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Since Netflix’s announcement with Warner Bros. Discovery that it will acquire studio and streaming propertiesThat includes the movie and TV divisions, plus HBO and HBO MaxThere have been many twists and turns in the story. However, this week will be one of the most important weeks ever Warner Bros. is going back to the negotiating table with Paramount To get their best and final offer. However, Netflix isn’t done yet, and Ted Sarandos has made plans and pitched his take on The Town with Matthew Belloni, and it’s all about charming aggression. We’ll cover what was said, as well as some additional thoughts, below.
More to the point, in a fiery new interview joker show that was the dc hearingNetflix co-CEO Ted Sarandos defended the company’s bid for Warner Bros. Discovery, calling rival Paramount’s offer “risky” and promising to keep movies in theaters. Sarandos described the rival Paramount bid as a “leveraged buyout” that would cut billions, while hailing the Netflix acquisition as a growth engine for the industry.
One of the biggest concerns about Paramount’s integration was how it would play out, suggesting that most of the properties under Netflix would remain independent and additive. While Paramount has Savings of at least $6 billion acknowledged Sarandos estimates this figure to be much higher, suggesting it could reach $16 billion for a leveraged deal to come to fruition.
deal status
Despite believing that the deal was “tailored” in December, Netflix is still not in line with Paramount, has initiated a hostile bid Teathe hat is still there Solved.
- Netflix offer: $27.75 per share (all cash) for the studio and HBO, with WBD shareholders retaining “Discovery Global” (the remaining TV unit).
- Paramount/Ellison Offer: Reportedly $30 per share for the entire company, with rumors it could go as high as $31, and some even suggesting it could go above $35.
When asked why Netflix agreed to this seven-day extension, Sarandos claimed that it was not out of weakness, but to provide clarity against “misinformation” coming from the Paramount camp. “This is giving Warner Bros. Discovery shareholders exactly what they deserve, which is clarity,” Sarandos said. He said Paramount is “flooding the field with misinformation about the deal… It seems like there’s a lot of whining going on.”
Why does Netflix want Warner Bros.? According to Sarandos, this is not so much a necessity as a want, “We think it’s an accelerator to an already successful business model.”
Continuing, “This ensures our continued growth with Netflix into the next century. This is a combination of their IP. we are on it [Original programming] For almost a decade. They have been doing this for almost a century. So I think putting those properties together and putting them to work will create more jobs, more series, more movies.”
The “HBO” brand will remain exclusive and why this deal works as a merger
For fans of prestige TV, Sarandos offered some relief with respect to HBO. He talked about the decision to merge HBO into “Max” and suggested he would return the brand to its premium roots.
“I think one of the challenges they’ve faced over the last few years is trying to be a general entertainment brand, which they really are not,” Sarandos said, expressing a desire to simplify the branding to just HBO. He also rejected the idea that Netflix would cut HBO’s marketing budget, saying he would like HBO to operate “largely like it does today” and continue to compete against Netflix for projects.
What about the future of HBO Max? No word on what exactly the plans are.
Sarandos characterized Netflix as a service defined by “high engagement, low churn” – a daily utility that customers rarely cancel. In contrast, he described HBO Max and just HBO as having a “low engagement, high churn” model, a model driven by niche “event” programming where subscribers sign up for a hit show and often leave after it ends. By combining these properties, Sarandos argued that Netflix could stabilize HBO’s fluctuating subscriber base, providing a permanent home where prestige content could find consistent, daily engagement between seasons. Overall, executives from both Netflix and Warner reiterated that 80% of HBO’s subscribers already have a Netflix subscription, suggesting that the merger will unify the viewing experience for a shared audience rather than reduce consumer choice. Whether this means they will operate separately indefinitely or merge into one is unclear.
Warner Bros. movies to have 45-day, more PVOD windows
One of the biggest fears regarding Warner Bros.’ Netflix acquisition is the potential death of the theatrical window. Netflix has historically favored putting movies directly on streaming. However, Sarandos made his strongest commitment to maintaining the traditional film model. Sarandos confirmed that if the deal closes, Netflix will honor the traditional 45-day theatrical window for Warner Bros. films. This is in addition to committing to strong marketing campaigns.
“We’re buying a business model, and we’re going to continue to invest in it and grow it, not kill it,” Sarandos told Belloni. They outlined a strategy that includes 45 days in theaters, followed by a PVOD (transactional) window, before landing on Max/Netflix. He added, “If we’re going to be in the theatrical business, we want to win.”
However, when pressed, Sarandos admitted that he would not put this commitment in writing as a condition of the deal, arguing that no legal remedy was necessary because Netflix does not present a “concentration risk” in the theatrical market.
our take
Anyone who can tell you what’s going to happen in the next week or so doesn’t really know; The final decision is made with a handful of people, then goes to the shareholders next month on March 20, and then a long march to completion. While Ted certainly made some good arguments about Warner Bros.’ Under its banner in the future, most of them amount to emotional arguments, given that hard, cold cash will almost certainly be the deciding factor in the outcome. Unfortunate, but that’s the way of the world. Paramount’s pockets (or, more relevantly, Larry Ellison’s) are deep, and at some point, Netflix would be foolish to pursue a deal that’s wildly more valuable than it already is.
Like many, the best option here isn’t on the table: Warner Bros. Discovery remains independent. But increasingly, for a variety of reasons, including some political ones, there is a growing consensus that Netflix is the best home for these assets, especially given the level of cuts envisioned by Paramount, if Sarandos’ numbers are accurate.
Getting some minor clarity on HBO’s future would ease some minds, such as theatrical and PVOD window commitments, even if they aren’t as written. It’s unclear what will happen to HBO Max in the long term. The only comparison we really have in this area is Disney+ and Hulu, with an asterisk because Hulu has no significant presence outside the US. Still, Hulu and D+ are slowly merging into a unified platform, and that would seem to be the blueprint here.
The biggest concern, for me at least, is that Netflix has no experience with acquisitions of this scale, and what it has done in the past have been modest successes, if not outright failures. The two game studios it purchased have either closed (Boss Fight) or been sold back to the owners (Spree Fox). The Millarworld acquisition is one of the oldest and has resulted in the release of some very poor film and TV titles, and despite the promise of over a dozen upcoming projects, most are now on hold or canceled altogether. Then again, when Netflix has explored new genres and content types or businesses, it’s often been a mess (like games in the 2020s and animation in the late 2010s, arguably – the verdict is in on sports and podcasts), where they’ve invested a bunch with boundless optimism only to later rethink and restructure, which has meant canceled projects and a general pullback when the data and “experiments” don’t go as originally planned. Are there.
If left to its own devices, Warner Bros. could thrive under Netflix. However, if it’s like some of their prior expansions, it could be a slow-motion car crash.
What do you think – will Warner Bros. have a brighter future under Paramount or Netflix? Let us know in the comments.