Netflix co-CEO Ted Sarandos is shedding light on why the company chose not to escalate its pursuit of Warner Bros. Discovery after Paramount Skydance increased its bid.
After Netflix and WBD had previously announced an agreement to acquire Warner Bros. Pictures and HBO for $87.2 billion, Paramount continued pushing for its own deal for the company. When Paramount raised its offer last week, the assumption across the industry was that Netflix might counter. Instead, Netflix said the price was “no longer financially attractive” and exited the process.
Speaking to Bloomberg, Sarandos said Netflix never planned to chase a number outside its valuation range. “We had a very tight range that we’d be willing to pay and made that offer back when we closed this deal,” he said. “We hadn’t moved much from that, except for moving to cash, which served to move the deal faster. I’m happy where we got in and happy where we got out.”
Sarandos added that Netflix moved quickly once Paramount’s proposal became clear. “We knew right away, when we got the notice on Thursday, that they had a superior offer and the details of that deal. We knew exactly what we were gonna do.”
With Netflix stepping away, Paramount’s $111 billion deal to acquire Warner Bros. Discovery is now moving forward, pending regulatory review. Sarandos said he believes the merger should face the same level of scrutiny that Netflix’s deal did.
“It should be highly scrutinized, the way I’m glad that ours was highly scrutinized. It should be looked at with every bit of the same microscope. Remember, we were asked to go and testify. David and I both were. I came.”
Sarandos also described the brief back and forth with Paramount’s David Ellison as “Unusual, yeah, unusual, irrational, whatever words you want to use in that. It’ll be fascinating to see the next steps. I have been on the record a lot in the last two weeks talking about what I think the future looks like.”
Even so, he suggested Netflix is comfortable with where it landed. “I’m confident in our future that we’re not impacted by all that. In fact, maybe it’s to our advantage. But I hope I’m wrong for the sake of the industry,” Sarandos said, adding that Warner Bros. Pictures could potentially be back in play again down the road.
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Netflix backs out of Warner Bros. deal
