Bonus: Netflix co-CEO Ted Sarandos Says Warner Deal to Put More Films in Cinemas

Summary

Bloomberg Tech Podcast – Bonus Episode

Netflix co-CEO Ted Sarandos Says Warner Deal to Put More Films in Cinemas
Date: February 19, 2026
Host: Bloomberg (unnamed, with Lucas Shaw co-moderating)
Guest: Ted Sarandos, Co-CEO of Netflix

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Episode Overview

In this special episode, Bloomberg hosts interview Netflix co-CEO Ted Sarandos about Netflix’s recently won bid to acquire Warner Bros. Discovery’s studio and streaming business. The conversation dives deep into the deal’s rationale, reactions from shareholders and Hollywood, regulatory considerations, theatrical release strategy, and Sarandos’s outlook for both Netflix and the wider industry. Sarandos also addresses concerns about jobs, creative output, and Netflix’s approach to competition.

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Key Discussion Points and Insights

1. Netflix’s Warner Bros. Discovery Bid: Rationale and Positioning

• Deal Process and Bid Clarity:

  • Netflix feels confident in its position having won a clearly-defined bidding process for assets that Warner Bros. Discovery decided to sell.
  • Netflix has given Warner Bros. Discovery a seven-day window for clarity on any competing bid from Paramount (02:31, 06:35).
  • Sarandos emphasizes the need for Warner Bros. Discovery shareholders to have certainty about this process.

  “I believe it’s important to have that clarity. I think it’s important that the Warner Bros. Discovery shareholders deserve to have that certainty and clarity about this deal.” – Ted Sarandos (02:31)

• Long-Term vs. Short-Term Perspective:

  • Netflix is committed to a long-term vision, citing consistent discipline in acquisitions.
  • While acknowledging stock declines since the deal was announced, Sarandos attributes this to uncertainty and headwinds in the broader sector rather than flaws in the deal.

  “We run this company from the beginning for the long term…what we’re doing buying these assets is...We have a consumer model that can better maximize the returns on that IP.” – Ted Sarandos (03:50)

2. Shareholder and Market Reactions

• Stock Reaction and Perceptions:

  • Netflix stock dropped over 30% on deal news. Sarandos contextualizes this as the product of market uncertainty and sector-wide trends, not a lack of confidence in the acquisition.

  “There’s been some headwind in the stock. There’s been some headwind in the sector...They don’t like uncertainty...We have always been an incredibly disciplined buyer and we will continue to be one here.” – Ted Sarandos (04:03)

• Addressing Concerns About Growth and Strategy:

  • Some investors view the move as defensive given stagnant engagement growth. Sarandos pushes back, citing a robust financial year (2025: revenue growth of 16%, operating income up 30%) and rising engagement metrics.

  “If you look at the year we just came out of in 2025, grew revenue 16%, we grew operating income by 30%...our engagement did go up, went up a couple of billion hours.” – Ted Sarandos (05:18)

• Defending Against Calls to Walk Away:

  • On regulatory risk and integration: Netflix is experienced at business pivots and integrating new lines (advertising, live sports). He claims the path with the DOJ and global regulators is “normal” and manageable.

  “There’s nothing uniquely challenged about that process. We are about in the middle of it with the DOJ, with the European regulators...” – Ted Sarandos (06:35)

3. Competing Bids: Netflix vs. Paramount

• Why Netflix’s Deal is Superior:

  • The Netflix bid is for the assets on offer, not a complicated whole-company purchase. Sarandos claims buying the entire Warner Bros. Discovery (as Paramount proposes) brings regulatory and operational hurdles, especially in Europe (sports networks, complex broadcasting regulations).
  • The Netflix deal offers $27.75 per share plus Discovery Global assets, matching Warner Bros. Discovery’s own sale structure.

  “Our deal is quite simple: $27.75 per share, the value of Discovery Global, which I think is an incredible asset. And they do too. That’s why they set the offer up this way.” – Ted Sarandos (08:54)

• Option of Buying the Whole Company?

  • Netflix isn’t interested in the linear broadcast business, especially outside the U.S.

  “The linear broadcast business is not something that we’re interested in but others are.” – Ted Sarandos (09:49)

4. Political and Regulatory Dynamics

• Interactions with the Administration:

  • Sarandos confirms contact with the president regarding industry health and American jobs, but dismisses any suggestion of special regulatory access for rivals (i.e., Paramount/Ellison family).

  “This is a business deal, not a political deal.” – Ted Sarandos (10:39)

• Regulatory Inquiry Into Theatrical Impact:

  • DOJ is examining what either outcome would mean for cinemas. Sarandos frames this as standard guideline-driven diligence (2023 DOJ merger guidelines).

5. Theatrical Release Commitments and Antitrust Questions

• Netflix’s Theatrical Strategy Post-Deal:

  • Warner Bros. will “run pretty much like they are today,” with traditional 45-day theatrical windows for films.
  • Netflix aims to increase the number of high-quality films in theaters, channeling select Netflix productions through Warner's distribution system.

  “We’re going to keep Warner Bros. running pretty much like they are today, releasing their movies in theaters for the traditional 45-day windows...It’s very likely that you’ll have even more outcome of high-quality films for the theaters if this deal goes through.” – Ted Sarandos (12:19)

  • Sarandos references successful partnership events like the Stranger Things finale and K-pop activations as examples of creative collaboration with theaters.

  “We did the Stranger Things finale, which had thousands and thousands of sold out shows all over the country, or the K-pop Demon Hunter sing-along, which energized the theaters on an otherwise very slow week.” – Ted Sarandos (13:21)

• Will Netflix Commit in Writing to Theater Output or Production Levels?

  • Sarandos resists formal written commitments, arguing Netflix’s combined market share remains relatively modest, and that imposed remedies aren’t warranted.

  “We don’t. This deal does not represent any concentration risk at all...9% of the business, we’re going to add HBO to that, we’re going to have 10% of the TV business...” – Ted Sarandos (14:35)

6. Industry Jobs, Union Interests, and Competitive Pressure

• Trade Unions and Jobs:

  • Sarandos urges unions to support the Netflix-Warner deal, warning that a Paramount acquisition could mean drastic additional cost-cutting and job losses.

  “The trade unions...should come out and support this deal explicitly on behalf of their membership to protect employment and jobs.” – Ted Sarandos (15:39)

7. HBO and Future Consumer Value

• HBO Standalone Access and Pricing:

  • Netflix will continue to offer HBO as a standalone, with plans for bundle discounts. 80%-85% of HBO Max U.S. subscribers already have Netflix subscriptions.

  “We will continue to offer it as a standalone unit...We’ll be able to put those businesses together and give those consumers a pretty steep discount. So that we’re excited to do.” – Ted Sarandos (17:09)

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Memorable Quotes & Notable Moments

• “People don’t like change, they don’t like any degree of uncertainty. Sometimes...any time there’s a new deal, there is regulatory scrutiny, there is execution risk...but we are highly confident that we’re going to bring this deal close.” – Ted Sarandos (06:35)

• “This is a business deal, not a political deal.” – Ted Sarandos (10:39)

• “What they [theaters] really need is more good movies and we’re going to provide them for them.” – Ted Sarandos (14:07)

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Important Timestamps

• 02:31 – Sarandos explains Netflix’s strategy and the bid's clarity window
• 03:50 – On running Netflix for the long term and leveraging Warner Bros. IP
• 05:18 – Addressing concerns about Netflix's growth rate and engagement
• 06:35 – Responding to calls for Netflix to walk away; regulatory confidence
• 08:54 – Why Netflix’s proposed asset deal is simpler and preferable
• 10:39 – On political lobbying, regulators, and process transparency
• 12:19 – Detailed answer on theatrical strategy post-acquisition
• 14:35 – On (not) making written commitments for theater output
• 15:39 – Urging Hollywood trade unions to support the deal on jobs grounds
• 17:09 – Plans for HBO access and pricing for consumers

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Tone and Language

Ted Sarandos maintains a pragmatic but optimistic tone, repeatedly emphasizing Netflix’s discipline, long-term approach, and respect for existing Hollywood practices. His arguments are direct, blending confidence in Netflix’s operational capabilities with pointed criticisms of rival bids and a candid appeal to both shareholders and industry workers.

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In Summary

This episode offers a comprehensive look at Netflix’s ambitions to reshape the entertainment landscape with the Warner Bros. Discovery deal—including more movies in cinemas, new opportunities for creative talent, and assurances to both Wall Street and Main Street that the combined company will be both a competitive force and a responsible steward of beloved cultural brands. Sarandos’s answers suggest Netflix isn’t backing down from disruption, but is prepared to play by Hollywood’s rules where it matters.

Transcript

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Bloomberg Audio Studios Podcasts Radio News welcome

[Bloomberg Host]

to our Bloomberg Television and radio audiences around the world for an interview with Netflix co CEO Ted Sarandos. And Ted, the less than straightforward question that everyone has of course is what happens next? But but I wanted to put it to you like this. Does Netflix have the balance sheet, the sort of financing flexibility and the will really to amend, improve, boost its bid for Warner Brothers Discoveries Studios and streaming business if needed?

[Ted Sarandos]

Let me tell you, we feel very good about the position we're in right now. So we've done, we've done this, this process opened up. Warner Brothers Discovery determined that within their strategic best interest to sell these assets. We entered into a negotiation with a very, very clear bidding process that they laid out for us, which we followed and won that bid. I think in the alternative, B Sky has gone, you know, missed every deadline. They've been taking nine runs of this bid and they risk, you know, they're not seem to, they just don't accept this outcome. So what we've done here is we've given Warner Brothers Discovery a seven day window to get some clarity about what Paramount is offering for this company. I believe that it's important to have that clarity. I think it's important that the Warner Brothers Discovery shareholders deserve to have that certainty and clarity about this deal.

[Lucas Shaw]

Now, your stock is down more than 30% since you announced this deal. So you feel good about it. Your shareholders, it's a little less clear. I know, know that I've heard you say that that is because of uncertainty, but it went down basically as soon as you went into this. So I'm just wondering, is there a point at which it goes down so much that, that you and your fellow board members have to reconsider if this is the right path?

[Ted Sarandos]

Because remember, we run this company from the beginning. For the long term, we think this deal will have a positive impact on the business. For the long term, remember, what we're doing buying these assets is we've been creating original programming on Netflix for about a decade. They've been making original films and series for about 100 years. They have incredible IP and we just happen to have a consumer model that can better maximize the returns on that ip. So I think it's a very, it's a great long term out, you know, long term outcome. I think there has been some headwind in the stock. There's been some headwind wind in the sector. There's been some headwind because of the trade, which I think is ironic because I think I will be an amazing creator tool to actually make the entertainment business bigger and better than ever. So I do think those things have got to play out. When I said they don't like uncertainty, there's, you know, there's concern about bidding wars and all those things. And we have always been an incredibly disciplined buyer and we will continue to be one here.

[Bloomberg Host]

Ted, on those headwinds you mentioned, you know, there are a portion of the Netflix investor base and the Warner Brothers Discovery investor base that kind of see this as defensive by you. And look at growth, right, you know, engagement growth in the second half of last year, such as it was, what would you say to those people that this is response to, to that growth rate that you've experienced more recently, as opposed to something proactive and strategic.

[Ted Sarandos]

I think that they're incorrect. They're reading it wrong. I'd say that we, if you look at the year we just came out of in 2025, grew revenue 16%, we grew operating income by 30%. And our engagement did go up, went up a couple of billion hours. And I feel like, you know, there's engagement, which is an important view. Hours is one component of engagement and it's certainly one component of the value of engagement. We're very confident, you saw that in our 26 guide, that we're going to continue to operate this business well and that this model is very much worse and that this Warner Brothers acquisition is an accelerate to that model and it also future proofs that model, you know, for decades to come.

[Bloomberg Host]

TED I appreciate there's a process here and thank you, you know, kind of earlier for outlining it right through February 23rd. But before that, you know, the section of the investor base that basically thinks Netflix should walk away, look at the regulatory road ahead. They look at the integration risk and then like what Netflix is a big global technology company as opposed to being something sort of micro focused on entertainment. Hollywood. Right. And so, so, so answer those, those investors, right, you know, why, why are they wrong that actually there is a longer list of reasons to walk away than stick with it at this juncture?

[Ted Sarandos]

Well, this, this deal offers great value to the Warner Brothers discovery shareholders. It offers great long term value to Netflix. We have a, we have a normal regulatory path ahead. There's nothing uniquely challenged about that process. We are about in the middle of it with the doj, with the European regulators, with regulators all over around the world, and with state's attorney general. This is a process that we're very confident that we're going to navigate. And in fact, I'd say again, when you look at these deals that are out there, I think people would like the status quo and we have a long history of running the business well and pivoting when it's time to, and adding new business lines to the business that people get upset about sometimes. And then when we do it successfully, they thrill. I think advertising probably is the most recent example. Lie could be a more recent example. Some of our live sporting events could be a more recent example of things that have been pivots in the business that have gone on to grow the business very well and people are very happy about it. People don't like change, they don't like any degree of uncertainty. Sometimes and any time there's a new deal. There is regulatory scrutiny, there is execution risk, all of those things. But we are highly confident that we can, we're going to bring this deal close and that we're going to successfully integrate the business. I think about it as the reason why we're all talking about these deals so much. This week we've granted the seven day window to get some clarity about the Paramount deal because Paramount has been out spreading a lot of misinformation to shareholders into the markets and the regulators in ways that have run this narrative. Run the narrative is a state of confusion. We're trying to say we'll take seven days and get some clarity because what we believe is what the Warner Brothers Discovery board agrees with us on as well is that our deal is a superior deal. We believe it's good for them, know it's good for us and we are excited about getting it done.

[Lucas Shaw]

When you talk about clarity and certainty, you know one of the aspects of the Paramount deal that they have stressed is better and I think some of the Warner Brothers shareholders seem to agree or at least entertain it is, you know, they're offering to buy the whole company. They will just take it out. $30 a share. Warner Brothers doesn't have to proceed with a spin beforehand. What is your argument for why your more complex deal is better for all those shareholders than just getting the cash tomorrow?

[Ted Sarandos]

This deal is not complicated at all. Is 2775 at plus the value of Discovery Global. By the way, it's the deal that they want. It is the deal that they asked for. Those, these are the assets that were for sale. So the more complex thing is buying the whole company. They do that. Then you're buying these European sports networks. As you know, sports rights in Europe are incredibly highly regulated as is the television landscape which they'd be stepping themselves into. So I would argue that our deal is quite simple. 2775 per share the value of Discovery Global and which I think is an incredible asset. And. And they do. And they do too. That's why that they set the offer up this way. That's why when we were bidding we bid for the assets that were for sale.

[Lucas Shaw]

If Discovery Global is, is a great asset, I'm just wondering, have you guys talked about just buying the whole company and doing the spin yourself as you

[Ted Sarandos]

know where the linear broadcast business is not something that we're interested in but others are. And I think when I look at the business particularly those European networks are not in decline the way that some of the way they are in the US So it is not of our interest, but it's of interest to many buyers.

[Bloomberg Host]

Ted, you are competing in a politically sensitive media deal. There is reporting and we are in a time where the Ellisons are in their relationship to the Trump administration has been discussed. It's also reported of course that you met with the President I think on November 24th forth. How are you weighing that and assessing that in this scenario, that relationship between Paramount's leadership and this administration?

[Ted Sarandos]

Look, I have spoke to the President about the state of the entertainment industry. We've had multiple conversations about how do we protect American jobs, how do we keep the entertainment industry healthy. What are those headwinds? What are those things that we're working on to try to keep production up in the United States? We are investing $1 billion into a new state of the art production facility at the old Fort Monmouth military base in New Jersey. Obviously, the President is very keenly interested in entertainment and he's very interested in American industry and American jobs. So those are the conversations that we've had. I don't know, I don't know why the Ellison intimate that they have some direct line to the Department of Justice for, for faster path of clearance, but I doubt that they do. This is a process that is being run by the Department of Justice. The President has been very clear on that. We've been very clear on that. The Department of justice published in 2023 the guidelines for mergers that they are following right now. So that's what's happening here. This is a business deal, not a, not a political deal.

[Bloomberg Host]

You're joining us on Bloomberg Television and radio. We're speaking to Netflix's co CEO Ted Sarandos. And Ted, last night Bloomberg News reported that the Justice Department and its attorneys have made contact with movie theaters, the industry, to try and understand what either outcome would mean for the movie theater business. I know that, that you actually have discussed this a little theatrical releases, but just your latest thinking on that and what your pitch is to people on seats in movie theaters. If you were to close your proposed deal.

[Ted Sarandos]

Yeah, look, it's a very important thing to look at and I think why the DOJ is having those conversations, those are all laid out in the 2023 merger guidelines. To better understand the landscape, they're going to talk to competitors and suppliers and to better understand the landscape, including how it impacts adjacent businesses like the theatrical business. Now, our pitch is very simple because it's the truth, which is we're going to keep Warner Brothers running pretty much like they are today releasing their movies in theaters for the traditional 45 day windows. And in fact, it's even quite better for theaters because now that we're going to be in that business and own a theatrical distribution entity, we're going to take some of the Netflix films and put them through that as well. So it's very likely that you'll have even more outcome of high quality films for the theaters if this deal goes through. Now remember, Paramount has got this kind of fantasy proposal of somehow they're going to go from the half a dozen or so movies they distributed last year to 30 movies a year, which is about 10 movies more than the healthy studios are making now. I don't think that's likely, but what I know is very likely is that we're going to continue to operate that business largely as it is today, starting in the theaters, running through traditional windows, hitting HBO max to the pay TV output deal, the output deals around the world, that's going to continue and it's going to be good for the theaters because they're going to have more. And by the way, I've been talking to them more about creative things that we do together like we did the Stranger Things finale, which had thousands and thousands of sold out shows all over the country, or the K pop Demon Hunter Sing along, which, you know, energized the theaters on an otherwise very slow week. So we're excited about working together with the theaters to make that business healthy again as well. And I think that what they really need is more good movies and we're going to provide them for them.

[Lucas Shaw]

Now, we both know that, you know, as many times as you've made this commitment on the theaters, it seems that there's a certain contingent of the population that just struggles to believe it. And I'm wondering, my sense is, and I've heard that both theaters and some of the trade unions in Hollywood have asked for sort of formal commitments on some things like level of production, theatrical releases. Are you willing to kind of put those commitments in writing? And if not, why not?

[Ted Sarandos]

Lucas, let's be clear there. We don't. This is, this deal does not represent any concentration risk at all. So the remedy, those two would typically be remedies for a situation like that. According to Nielsen, we have 9% of the business. We're going to add HBO to that. We're going to have 10% of the TV business, which is the primary driver of this deal out of our business business. In the theatrical business, it's highly competitive. There's a lot of output that's going to go through there. The reason I'm not going to put in right, I wouldn't want to do this deal only to put ourselves at some bizarre competitive disadvantage down the road. And I have earned some of the skepticism about the theater business because I've said things about the state of the theatre business, but I said that in the context of a business that we were not in. And we. And today we're. We own Warner Brothers. We own a theatrical distribution entity, and we're going to want to continue to invest against the success that they've had. They just. Pam and Mike just opened their ninth number one film at the box office, nine in a row. That's the kind of winning that we want to do with, with Warner Brothers and the theater owners.

[Lucas Shaw]

You mentioned HBO and one of the guys.

[Ted Sarandos]

Sorry to go back to what you said about the trade unions as well. I think it's very important that I would like to have the trade unions to support this deal on behalf of their membership. Because what's going to happen in the alternative of this deal? I know there's some people who believe, you know, maybe if this deal doesn't happen, there'll be no sale of Warner Brothers. This sale is going to happen. It's going to be Netflix or it's going to be Paramount. And if it's Paramount, they've told everybody what they're going to do. They're going to have six, they've said $6 billion in cuts, but they've also told everyone who they're borrowing the money from that they're going to delever the company from six or seven times down to two times in 18 months, which means $16 billion in cuts. So that's what the trade unions who represent the people who make movies, writers, directors, producers, the crews of IC and the Teamsters, they're going to be working in a business that's going to be $16 billion smaller even than the 3 billion that Paramount has already cut out of its own company. So you're talking about an enormous contraction of the business. And the trade unions, I think, should come out and come out and support this deal explicitly on behalf of their membership to protect employment and jobs.

[Lucas Shaw]

Now, I'm curious. You brought up hbo. And one of the big regulatory questions around this, you know, antitrust law depends on will prices go up for consumers? Is this bad for consumers? Are you going to offer HBO on a standalone basis going forward and will you offer it for less than it is offered today?

[David Gura]

It.

[Ted Sarandos]

We will continue to offer it as a standalone unit. 80% of HBO Max subscribers in the United States have a Netflix subscription today, actually closer to 85%. So I think what that says is this is a very complimentary business and we'll be able to put those business together and give those consumers a pretty steep discount. So that we're excited to do. And that's why I think this will be pro consumer, because I think consumers have already said these are complementary businesses that they today pay a 100% premium for.

[Bloomberg Host]

Netflix Co CEO Ted Sarandos we're grateful for your time. We covered a lot of ground. And of course, Bloomberg Screen Times Managing editor Lucas Shaw. Also over in Los Angeles, Premier Protein.

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