Netflix CEOs Justify Warner Bros. Deal in Employee Memo
Ted Sarandos and Greg Peters, co-CEOs of Netflix, recently reassured staff regarding the company’s strategic acquisition of Warner Bros. and HBO Max. In a memo, they expressed confidence that the deal, valued at $82.7 billion, would overcome challenges posed by a competing bid from Paramount Skydance.
Details of the Warner Bros. Acquisition
Netflix announced the acquisition on December 5. This megadeal includes Warner Bros. studios, HBO, and HBO Max. Just three days later, Paramount Skydance, led by David Ellison, made a hostile offer of $30 per share for Warner Bros. Discovery, valuing that deal at approximately $108.4 billion.
In their memo, Sarandos and Peters reaffirmed Netflix’s commitment to this acquisition, stating it is a favorable move for shareholders and consumers. They emphasized that the deal would foster job creation within the entertainment industry.
Response to Industry Concerns
The co-CEOs directly addressed concerns within the industry, particularly regarding the survival of Hollywood. Sarandos and Peters highlighted that this merger would enhance, not hinder, the entertainment landscape. They remarked that Warner Bros. complements Netflix’s existing offerings without creating redundancies.
- Warner Bros. will strengthen Hollywood’s iconic studios.
- The acquisition is designed to support jobs and ensure future growth.
- Both studios aim to maintain theatrical releases for films.
They noted that hits like “Minecraft” and “Superman” would have continued their theatrical premieres had the deal occurred earlier, indicating Netflix’s commitment to supporting the traditional cinema model.
Confidence in Regulatory Approval
Regarding regulatory concerns, Sarandos and Peters expressed optimism about obtaining necessary approvals. They cited the deal’s pro-consumer and pro-innovation benefits. Importantly, they mentioned that even after the merger, Netflix’s market share would increase modestly from 8% to 9%, remaining competitive behind platforms like YouTube and the potential combined entity of Paramount and Warner Bros. Discovery.
Looking Ahead
As the acquisition progresses, Netflix is focused on its long-term ambitions for 2026 and beyond. Sarandos and Peters are optimistic about growth potential, emphasizing a need to concentrate on delivering value to subscribers amid industry speculation.
The memo culminates with an invitation for employees to stay informed via Netflix’s internal communication platform, Take 5. The platform serves to clarify strategic decisions and important updates for staff.
