After months of speculation, it seems that Warner Bros. is now officially set to be acquired by another major entertainment conglomerate, Paramount Skydance. It was reported at the end of February that Paramount placed a high bid that satisfied board members at WB. By presenting that offer, which is reportedly worth $110 billion, Paramount exceeded the bid from Netflix, which originally appeared to be in the prime position to get WB. Now, in the aftermath of the deal, the streamer’s CEO is discussing the potential ramifications.
Netflix initially released a company statement about its decision not to place a new bid for WB and its assets. Company co-CEO Ted Sarandos didn’t immediately provide a response to the development, but he had more than a few thoughts to share this weekend. During a lengthy conversation, the exec was asked for his take on what this massive agreement (for which Paramount is borrowing money to cover) could mean for the entertainment industry at large. Sarandos responded by speaking to the economic side of the equation:
This deal is dependent on a lot of cost-cutting. We were in the books of Warner Bros., and the biggest cost centers are people in productions. There’ll be cuts in excess of $16 billion. They are telling people who lend them the money that’s gonna happen in 18 months or so. It would be less production, less people working.
Sarandos’ mention of “less people working” has been cited as a concern in the aftermath of the WB/Paramount news being announced. With the consolidation of the media companies, it’s pretty much a certainty that jobs will be cut across different divisions. Sources allege that employees for both companies are expecting a “blood bath.” A separate report even dropped claims about staffers at the Paramount-owned CBS News dropping f-bombs over the prospect of jobs being lost due to WB-held CNN being brought into the fold.
During the time that it appeared Netflix would land WB, Ted Sarandos defended his company’s plans to acquire its competitor. Sarandos – who testified during a Senate subcommittee hearing led by Utah Senator Mike Lee – was adamant about the vitality of his brand’s proposal. Sarandos also took issue with Paramount trying to “circumvent” the WB/Netflix agreement at the time and even took legal action against the streamer. When asked about that fellow “buyer,” Sarandos summed up the company as follows:
Unusual, yeah, unusual, irrational, whatever words you want to use in that. It’ll be fascinating to see the next steps. I have been on the record a lot in the last two weeks talking about what I think the future looks like. I’m confident in our future that we’re not impacted by all that. In fact, maybe it’s to our advantage. But I hope I’m wrong for the sake of the industry.
A potential Netflix deal also sparked its share of concerns amongst consumers and creatives, especially due to the prospect of the streamer possibly shortening theatrical windows for movies. Most notably, director James Cameron called out Sarandos and claimed he wanted to institute a 17-day window, a claim Sarandos denied. While Sarandos and co. did indeed want to acquire Warner, he explained why they decided to back out:
We had a very tight range that we’d be willing to pay and made that offer back when we closed this deal. 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.
Questions still remain in regard to the Paramount/WB deal, which still must go through regulatory approval and meet other requirements. It’s hard to say exactly what lies ahead if the agreement goes through completely, but it’s fair to say that the entertainment landscape will look a lot different. Asked whether he believed the deal would be approved, Sarandos said he had “no idea” and that he “wouldn’t want to speculate.”
