Why did Netflix abandon the acquisition of Warner Bros.? CEO explains in first interview: a plan was in place long ago

Netflix CEO Ted Sarandos

Phoenix Tech News, March 2 — According to Bloomberg, Netflix announced on February 26 that it would withdraw from the bidding for Warner Bros. Discovery, surprising many in Hollywood. Netflix Co-CEO Ted Sarandos explained that the company had prepared various contingency plans in advance and knew what to do once Paramount increased its bid.

In December last year, Netflix agreed to acquire Warner Bros.'s film studio business and HBO Max streaming service. Sarandos appeared multiple times in the media and attended meetings to discuss the deal, including a meeting at the White House.

After abandoning the Warner Bros. acquisition, Sarandos gave his first interview. He told Bloomberg that the decision to withdraw from the bidding was actually made earlier, based on various pre-planned bidding strategies.

“When we received the notification on Thursday that they had made a higher bid and provided details of the deal, we knew immediately what to do. We were fully aware of the next steps,” Sarandos said.

He pointed out that Paramount’s bidding rivals are borrowing hundreds of billions of dollars to acquire a company much larger than themselves. This debt will force Paramount CEO David Ellison to cut $16 billion in costs and lay off thousands of employees.

“This means reduced production output and fewer jobs,” he stated.

Netflix’s acquisition proposal sparked strong opposition from Hollywood unions, politicians, and entertainment figures like director James Cameron, partly because the company has historically shown little support for theaters. However, Sarandos said that recent negotiations with film distributors could lead to more Netflix films being released in theaters.

“I believe we will work together on many exciting collaborations in the future,” he said.

Despite reports from Bloomberg and other media that the U.S. Department of Justice is conducting a broad review of Netflix’s business practices, Sarandos stated that the investigation has concluded, “We’re all clear now.” (Author: Xiao Yu)