Netflix co-CEO Ted Sarandos made a stunning prediction after the company dropped its bid to acquire Warner Bros. in a new interview with Bloomberg on Sunday.
Netflix and Paramount Skydance, a media conglomerate run by the Trump-supporting Ellison family, were in a heated battle to acquire Warner Bros. studios and HBO Max until late February, when Netflix pulled out of the running. That move paved the way for Paramount to acquire Warner Bros. in a multi-billion-dollar deal, financed primarily through debt.
Sarandos described Paramount's bid for Warner Bros., which owns assets like CNN, as "unusual" and "irrational." He added that Paramount's acquisition of the company could be a seismic event for the U.S. media landscape.
"This deal is dependent on a lot of cost-cutting," Sarandos told Bloomberg. "We were in the books of Warner Bros., and the biggest cost centers are people in productions. There’ll be cuts in excess of $16 billion. They are telling people who lend them the money that’s gonna happen in 18 months or so. It would be less production, less people working."
Sarandos added that it will be "fascinating" to see what happens next after the acquisition is official.
"I have been on the record a lot in the last two weeks talking about what I think the future looks like," Sarandos said. "I’m confident in our future that we’re not impacted by all that. In fact, maybe it’s to our advantage. But I hope I’m wrong for the sake of the industry."
