Netflix co-CEOs Ted Sarandos and Greg Peters laid out their case for acquiring Warner Bros. Discovery — attempting to calm nerves in Hollywood even as they face a hostile rival bid from Paramount Skydance.
In a letter to employees, the two bosses moved to ease fears over job cuts and concerns that the deal will eventually lead to the end of theatrical releases. In the past, Sarandos described going to the cinema as an “outdated” experience.
“We haven’t prioritized theatrical in the past because that wasn’t our business at Netflix,” the co-CEOs wrote on Monday. “When this deal closes, we will be in that business.”
The execs also promised “no overlap or studio closures” amid concerns that the mega-deal would lead to job cuts in an industry already squeezed by the rise of streaming platforms and artificial intelligence.
“This deal is about growth,” the duo wrote. “We’re strengthening one of Hollywood’s most iconic studios, supporting jobs, and ensuring a healthy future for film and TV production.”
Netflix is trying to close its $72 billion deal that includes HBO, HBO Max and Warner Bros Studios, after Paramount made a hostile bid on Dec. 8 for the entire Warner Bros Discovery, which is also home to a slew of cable channels such as CNN, Food Network, TLC and TNT.
The Paramount offer, which values the entire company at approximately $78 billion with an all-cash offer of $30 a share, would give shareholders a higher immediate payout.
But Netflix says it’s confident of its deal, which amounts to $27.75 a share for the streaming and studio assets, which it made on Dec. 5, arguing that WBD shareholders will eventually get more than $30 a share when the company’s cable assets are spun off.
“It was entirely expected,” the CEOs said of the Paramount offer. “But, we have a solid deal in place.”
One concern that has been raised is whether regulators will greenlight the deal given the fact that Netflix would own the No. 1 and No. 3 streamers.
But the CEOs pointed to viewership numbers from Nielsen that suggest a Netflix-Warner Bros. tie-up would have a “smaller view share percentage” than YouTube or a potential Paramount and Warner Bros. combination.
Last week, US Sen. Elizabeth Warren (D-Mass.) slammed both deals, calling Paramount’s offer a “five-alarm antitrust fire.”
She had previously dubbed Netflix’s bid an “anti-monopoly nightmare.”
If the Netflix deal is approved, the world’s largest streamer will take over one of Hollywood’s oldest and most storied studios — home to “Casablanca,” “The Wizard of Oz” and the “Harry Potter” and “Lord of the Rings” franchises — in one of the biggest-ever media deals.
It would also gain control of its one-time inspiration, HBO, which is considered by Hollywood as the gold standard for television with hits such as “The Sopranos,” “Game of Thrones” and “Curb Your Enthusiasm.”
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