price."
