Netflix’s Sarandos Defends Warner Bros. Acquisition Amid Paramount Bid

Netflix co-CEO Ted Sarandos is aggressively defending the streaming giant’s proposed $83 billion acquisition of Warner Bros. Discovery (WBD) as a rival bid from Paramount Skydance intensifies, assuring stakeholders that a Netflix takeover will bolster, not dismantle, the traditional theatrical model.

Theatrical Window Commitment

Sarandos has repeatedly emphasized Netflix’s commitment to maintaining a 45-day theatrical window for WBD films, including upcoming DC sequels like those for “Superman” and “The Batman,” slated for release in 2027. Unlike some studios that have shortened theatrical runs, Netflix plans to follow up with a premium video-on-demand (PVOD) release before making films available on its streaming platform, HBO Max.

“The core thing is that it will feel traditional in how long it is in theaters and how long it takes to obtain to HBO Max,” Sarandos stated in a recent interview on “The Town With Matthew Belloni.”

The PVOD Strategy

This strategy mirrors that of other studios, like Universal, which utilize PVOD to cater to a different customer base than theatrical or streaming audiences. PVOD allows studios to reach cost-conscious families who may not be able to afford a full theatrical experience while still generating revenue from each film view, unlike the subscription-based model of streaming.

Concerns from Theater Chains

Theater chains have consistently argued that longer theatrical windows are crucial for maximizing profits for both themselves and studios. They fear that shortening these windows will disincentivize audiences from purchasing movie tickets or renting films on home platforms.

Sarandos’ Shifting Stance

While Sarandos has previously expressed concerns about the consumer-friendliness of current theatrical windows, he has since asserted that sustaining the theatrical infrastructure is vital to realizing the full value of the nearly $83 billion deal. “We’re buying a business model and we’re going to invest in it and grow it, not kill it,” he explained.

The Paramount Skydance Challenge

Sarandos’ comments come as WBD is re-engaging in negotiations with Paramount Skydance, which has presented a $108.4 billion bid – valuing WBD at $30 per share in cash – for the entire company. Paramount has until February 23 to submit a final offer, and WBD shareholders will vote on the Netflix acquisition on March 20.

Netflix’s Response to Paramount’s Bid

Sarandos accused Paramount of “flooding the zone with confusion for shareholders” by making multiple offers directly to shareholders and bypassing the WBD board. Netflix granted WBD a seven-day window to negotiate with Paramount, stating they were willing to “let them create a move” and provide shareholders with “complete clarity and certainty.”

Looking Ahead

The outcome of this bidding war will significantly shape the future of the media landscape. The next few weeks will be critical as WBD shareholders weigh the competing offers and regulators scrutinize the potential merger.