Netflix boss defends bid for Warner Bros as Paramount deadline looms

Ted Sarandos stood before the BBC defending a deal that would have seemed unthinkable five years ago. Netflix, the company that spent a decade blowing up Hollywood's business model, now wants to buy one of its crown jewels. The streaming giant's co-CEO insists its accepted bid for Warner Bros represents growth, not consolidation—but Paramount's rival offer has forced an uncomfortable question into the open: is Netflix's pivot to legacy studio ownership a sign of strength or desperation?

The battle lines are stark. Netflix has structured its bid to cherry-pick Warner Bros' premium assets—the studio operations, New Line Cinema, and HBO Max—whilst leaving the declining pay-TV networks to be spun off as an independent entity. It's surgical asset-stripping dressed up as strategic acquisition. Paramount, by contrast, has tabled an offer for the entire company at $108.4bn, traditional television baggage and all.

Speaking to the Today programme, Sarandos framed Netflix's approach as expansion rather than consolidation. 'We're buying a movie studio and a distribution entity that we don't currently have—we'll be adding to the market,' he said. According to Netflix's analysis, the industry would actually shrink under Paramount ownership, which Sarandos claimed has committed to cutting $6bn from Warner Bros immediately, with an additional $16bn in reductions to follow.

If accurate, those figures would represent one of the largest restructurings in media history. They also reveal just how dire the financial position of traditional media has become.

The infrastructure Netflix spent years trying to destroy

What makes this deal particularly striking is the strategic reversal it represents. Netflix built its reputation—and its $280bn market capitalisation—by circumventing the studio system entirely. For years, it poured billions into developing original content in-house, from Stranger Things to The Crown, avoiding the licensing fees and distribution arrangements that enriched traditional studios.

That model clearly has limits. Despite spending an estimated $17bn on content in 2024 alone, Netflix still lacks the theatrical distribution infrastructure and decades-deep IP libraries that Warner Bros brings. The studio's assets include everything from DC Comics franchises to classic film catalogues, plus established relationships with talent and exhibitors that can't be built overnight.

Warner Bros shareholders will vote on the Netflix deal next month, but Paramount has until the end of Monday to submit what the board has termed a 'best and final' offer. Paramount executives argue their bid provides greater certainty, and they've even offered to cover the $2.8bn break-up fee Warner Bros would owe Netflix if it walks away. That's not posturing—that's serious intent.

The question is whether Warner Bros' board believes Sarandos' growth narrative or sees Paramount's consolidation play as the safer bet. Both scenarios involve betting on fundamentally different visions of Hollywood's future.

Which parts of old media still matter

Netflix's decision to exclude Warner Bros' pay-TV networks from its bid is perhaps the deal's most revealing detail. These linear television assets, once the reliable cash engines of media conglomerates, are now viewed as liabilities. Subscriber numbers continue their steady decline as audiences migrate to streaming, and advertising revenue follows them out the door.

By contrast, studio production capabilities and established streaming platforms retain their value. HBO Max, despite its troubled rebranding journey, still represents a premium content brand with subscriber loyalty. Warner Bros' production facilities and distribution relationships remain relevant infrastructure, even in a streaming-dominated landscape.

This selectivity suggests Netflix has learned from previous media mega-mergers. AT&T's disastrous acquisition of Time Warner demonstrated that buying everything rarely works.

Whether this calculation proves correct depends partly on how much traditional theatrical distribution still matters. Netflix has historically treated cinema releases as marketing exercises rather than revenue streams, dropping films into theatres for awards consideration before quickly moving them to its platform. Warner Bros' theatrical business operates on entirely different economics. Integrating these approaches without destroying value in either will require more finesse than Netflix has typically shown with acquired properties.

The consolidation no one wants to call consolidation

Sarandos' insistence that Netflix's bid represents growth rather than consolidation deserves scrutiny. Yes, Netflix doesn't currently own a major studio, so technically it's expanding into new territory. But the practical effect is that one of the six remaining major studios would disappear into a streaming platform, reducing the number of independent decision-makers commissioning content.

For creatives, fewer buyers usually means less leverage and more conservative programming decisions. For audiences, it potentially means less diversity in the types of stories that get greenlit and how they reach viewers. These concerns exist regardless of whether Paramount or Netflix ultimately succeeds.

Industry analysts remain divided on which scenario poses greater risk to the sector's overall health. Paramount's consolidation would undoubtedly involve massive cuts—Sarandos' figures may be contested, but nobody disputes that significant restructuring would follow. Netflix's approach preserves more jobs in the short term but accelerates the shift away from theatrical distribution and traditional production models.

The deal's outcome will signal which direction Hollywood believes its future lies. If Warner Bros shareholders back Netflix next month, they're essentially declaring that streaming platforms are the industry's inevitable consolidators. If they hold out for Paramount or another traditional media buyer, it suggests belief that the old guard can still restructure its way to relevance.

Either way, Warner Bros Discovery has rejected Paramount's latest offer, though it has given the rival studio a seven-day window to revise its bid. Ted Sarandos revealed that Netflix agreed to this brief negotiation period in order to eliminate uncertainty and force a final decision. Meanwhile, Sarandos has accused Paramount of "flooding the zone" with public statements designed to create doubt about Netflix's offer. The only question is which vision of Hollywood's future gets to absorb nearly a century of film history—and what gets lost in the transaction.