Netflix CEOs defend Warner Bros deal: What they say on Paramount bid, job loss fears, theatrical release and more

Streaming giant Netflix's two chief executive officers have shared reasons for acquiring Warner Bros Discovery, after Paramount Skydance Corp went public with a competing offer, according to a report by Bloomberg.

On 5 December, Netflix said that it agreed to pay $82.7 billion, including debt, for Warner Bros. Three days after the offer, Paramount responded with a bid for the entire company, including some units such as cable news, that Netflix does not plan to acquire. The competing bid valued the studio at $108.4 billion.

In a letter to employees on Monday, 15 December, Greg Peters and Ted Sarandos addressed industry concerns about job losses and the end of theatrical releases.

Issue of theatrical releases

The executives assured that they were committed to releasing Warner Bros movies in theatres amid allegations that Netflix would prioritise a streaming-first model. Sarandos had earlier called going to the theatre an “outdated” experience.

“We haven’t prioritised theatrical in the past because that wasn’t our business at Netflix,” the report quoted the co-CEOs' statement. “When this deal closes, we will be in that business.”

Aim to boost jobs

They also pledged that there would be “no overlap or studio closures,” addressing concerns that the mega-deal could lead to job reductions in an industry already affected by the growth of streaming platforms and artificial intelligence.

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

On Paramount's offer

The report further said that Netflix CEOs are working to finalise their deal after Paramount submitted a hostile bid for Warner Bros, which covers the entire company and offers shareholders a higher payout. However, they remain confident in the $82.7 billion agreement.

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

Concern of regulatory approval

Concerns were also raised regarding regulatory approval for any potential deal, the report said. Peters and Sarandos cited Nielsen data indicating that a Netflix-Warner Bros partnership would have a smaller viewer share compared to YouTube or a possible Paramount-Warner Bros partnership.

“We’re confident we’ll get the approvals we need to make it happen,” the Netflix leaders wrote. “The fundamentals are clear: this deal is pro-consumer, pro-innovation, pro-worker, pro-creator, and pro-growth.”

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

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