Netflix co-CEO Ted Sarandos has stated that the streaming giant withdrew from the bidding war for Warner Bros. Discovery's studio and HBO assets solely due to price, not political pressure. The auction was ultimately won by a consortium led by Larry and David Ellison, who are acquiring the company via Paramount Global.
In an interview with Bloomberg, Sarandos clarified that regulatory concerns, including pushback from Republican lawmakers in Washington, did not factor into Netflix's decision to walk away. The move came after WBD informed Netflix that a rival offer from Paramount was deemed a "superior proposal."
Financial Threshold the Deciding Factor
Sarandos explained that Netflix had a firm financial limit. "I still believe in all the positives. I just believed in them up to $27.75 a share," he said, referencing the original price Netflix agreed to pay in December. He emphasised that the meeting at the White House on the day of the withdrawal was "very productive" and unrelated to the deal's fate.
The decision surprised many industry observers, who expected Netflix to counter Paramount's final bid. Sarandos repeatedly dismissed the notion that former President Donald Trump's preferences or the political leanings of the Ellison brothers—David Ellison attended the State of the Union as a guest of Senator Lindsay Graham—influenced Netflix's calculus.
CNN Ownership a Key Divergence
A significant point of divergence between the bids was the inclusion of CNN. The Paramount-Ellison deal is for the entirety of Warner Bros. Discovery, including the news network. Netflix's offer specifically excluded CNN and WBD's other basic cable channels.
Sarandos suggested this difference lessened political interest in Netflix's proposal. "Once it was clear that we weren't in the CNN business, it was a lot less interesting. He didn't care that much more about our deal," Sarandos stated, referring to Trump. A Netflix representative later clarified that Trump became less interested in the outcome of Netflix's bid, not that he opposed it.
Future Deal-Making Unlikely in Short Term
Looking ahead, Sarandos indicated that a major acquisition in the near future is improbable. He said it was "unlikely" Netflix would attempt to purchase another significant asset within the next year or so. This stance leaves the company focused on organic growth and content investment rather than large-scale mergers and acquisitions for the immediate future.
The completion of the Warner Bros. Discovery sale to Paramount and the Ellison consortium remains subject to regulatory approval. The deal's structure, encompassing the entire company including CNN, appears to have aligned with political sentiments calling for the network's sale.