Netflix CEOs make their case for Warner Bros acquisition

LOS ANGELES – The two chief executive officers of Netflix Inc laid out the company’s case for

acquiring Warner Bros Discovery Inc

, after rival Paramount Skydance Corp went public with a competing, hostile offer.

Mr Greg Peters and Mr Ted Sarandos moved to quell industry concerns about job losses and the end of theatre releases in a letter to employees on Dec 15.

The executives said they were committed to releasing Warner Bros movies in theatres, following concerns that Netflix would prioritise a streaming-first model.

Mr Sarandos has previously described going to the cinema as an “outdated” experience.

“We haven’t prioritised theatrical in the past because that wasn’t our business at Netflix,” the co-CEOs wrote on Dec 15. “When this deal closes, we will be in that business.”

They also promised “no overlap or studio closures” amid concerns the mega-deal would curtail jobs in an industry already impacted by the rise of streaming platforms and artificial intelligence.

“This deal is about growth,” the pair wrote. “We’re strengthening one of Hollywood’s most iconic studios, supporting jobs, and ensuring a healthy future for film and TV production.”

The Netflix CEOs are trying to close their deal after

Paramount made a hostile offer

for Warner Bros that is for the entire company and gives shareholders a higher payout.

Still, they said they are confident of the US$82.7 billion (S$106.6 billion) agreement. 

“It was entirely expected,” they said of the Paramount offer. “But, we have a solid deal in place.” 

One concern for Netflix is

whether regulators will approve any deal

.

Mr Peters and Mr Sarandos pointed to view share data from Nielson that suggests a Netflix-Warner Bros combination would have a smaller view share percentage than YouTube or a potential Paramount and Warner Bros tie-up. 

Democratic Senator Elizabeth Warren of Massachusetts called Paramount’s offer a “five-alarm antitrust fire”. She had previously branded Netflix’s bid as an “anti-monopoly nightmare”.

Netflix said it agreed to pay US$82.7 billion, including debt, for Warner Bros on Dec 5. 

Paramount responded on Dec 8 by launching a hostile tender offer for the entire company, including some business units, like cable news, that Netflix is not planning to acquire.

That deal valued the studio at US$108.4 billion.

If the deal is approved, Netflix will take over one of Hollywood’s oldest and most storied studios in one of the biggest ever media deals. It would also gain control of its one-time inspiration, HBO. BLOOMBERG