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Netflix CEO Warns of Hollywood Layoffs After Deal Loss
3 Mar
Summary
- Netflix declined Paramount's bid, citing its debt-heavy nature.
- Sarandos predicts thousands of layoffs and cost-slashing at Paramount.
- Netflix will invest savings into its core business instead of buying.
Netflix co-CEO Ted Sarandos has commented on the recent Paramount Skydance acquisition of Warner Bros. Discovery, which Netflix had also pursued. He revealed that Netflix immediately knew it would not match Paramount's final offer, having capped its own bid at $27.75 per share. Sarandos expressed concern that the significant personal guarantee backing Paramount's deal will necessitate steep cost-cutting measures.
Sarandos specifically warned that Paramount's CEO, David Ellison, is expected to eliminate $16 billion in costs, leading to thousands of job losses and reduced production. He cautioned that this would have a ripple effect across Hollywood's creative workforce. Despite this, Sarandos confirmed that Netflix remains committed to expanding its theatrical presence and will invest the $2.8 billion saved from the withdrawn bid into its core operations, emphasizing a strategy of building rather than buying.
Regarding regulatory matters, Sarandos stated that the Department of Justice inquiry into Netflix's bid is complete and that the company is "in the clear." He dismissed speculation that political resistance influenced Netflix's withdrawal, noting the president's neutral stance. He also highlighted ongoing collaborations with cinema owners and teased upcoming theatrical releases.
