Netflix Co-CEOs Defend $82 Billion Warner Bros. Acquisition: Promise 'No Layoffs' And A New Commitment To Theaters

Netflix's co-chief executives, Greg Peters and Ted Sarandos, sought to ease worries within the company and the broader industry by outlining their vision for the proposed acquisition of key Warner Bros Discovery Inc. assets in an internal letter to staff on Monday.

In an internal letter to staff on Monday, the executives sought to ease worries across the entertainment sector regarding potential layoffs and a shift away from cinema screenings, as reported by Bloomberg.

“We haven’t prioritised theatrical in the past because that wasn’t our business at Netflix,” the co-CEOs wrote on Monday. “When this deal closes, we will be in that business.”

The pair emphasised their dedication to continuing Warner Bros. film releases in theaters, countering speculation that Netflix would favor direct-to-streaming premieres. This comes despite Sarandos' earlier remarks characterising the movie theater experience as outdated.

No Layoffs Promised: Focus on Growth and Job Support

Peters and Sarandos also assured there would be minimal disruption to employment, according to Bloomberg report.

They pledged “no overlap or studio closures” in light of broader industry anxieties over workforce reductions, exacerbated by streaming's dominance and advancements in artificial intelligence.

“This deal is about growth,” the pair wrote. “We’re strengthening one of Hollywood’s most iconic studios, supporting jobs and ensuring a healthy future for film and TV production.”

Confidence in Deal Despite Higher Paramount Offer

The Netflix leaders expressed optimism about their $82.7 billion agreement, reached on Dec. 5 and including assumed debt, even as Paramount Skydance unveiled its rival bid on Dec. 8.

Paramount's hostile tender targets the full Warner Bros. entity including units like cable news operations that Netflix has no interest in acquiring and values it at $108.4 billion, offering shareholders a greater immediate payout.

“It was entirely expected,” they said of the Paramount offer. “But, we have a solid deal in place.”

Regulatory Hurdles: Netflix Highlights Market Share Data

A key challenge remains antitrust approval from regulators. To bolster their case, Peters and Sarandos referenced Nielsen viewing share statistics, noting that a merged Netflix-Warner Bros. entity would hold a lower percentage than YouTube alone or a hypothetical Paramount-Warner combination, as noted by Bloomberg in its report.

Democratic Sen. Elizabeth Warren of Massachusetts has criticised Paramount's approach as a “five-alarm antitrust fire,” while previously labeling Netflix's proposal an “anti-monopoly nightmare,” per Bloomberg reporting.

If cleared, the transaction would hand Netflix control of one of Hollywood's legendary studios and its influential HBO brand in what stands as a landmark media consolidation. 

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