The Man Who Wants Netflix to Save Hollywood

Summary

The Journal. – "The Man Who Wants Netflix to Save Hollywood"

Date: January 8, 2026
Hosts: Ryan Knudson
Guest: Joe Flint (WSJ reporter)
Podcast: The Journal (WSJ & Spotify Studios)

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Episode Overview

This episode examines Netflix's groundbreaking attempt to acquire Warner Brothers, a move that could reshape Hollywood’s power dynamics. Through a deep dive into Ted Sarandos’ unconventional rise and leadership style, hosts Ryan Knudson and guest Joe Flint explore how Netflix transformed content deals, antagonized the old guard, and is now fighting battles on multiple fronts—against both industry competitors like Paramount and wary government regulators.

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Key Discussion Points & Insights

1. Netflix’s Bid for Warner Brothers: Disrupting Hollywood

• Announcement & Industry Reaction

  • Netflix's tentative $72 billion deal to acquire Warner Brothers stirs unease, especially among traditional Hollywood creatives and studios.
  • Joe Flint describes Hollywood’s anxiety about Silicon Valley “disruptors” overtaking creative control:

    "They're a tech company. What are they gonna do? Are we all gonna be making movies and TV shows based off their algorithms and creativity will fly out the... So all the Netflix boogie monsters are coming out right now." (00:14–00:38)

• Stakes in the Merger

  • If successful, the acquisition would meld the largest streaming service (Netflix) with a classic Hollywood studio, consolidating power and content libraries.
  • Concern among Hollywood professionals about one less buyer for content—lessening competition and opportunities.

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2. Ted Sarandos: Video Store Clerk to Streaming King

• Sarandos’ Background & Rise
  • Grew up in Arizona, worked at a video store, became a regional content distributor. Early passion for indie movies set him apart.
  • Reputation for savvy deal-making led Reed Hastings to recruit him to Netflix in 2000 as head of content acquisition.
  • Early vision: Netflix must create its own original programming to control its destiny.
    • Ted Sarandos (previous interview):

      "...In this world where we're going to be a digital channel, and I don't know of any network or that exists that doesn't have some form of original differentiating program from each other." (03:57–04:13)

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3. Rewriting the Hollywood Deal-Making Playbook

• Unique Content Deals

  • Netflix upended norms by giving creators big upfront payments, buying out backend and syndication rights.
    • Joe Flint:

      "We're gonna give you all this money upfront. And in return, of course, the show's ours now. You know, we're going to keep it for ourselves... At first this was like— the town was like, 'Ooh, this is awesome... I don't have to wait around for this money.'" (04:35–05:03)

• "House of Cards" Breakthrough

  • Netflix’s risk: greenlighting two seasons upfront—no pilot, full trust in David Fincher and Kevin Spacey’s vision.
  • Creator-first approach combined necessity and a deliberate edge over incumbents.

• Broad Genre Domination

  • Netflix rapidly diversified into genre-defining originals:
    • House of Cards, Orange Is the New Black, Arrested Development revival, Stranger Things
    • Pushed aggressively into stand-up comedy (Chris Rock, Dave Chappelle), luring major talent while rivals faltered.

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4. From Darling to Dominator: Hollywood’s Changing Attitude

• Initial Creator Enthusiasm Turns to Wariness

  • Creators enjoyed upfront deals but later questioned payment fairness, given Netflix’s secrecy around viewership data.
    • Joe Flint:

      "Some creators begin to wonder, but am I getting paid enough? ... How do I really know how popular it is if we don't test the waters to sell the rerun somewhere? ... Netflix is very cautious about the information they release in terms of who's viewing it." (09:12–09:36)

• Distribution Model Friction

  • Netflix eschewed traditional theatrical releases, angering theater chains and Hollywood purists.
    • Joe Flint:

      "Oh, my God. You can't not put a movie in the theaters. Are you insane, man? ... Ted's belief was, hey, people want to watch stuff at home, and we're about the customer first..." (09:41–10:33)

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5. Sarandos’ Perspective: “We’re Saving Hollywood”

• Pushback Against Critics

  • Sarandos insists Netflix is a lifeline, not a destroyer, for a struggling industry:

    • Ryan Knudson:

      "Have you destroyed Hollywood?"
      Ted Sarandos:
      "No, we're saving Hollywood." (11:11–11:12)

  • Argument: Netflix invests more money than ever in content, offers global reach, and innovates access for both creators and audiences.

    • Joe Flint:

      "Look at how much money we invest in movies and TV... We're not here to ruin it. We're here to build it out..." (11:14–11:38)

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6. The Business Battle: Paramount’s Counter-Bid

• Rival Offer
  • Paramount, backed by David and Larry Ellison, is aggressively pursuing Warner with repeated and increasing bids, promising up to $40B personal guarantee from Larry Ellison.
    • Joe Flint:

      "Paramount is still aggressively pursuing Warner. They are not taking no for an answer." (12:18)
      "The question becomes, is Paramount gonna come back now with a sweeter offer? And if they do, does Netflix come back with a sweeter offer too? Or does Netflix say, eh, no, we're out." (13:05–13:17)

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7. Regulatory Hurdles & DC Lobbying

• Political Scrutiny

  • The deal’s size and impact draw government and industry attention; President Trump has weighed in on its significance and anti-competitive risks.
    • Joe Flint:

      "President Trump, he's expressed some concern about Netflix. He's praised Netflix and Ted Sarandos, but also said their size is a concern." (13:38–14:05)

• Industry Objections

  • Cinema United (theater owners’ group) argues the merger would devastate theaters and diminish consumer choice.
  • Sarandos (public statement):

    "We think it's gonna be great for consumers, really great for creators. You know, we invest heavily in production and then we intend to run those businesses exactly like they run today." (14:25–14:35)

• PR and DC Strategy

  • Netflix launches a lobbying and PR blitz: websites, direct appeals, hiring DC talent with strong GOP/Trump connections, arranging CEO meetings with the President.
    • Joe Flint:

      "He [Sarandos] did go to the White House before this deal with Warner was officially announced. Netflix has been hiring lobbyists as well who have close Republican and Trump ties..." (15:10–15:51)

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8. The Hollywood Ending?

• Sarandos’ Victory Lap

  • Photo ops at Warner studios, walking the lot and reflecting on Hollywood’s legacy—a symbolic near-triumph.
    • Joe Flint:

      "It was almost a victory lap, even though the deal hasn't closed. ... Ted Sarandos is, you know, a lover of old Hollywood. He loves creatives. He loves the quote, unquote, Hollywood magic." (16:33–17:04)

• Personal Arc

  • Sarandos’ journey from a Phoenix video store to entertainment’s zenith is worthy of a movie itself.
    • Joe Flint:

      "If this deal goes through and is successful, I mean, you'd pitch it as a movie. The guy in a video store ends up running all of Hollywood..." (17:15)

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Notable Quotes & Memorable Moments

• "Some might argue Ted is already the king of Hollywood. But if he gets the Warner deal, he'll have a castle to go with his kingdom."
  —Joe Flint (01:14)

• "Here's a big fat check."
  —Ryan Knudson & Joe Flint (05:04)

• "No, we're saving Hollywood."
  —Ted Sarandos (11:11)

• "They produced House of Cards, but they haven't really had to play House of Cards, right?"
  —Ryan Knudson (16:05)

• "It was almost a victory lap, even though the deal hasn't closed. ... He loves the quote-unquote, Hollywood magic."
  —Joe Flint (16:33–17:04)

• "The guy in a video store ends up running all of Hollywood..."
  —Joe Flint (17:15)

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Timestamps for Important Segments

• 00:05-01:24 — Netflix’s Warner deal, industry anxiety, Ted Sarandos
• 02:26-03:54 — Sarandos’ origin story & career beginnings
• 03:54-06:02 — Netflix’s new content model, first major hits, creator relations
• 06:02-07:13 — Netflix’s genre expansion and comedy push
• 07:13-09:04 — Co-CEO promotion, Chappelle controversy, talent loyalty
• 09:04-10:33 — Creator misgivings, data secrecy, clash with theatrical tradition
• 10:52-11:38 — Sarandos’ defense: “saving Hollywood,” Netflix’s global content argument
• 11:38-13:17 — The Paramount face-off: rival bids escalate
• 13:38-15:51 — Politics, regulation, and Netflix’s DC offensive
• 16:24-17:15 — Sarandos’ near-victory lap at Warner, Hollywood fairytale

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Tone & Language

The conversation is fast-paced, sharp, and often tongue-in-cheek, demonstrating both awe and skepticism toward Netflix’s industry-shaking moves. Sarandos is depicted as pragmatic, creator-friendly, but also fiercely competitive and unafraid to challenge the old guard—unless, as the episode suggests, he needs to learn Washington’s own rules of power.

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Ideal for listeners curious about:

• How Netflix changed Hollywood’s basic business deals
• The rise of tech in entertainment
• Political and business intrigue behind historic media mergers
• The personal saga of Ted Sarandos, from fanboy to mogul

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End of summary.

Transcript

[Ryan Knudson]

Ever since Netflix announced a deal to acquire Warner Brothers back in December, some Hollywood creatives have been shaking in their boots.

[Joe Flint]

A lot of the concern is just sort of that these guys are the disruptors from Silicon Valley. They're a tech company.

[Ryan Knudson]

That's my colleague Joe Flint.

[Joe Flint]

What are they gonna do? And we're all gonna be making movies and TV shows based off their algorithms and creativity will fly out the. So all the Netflix boogie monsters are coming out right now.

[Ryan Knudson]

The deal isn't yet finalized, but if Netflix is successful, the merger would create a Hollywood behemoth, marrying the world's biggest streaming service with one of Hollywood's most storied studios filled with important ip.

[Joe Flint]

Hollywood would prefer that no one buy Warner Brothers because anytime one of these companies get sold, there's one fewer entity to sell a project to. There's one fewer company to do business with.

[Ryan Knudson]

And one of the men who'd be at the helm of this new entertainment juggernaut is Netflix co CEO Ted Sarandos. Does Ted Sarandos want to be the king of Hollywood?

[Joe Flint]

Some might argue Ted is already the king of Hollywood. But if he gets the Warner deal, he'll have a castle to go with his kingdom.

[Ryan Knudson]

Welcome to the Journal, our show about money, business and power. I'm Ryan Knudson. It's Thursday, January 8th. Coming up on the show, the rise of Ted Sarandos and his fight to win Warner.

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[Ryan Knudson]

All right, let's talk about Ted Sarandos origin story. Where is he from and how did he even wind up in the entertainment industry to begin with?

[Joe Flint]

Well, Ted grew up in Arizona and he took a job in a video store when he was, you know, in between high school and sort of going to college. And he was a movie buff and he always, honestly, he kind of loved the types of movies that weren't ever coming to Phoenix. He was a little bit of an indie movie fan.

[Ryan Knudson]

Sarandos rose through the ranks and worked his way up from store clerk to regional distributor.

[Joe Flint]

He's getting to know people and doing deals with studios to acquire content to put on the shelves. So in the course of doing that, he starts to get a little bit of a reputation as a sharp guy when it comes to doing these sorts of deals.

[Ryan Knudson]

Sarandos eventually got on the radar of Reed Hastings, who was just a couple years into launching a mail order DVD company called Netflix. In 2000, Hastings hired Sarandos to oversee content acquisition. But soon Sarandos was thinking bigger as.

[Joe Flint]

Netflix kind of began to move its business from mail DVDs to online. TED was a very early advocate that, hey, we will need to do original programming of our own. Basically, it will help us control our own destiny. The more content we can own, the better for the future of this business.

[Ryan Knudson]

Here he is talking about this in a podcast a few months ago.

[Ted Sarandos]

Because I said, in this world where we're going to be a digital channel, and I don't know of any network or that that is exists that doesn't have some form of original differentiating program from each other.

[Ryan Knudson]

So Sarando set out to make some new TV shows. And the way he and Netflix approached Hollywood was totally different than the way things used to work. Historically, traditional studios paid directors, actors and movie producers less up front. And then if the show was popular, there was the promise of more money later on from reruns. Netflix flipped that on its head.

[Joe Flint]

They would pay more up front. They'd say, joe, we love your show and we're gonna buy out whatever we think the back end, the rerun money will be. So we're gonna give you all this money up front. And in return, of course, the show's ours now. You know, we're going to keep it for ourselves. It's going to live on our system. We're never going to take it out anywhere else. You just got to trust us that we're giving you the value it is. And at first this was like. The town was like, ooh, this is awesome. This is awesome. I don't have to wait around for this money. I don't have to wait 20 years for reruns.

[Ryan Knudson]

And here's a big fat check.

[Joe Flint]

Here's a big fat check.

[Ryan Knudson]

This is how Sarandos and Netflix were able to land their first big hit, the political drama House of Cards.

[Joe Flint]

He chose money over power in this town. A mistake nearly everyone makes. So Netflix went out, you know, and famously went to David Fincher, who was shopping a American version of the TV show House of Cards with Kevin Spacey. Went to him and said, hey, we'll give you a two year commitment. We will guarantee You? Two years, you know, two seasons. No, you know, no pilot, no nothing. Here's the money. Make your show. Netflix became very creator friendly and part of it was out of necessity to get deals, and I think part of it was to give themselves a little bit of an edge over their competitors. And the town reacted to that. They liked that.

[Ryan Knudson]

Netflix continued growing its original programming catalog with hit show after hit show. There was the gritty, character driven women's prison dramedy, Orange is the New Black.

[Sponsor/Announcer]

Tell her he said thanks.

[Joe Flint]

Don't say nothing.

[Ryan Knudson]

I'm just working. Next, and the revival of the cult favorite sitcom, Arrested Development. Now the story of a family whose future was abruptly canceled. The supernatural, nostalgic coming of age drama Stranger Things.

[Joe Flint]

Stop it. You're freaking her out. She's freaking me out. I bet she's deaf. So we talk about House of Cards, we talk about Orange is the New Black, we talk about Stranger Things, all these very expensive, high end dramas. But Netflix has to expand, of course, and Sarandos, one of the areas he really leaned into and is still leaning into, is stand up comedy, which of course had been HBO's bread and butter. And Netflix went out, they signed Chris Rock and Dave Chappelle and all these other big standups to huge deals. At a time when HBO was reassessing how much this genre was actually worth, Netflix thought, no, these specials are good. They build attention and publicity for us and we want to be in the comedy business.

[Ryan Knudson]

After leading the charge on multiple hits, which helped bring in tons of subscribers to the platform, Sarandos was promoted to Co CEO in July 2020. And not long after taking the job, Sarandos faced one of his first controversies involving one of those comedians, Dave Chappelle.

[Joe Flint]

One thing I think people respect Ted for, at least on the talent side of the business, is that he has shown a willingness to stand up for his talent. We saw that with Dave Chappelle a few years back. He did a standup special. He had jokes and commentary that upset the gender community. There was some upset at Netflix as well. There were protests outside Netflix. Netflix employees were upset. And Ted stood by. He didn't take the special off. He didn't issue any statements condemning what Chappelle said, but I think that sent a message.

[Ryan Knudson]

So Netflix in its early days was wooing Hollywood, AKA the town. And you said that at first people there liked it. So how did they become a company that people started to fear?

[Joe Flint]

Well, anytime you get big, you start to toss your muscle around. So Netflix grew, had tremendous success, grew a Lot of subscribers. And with that comes, you know, power. Because they were growing so fast and spending so much, they became kind of the one place you could come to do business. But at the same time, once you've sort of taken over the landscape, well, you don't spend as much. You know, you, you spend a ton of money to woo the, get the talent in there. But once you've got that, well, you don't have to spend as much money anymore.

[Ryan Knudson]

Netflix also doesn't release much data about how many people are watching its shows, so it's hard to know what a show's market value actually is.

[Joe Flint]

Some creators begin to wonder, but am I getting paid enough? Is this really fair? How do I really know how popular it is if we don't test the waters to sell the rerun somewhere? And Netflix is very cautious about the information they release in terms of who's viewing it? So I don't really know. Everyone's like, oh, wait a minute, maybe this wasn't so good for us after all.

[Ryan Knudson]

The other thing that zerked Hollywood is how Sarandos has approached releasing new movies.

[Joe Flint]

When Netflix got into movies, they made a big deal of not embracing the theatrical model. So that became a concern to a lot of sort of Hollywood purists, we'll call them, as well as the movie theater industry, of course. Oh, my God. You can't not put a movie in the theaters. Are you insane, man? Yes, they do release some movies theatrically, usually for award consideration or a big enough director has the clout to persuade Netflix to drop it in a theater for a couple weeks. But yeah, Ted's belief was, hey, people want to watch stuff at home, and we're about the customer first, okay? And the movie going experience. Yes, maybe it's great for some things, but most people would just as soon sit at home. So you know, that that was kind of a turnoff to a lot of old Hollywood.

[Ryan Knudson]

All of this is why Hollywood was shaking in its boots when Netflix announced the deal to acquire Warner Brothers. Netflix has already transformed the industry, and by buying another major player, things are probably only going to change more. How has Ted Sarandos responded to all of these concerns in Hollywood?

[Joe Flint]

Ted has said when he's asked that, are you guys ruining Hollywood? He will say, no, we're saving it.

[Ryan Knudson]

The box office is down, the LA film business is shaky, people are out of work, your competitors market share is sinking, but Netflix business is thriving. Have you destroyed Hollywood?

[Ted Sarandos]

No, we're saving Hollywood.

[Ryan Knudson]

You're saving Hollywood.

[Joe Flint]

They would tell you that they're spending a ton on content. How can we be ruining Hollywood? Look at how much money we invest in movies and TV shows. And we have a global system that reaches everyone. We believe in all this. We're not, you know, we're not here to ruin it. We're here to build it out and persevere and find even more of an audience and a new way to reach them.

[Ryan Knudson]

But to actually get Warner, Sarandos has a couple fights ahead of him. That's next. Before Netflix can seal the deal for Warner Brothers, it has to do two things. First, it has to fend off a rival bidder, Paramount. Then it'll need to persuade regulators to approve the deal. Let's start with Paramount. The company has deep pockets behind it, those of Larry Ellison, one of the richest men in the world.

[Joe Flint]

Paramount is still aggressively pursuing Warner. They are not taking no for an answer.

[Sponsor/Announcer]

David Ellison, Paramount's CEO, says they are, quote, finishing what they started after making six total offers.

[Joe Flint]

Paramount Skydance amending its $30 per share all cash offer for Warner Brothers discovery.

[Sponsor/Announcer]

The Oracle co founder and father of Paramount Skydance CEO David Ellison on Monday said he will personally guarantee more than $40 billion for the deal.

[Ryan Knudson]

So far, Paramount's pursuit of Warner hasn't been successful. In a letter to shareholders made public earlier this week, Warner said the amended Paramount offer wasn't superior or even comparable to the $72 billion Netflix deal.

[Joe Flint]

The question becomes is Paramount gonna come back now with a sweeter offer? And if they do, does Netflix come back with a sweeter offer too? Or does Netflix say, eh, no, we're out.

[Ryan Knudson]

Paramount has said its offer is superior to Warner Brothers agreement with Netflix and quote, represents the best path forward. If Netflix is able to fend off Paramount, it will then face its second challenge, getting the deal past government regulators who will get to weigh in on whether the merger creates anti competitive issues.

[Joe Flint]

Clearly, President Trump has expressed a lot of interest in this deal. Typically, normally a president doesn't necessarily weigh in on deals that are going to go before independent agencies, whether it was the fcc, the doj, the ftc. President Trump, he's expressed some concern about Netflix. He's praised Netflix and Ted Sarandos, but also said their size is a concern.

[Ryan Knudson]

At a congressional oversight hearing yesterday, Cinema United, a trade organization representing movie theater owners, argued that this merger would be disastrous for movie theaters, local economies and consumer choice. Sarandos has said that Netflix is confident the deal will win approval because it's, quote, pro consumer and pro innovation. He spoke about it last month.

[Ted Sarandos]

So we think it's gonna be great for consumers, really great for creators. You know, we invest heavily in production and then we intend to run those businesses exactly like they run today.

[Ryan Knudson]

So what is Netflix doing in dc?

[Joe Flint]

Netflix kind of went on a PR offensive, if you will. They've got a website set up and it has all these, you know, details on the deal. Why Netflix and Warner means even more choice and value for fans, why it will define the next century of storytelling, why these are complementary businesses to deliver more choice and value for consumers. So they're doing that right now.

[Ryan Knudson]

Sarandos has also had a couple meetings with President Trump.

[Joe Flint]

He visited Mar a Lago In December of 2024 after Trump won, but before Trump took office. Ted was one of the many CEOs who went to give effects, I'll say, and dine down there. And he did go to the White House before this deal with Warner was officially announced. Netflix has been hiring lobbyists as well who have close Republican and Trump ties. Their head of their DC office was in Trump's first administration. So there's a lot of that sort of road paving going on, if you will. So not a surprise, but nonetheless for Netflix, something new. Because this is the other part of the game they've kind of stayed out of.

[Ryan Knudson]

They produced House of Cards, but they haven't really had to play House of Cards, right?

[Joe Flint]

They haven't had to play House of Cards. So, yeah, this is a new sort of thing for them to have to go there and really grease the wheels, if you will.

[Ryan Knudson]

Late last year, Sarandos and his co CEO Greg Peters had a photo shoot on the Warner Brothers studio lot. Alongside the head of Warner Brothers, they.

[Joe Flint]

Toured soundstages, they met with some other execs and people there. It was almost a victory lap, even though the deal hasn't closed. You know, walking around the lot and seeing all that history and look, Ted Sarandos is, you know, a lover of old Hollywood. He loves creatives. He loves the quote, unquote, Hollywood magic.

[Ryan Knudson]

For Sarandos, acquiring Warner Bros. Would mark the culmination of his rise from just a guy who loved movies working in a video store to one of the most powerful people in Hollywood.

[Joe Flint]

If this deal goes through and is successful, I mean, you just, you'd pitch it as a movie. The guy in a video store ends up running all of Hollywood. But, yeah, it'll have been an amazing and incredible run for him.

[Ryan Knudson]

That's all for today. Thursday, January 8th. The Journal is a co production of Spotify and the Wall Street Journal. Additional reporting in this episode by Lauren Thomas and Jessica Tunkel. Thanks for listening. See you tomorrow.