Netflix co-CEO Ted Sarandos defends decision to walk away from Warner Bros. Discovery bid

• Netflix walked away by choice, not political pressure.
• Sarandos says discipline, not defeat, drove the decision.
• Paramount’s $111bn financing move was “unprecedented.”
• Tens of billions in borrowing could trigger more than $16bn in cuts.

Netflix co-chief executive Ted Sarandos has defended the company’s decision to walk away from its proposed acquisition of Warner Bros. Discovery, insisting it acted with discipline rather than being forced out by politics or regulators.

In an interview with Bloomberg following Netflix’s withdrawal from the bidding process, Sarandos said the company had predetermined a strict price ceiling and chose not to match a higher offer from rival Paramount Skydance.

“We had a very tight range that we’d be willing to pay and made that offer back when we closed this deal," said Sarandos. “We hadn’t moved much from that, except for moving to cash, which served to move the deal faster. I’m happy where we got in and happy where we got out.

“We knew right away, when we got the notice on Thursday that they had a superior offer and the details of that deal. We knew exactly what we were gonna do."

Financing uncertainty 

The executive described Paramount Skydance’s approach, which reportedly includes tens of billions of dollars in borrowing and a personal guarantee tied to a $111 billion deal, as unprecedented. 

“There was a lot of uncertainty in their financing," Sarandos explained. “What would they be willing to do on price? Would they close all those other issues, but not raise the price? 

“Once they did what I probably didn’t expect, which was the personal guarantee for a $111 billion deal - it’s pretty unprecedented - that was clear to us. They had taken all the other issues off the table and then they additionally raised the price."

He warned that such leverage would likely result in more than $16bn in cost cuts, leading to reduced production and significant job losses across Hollywood.

In the clear 

Despite political scrutiny in Washington and opposition from some lawmakers and industry figures, Sarandos said Netflix was on a “normal regulatory path” and remains “in the clear” following a US Justice Department review.

He dismissed speculation that the deal was a strategic ploy to drive up the price, stating Netflix had invested substantial time and resources and “definitely wanted this asset,” though it did not need it and hopes the paramount offer faces scrutiny the way the near-Netflix deal did.

“It should be highly scrutinised the way I’m glad that ours was highly scrutinised," he said. “It should be looked at with every bit of the same microscope. Remember, we were asked to go and testify. David and I both were. I came."

Looking ahead, Sarandos downplayed the likelihood of another major acquisition, reiterating that Netflix sees itself as “builders, not buyers,” and will instead continue investing organically in its core business.