Podcast Summary: The Town with Matthew Belloni

Episode: Netflix CEO Ted Sarandos Makes the Case for Buying Warner Bros.
Host: Matthew Belloni
Guest: Ted Sarandos, Co-CEO of Netflix
Date: February 18, 2026
Production: The Ringer

Overview

This episode centers on Netflix’s $83B acquisition attempt of Warner Bros. and HBO Max, with Ted Sarandos (“the hype man for this deal”) explaining why Netflix’s bid is superior to the competing $30–31 per share offer from Paramount and the Ellison family. Against a tense, dynamic backdrop of shareholder discontent, board maneuvering, and regulatory scrutiny, Sarandos and Belloni dig into the strategic, financial, creative, and regulatory stakes for Hollywood’s future.

Key Discussion Points & Insights

1. The War for Warner Bros.: The Bidding Situation

• Deal Status: Netflix had seemingly wrapped the deal for $27.75/share cash plus the value of Discovery Global (the TV unit left behind), but Paramount/Ellison family have been aggressively raising their offer for the whole company.
  • “The Ellisons have been trying to undo it, slowly sweetening their offer, rounding up Middle East money, and when the Warner's board kept rejecting them, they took it directly to shareholders.” (01:20)
• Seven-Day Extension: Warner Bros. board reopened negotiations for a week despite previously indicating support for Netflix, setting up a March 20 shareholder vote.
  • “It’s only for seven days and the Warner's board said it still supports Netflix and has set a March 20 date for its shareholder vote. Just wants to hear what the Ellison's best and final offer is…” (01:49)

2. Why Did Netflix Agree to the Seven-Day Extension?

• Clarifying for Shareholders: Sarandos asserts this extension is for shareholder clarity, not a sign of weakness.
  • “It’s giving the Warner Brothers discovery shareholders exactly what they deserve, which is clarity. The Paramount peace guy…have been out just flooding the zone with a bunch of false info...” (04:43)
  • “They had nine chances to bid. This is their ninth bid, Matt.” (05:10)
• Hostory of Well-Defined Process: Sarandos insists Netflix complied with all processes and won fairly.

3. Industry Anxiety and Market Impact

• Hollywood’s Dilemma: Belloni reiterates skepticism — neither outcome is loved: Netflix would become “by far the dominant player,” or Paramount would create more layoffs by combining legacy studios.
  • “Here you either have one company becoming by far the dominant player, arguably game over for the subscription streaming business, and then the other company is gonna combine two legacy studios and lay off thousands and thousands of people.” (07:02)
• Sarandos’ Rebuttal: Disagrees that Netflix would create a monopoly; frames market as extremely competitive, points to YouTube, linear TV, and fast-growing alternative platforms like Tubi.
  • “The entertainment landscape has never been more competitive.” (07:21)
  • “You could upload your movie to Tubi right now and start getting ad revenue…that business is growing faster than all of us…” (08:44)

4. Regulatory Concerns and Antitrust Scrutiny

• Both Deals Under the Microscope: Sarandos says all mega-mergers get tough scrutiny, and Netflix is deep in regulatory process in both the US and Europe.
  • “Any deal this size would have regulatory scrutiny. This is nothing unusual.” (12:37)
• Sarandos Position: This deal is “pro-consumer, pro-creator, pro-innovation, pro-growth.”
  • “Since we’ve been making our own original things…we’ve driven 150,000 jobs in the US on our productions. $250 billion of economic impact.” (13:35)
• Leveraged Buyout “LBO” Risks: Sarandos repeatedly calls out risks of the Paramount/Ellison bid, citing financial complexity, funding uncertainty, and difficulty integrating.
  • “What gets ignored, Matt, is how dangerous and risky LBOs are.” (14:13)
  • “Our deal is clean with reputable global banks…healthy balance sheet…continue to operate and grow.” (15:21-15:35)

5. Creative Marketplace & Talent Compensation

• Keeping Competition Alive: Sarandos promises Warner Bros. and HBO would operate separately, with both divisions competing for projects even when under the same parent.
  • “When you look at Wuthering Heights…I knew you were gonna go there…They had two choices, they had probably multiple choices. And they will continue to under this deal.” (10:33-10:56)
  • “I’m going to keep Warner Brothers film and television operating largely as it is today. Going to keep HBO running largely as it is today.” (09:38)
• No Change to Warner Bros. Compensation: Confirms he would not alter Warner’s backend participation for filmmakers.
  • “Not changing anything about the Warner Brothers model compensation for filmmakers at all.” (12:05)
• Box Office Reporting Promise: “We will not eliminate box office reporting on Warner Brothers movies.” (30:38)

6. Theatrical Windows & Marketing

• Windowing Commitment: Sarandos says Warner films would maintain the traditional 45-day exclusive theatrical window, followed by PVOD then HBO Max, and will feel “traditional.”
  • “It means 45 days of theatrical exclusivity…” (23:38)
  • “It’ll go from theaters to PVOD to HBO Max.” (23:52)
  • Balks at putting this in writing, arguing it’s not standard or necessary.
• Marketing Spend: Will do competitive marketing for releases, points to Netflix Super Bowl ad for ‘Cliff Booth’ and others; HBO will retain its own marketing budget.
  • “We’ll do competitive marketing spends…our members are on Netflix a couple hours a day, every day. So the best way to talk to our members…is probably on Netflix.” (26:33)
  • “I want [HBO] to continue to be what people fell in love with when they fell in love with HBO.” (28:34)

7. Strategic Motivation and Shareholder Skepticism

• Why Does Netflix “Need” Warner Bros.? Sarandos says Netflix doesn’t “need” Warner Bros., but sees it as an accelerant to its growth, combining Netflix’s tech and engagement with Warner’s legacy and IP.
  • “We don't. We do think that it's an accelerant to an already successful business model. It ensures our continued growth into the next century.” (18:55)
• Shareholder and Market Concerns: Belloni repeatedly presses on Netflix’s falling share price and investor doubts about a major pivot from building to buying.
  • “Why do your investors not like this deal?” (20:15)
  • Sarandos: “I do think the market doesn’t like uncertainty…People are skeptical…We deserve the skepticism, but every time we have pivoted the business…we’re pretty good at it when it’s time to.” (20:45; 21:36)
• Unwillingness to Bid Higher without Discipline: “We have always been very disciplined buyers…happy to see somebody else overpay for it, just like we do for every movie or TV show we do every day.” (33:14)

8. The Political & Regulatory Angle

• Politics and DOJ Concerns: Belloni calls out rumors that the Ellison/Paramount team has a regulatory edge via ties to Trump.
  • “Because Larry Ellison is a huge Trump donor and you have been aligned with Democrats.” (35:44)
  • Sarandos: “This is not a political deal. This is a business deal. The Department of Justice runs it…” (35:48)
• Sarandos' Direct Pitch to National Leadership: Repeatedly frames Netflix as a pillar of American job creation and economic growth.
  • “We’re building a billion dollars worth of production…in New Jersey to protect and create American jobs and keep that production on US soil.” (37:21)

9. Final Pitch: Why Hollywood Should Prefer Netflix

• “Growth vs. Cuts” Argument: Sarandos positions Netflix as the “growth” buyer versus Paramount’s “cutting” proposals.
  • “We have this…For the first time in a long time, Warner Brothers will be in the hands of a company with a great balance sheet…We’re not in the business of cutting. Or you can go the other route…they said they’re going to about $16 billion in cuts.” (40:00)
• Sarandos' Message to Industry Guilds: Urges actors, writers, directors, and industry unions to see Netflix as pro-growth, not pro-cut.
  • “I think this is important for an actor in the Screen Actors Guild…I think they should, on behalf of their memberships, endorse this deal as a path forward for their members.” (41:20)

Notable Quotes & Memorable Moments

• On the relentless nature of the process:
  “They had nine chances to bid. This is their ninth bid, Matt.” (05:10, Sarandos)

• On Hollywood’s unease:
  “Here you either have one company becoming by far the dominant player, arguably game over for the subscription streaming business, and then the other company is gonna combine two legacy studios and lay off thousands and thousands of people.” (07:02, Belloni)

• On creative competition inside a merged company:
  “Of course we would go at it…It’s a very, very natural thing in the natural course of business.” (32:36, Sarandos)

• On theatrical windowing:
  “It means 45 days of theatrical exclusivity… it’ll go from theaters to PVOD to HBO Max.” (23:38 & 23:52, Sarandos)

• On shareholder worries and pivoting strategy:
  “We deserve the skepticism, but every time we have pivoted the business, which, by the way, we’re pretty good at pivoting the business when it’s time to…” (21:36, Sarandos)

• On long-term versus short-term thinking:
  “This is a long game that we’re in…as long as we keep focusing on the long term and not being afraid to do things that are a little painful in the short term to get to the long term outcome, that’s in the best interest of our shareholders.” (38:26, Sarandos)

• Final message to Hollywood:
  “This deal…is very important to have to the entire industry…you go with Netflix…we’re in the business of more. And if [the other] deal ever came to pass, that would be a devastating cut to this industry…could be existential.” (40:00-41:20, Sarandos)

Segment Timestamps

• [02:04] – Sale process reopens, strategic context for the seven-day bidding window
• [04:43] – Sarandos defends the process and refutes claims of unfairness
• [07:02] – Discussion of industry fears and Hollywood’s “lesser of two evils” dilemma
• [09:38] – Sarandos explains intended structure for creative competition post-merger
• [12:37] – Regulatory scrutiny and Sarandos’ “pro-creator” rationale
• [14:13] – LBO and financial risk critique of Paramount bid
• [18:55] – Sarandos answers “why buy Warner Bros.?”
• [20:45] – Shareholder skepticism and internal debate
• [23:38] – The “45-day window” for theatrical releases and windowing specifics
• [30:38] – Box office reporting promise
• [32:36] – Will Warner and Netflix divisions compete on projects?
• [33:14] – “Disciplined buyers” and Netflix’s price strategy
• [35:44] – The Trump/Ellison angle and DOJ politics
• [37:21] – Netflix as a jobs engine, pitch to national economic interests
• [40:00] – Sarandos’ closing argument: growth vs. cuts

Conclusion

With high stakes for Hollywood’s creative community, Sarandos champions Netflix’s bid as pro-growth and low-risk, both operationally and in regulatory terms. Belloni presses him on skepticism around monopoly fears, creative independence, the nature of “traditional” windowing, and the integrity of Netflix’s past promises. Sarandos’ tone is confident and at times confrontational, positioning Netflix as the healthier, more secure steward for Warner Bros. and casting doubt on Paramount/Ellison’s leveraged buyout approach. Despite lingering industry distrust, he repeats: “Netflix is in the business of more, not less,” pledging growth, continuity, and competitiveness for the future of film and TV.

For further listening:

• Key Segments: Regulatory grilling ([12:37–16:30]), Theatrical windowing promise ([23:22–24:44]), Shareholder and Wall Street pressure ([20:15–21:51]), and Sarandos’ pitch to Hollywood unions ([40:00–41:20])