In recent statements, Netflix co-CEO Ted Sarandos addressed rumors regarding the potential acquisition of Warner Bros. Discovery (WBD). During an after-market analyst call, he indicated that Netflix had no intention of bidding for WBD, emphasizing the company’s preference for organic growth over large acquisitions.
Ted Sarandos on Warner Bros. Sale Rumors
On the same day WBD’s board revealed that they had received unsolicited interest from multiple parties, Sarandos articulated Netflix’s position. He stated, “Nothing is a must for us to meet our goals that we have for this business.” His remarks came after Netflix reported its financial results for the third quarter.
Focus on Organic Growth
Sarandos reiterated that Netflix’s strategy favored organic expansion over mergers and acquisitions (M&A). He explained that when evaluating M&A opportunities, Netflix applies a framework that assesses potential value and strategic fit.
- Emphasis on organic growth
- Investing aggressively and responsibly
- Returning cash flow to shareholders
Market Context and Competitive Landscape
The comments from Sarandos followed observations about industry consolidation trends. While many competitors are exploring acquisitions to enhance their positions, Netflix remains focused on sustaining its growth strategy without major purchases.
Industry experts noted that prior mergers did not significantly alter the competitive landscape. For instance, Peters from Netflix mentioned that observing competitors grow through M&A does not affect Netflix’s strategic outlook.
WBD’s Strategic Alternatives
Reports indicate that WBD is contemplating various strategic alternatives to enhance shareholder value. Potential options include:
- Splitting into two separate companies: Warner Bros. and Discovery Global
- Entering a transaction for the entire company
- Executing separate transactions for Warner Bros. and/or Discovery Global businesses
Recently, WBD reportedly rejected an initial bid from Paramount Skydance, which opened the door for interest from Netflix and Comcast. However, CNBC emphasized that Netflix was not interested in WBD’s legacy media assets.
Conclusion
Sarandos concluded by stating that Netflix intends to remain selective in its potential acquisitions. He reaffirmed the company’s stance on legacy media networks, asserting, “We’ve been very clear in the past that we have no interest in owning legacy media networks.”
