Netflix’s decision to acquire Warner Bros. assets Discovery hasn’t changed, co-presidents Greg Peters and Ted Sarandos said in a letter to employees Monday.
The streaming giant secured Warner Bros’ backing earlier this month for the $72 billion deal – which involves TV and movie studios and streaming assets – before Paramount launched a $108.4 billion hostile bid for the entire company.
Netflix is committed to theatrical releases of Warner Bros. films, saying it is “an important part of its business and legacy,” executives say.
“We have not prioritized theatrical releases in the past because that was not our business at Netflix. When this deal closes, we will be in that business,” executives say in the letter, adding that a hostile offer from Paramount Skydance was “entirely expected.”
Despite growing concerns about action by antitrust authorities, Netflix is confident it will secure the approvals, arguing the deal is necessary to compete with YouTube’s dominance.
But competition law experts say the U.S. Justice Department is unlikely to view Netflix and YouTube as direct competitors, given their different content, audiences and business models.
“Even after the merger with Warner Bros, our share in terms of views would only increase from 8 to 9% in the United States – which remains well behind YouTube (13%) and a possible Paramount / WBD combination (14%),” say the executives in the Netflix letter.
The company said the deal would not result in studio closures, given fears of job losses due to the increased use of artificial intelligence technologies in the entertainment industry. Paramount also stated that it had no plans to cut content budgets and intended to run the two studios separately.
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