Netflix co-CEO Ted Sarandos firmly addressed merger speculations on Tuesday following Warner Bros. Discovery’s (WBD) announcement regarding its exploration of breakup options, including a possible sale of the entire company. During the company’s third quarter earnings call, Sarandos emphasized that Netflix has no interest in acquiring legacy media networks, reiterating, “There’s no change there.”
His statement came shortly after WBD disclosed a “review of strategic alternatives” in response to unsolicited interest from various parties, prompting fresh speculation about possible media consolidation in Hollywood. Reports have suggested potential companies under consideration, including Paramount Skydance, Comcast, and Netflix. However, none of these companies have commented on the situation, and Sarandos’s remarks seemed to distance Netflix from these merger talks.
Despite a 6% drop in Netflix’s shares during after-hours trading—resulting from the company falling short of Wall Street’s expectations for revenue and profit—Sarandos pointed out that the company is optimistic about the current quarter. He affirmed Netflix’s full-year forecast, anticipating revenue will fall within the upper range of $44.8 billion to $45.2 billion.
Sarandos reinforced Netflix’s focus on organic growth over acquisitions, stating, “It’s true that historically, we have been more builders than buyers.” He expressed confidence that there is ample opportunity for growth without altering this strategy, highlighting that Netflix remains selective when considering any potential deals. The company assesses whether a deal aligns with its entertainment portfolio or strategic objectives and determines if building similar capabilities in-house would provide better value.
In addition to Sarandos, Netflix co-CEO Greg Peters reflected on how the company has adapted through various industry consolidations, referencing Disney’s acquisition of Fox, Amazon’s purchase of MGM, and the merger of Discovery and Warner Bros. He noted that these mergers did not significantly alter the competitive landscape, asserting that any growth among competitors through mergers and acquisitions does not change the fundamental challenges they face.
With a cautious yet optimistic outlook, Netflix aims to stay true to its core strategy of organic growth as it navigates through a rapidly evolving media landscape.