Netflix Insists Its Warner Bros. Megadeal Will Save Hollywood, Not Consume It
Netflix wants everyone to take a deep breath and chill. According to the company’s top brass, the plan to swallow Warner Bros. and HBO Max whole for a casual $82.7 billion is actually good news for Hollywood, great news for jobs, and definitely not the beginning of a very expensive streaming monoculture. If that sounds comforting, congratulations, you might already be ready for your executive badge.
Ted Sarandos and Greg Peters, the co-CEOs of Netflix, sent out a memo to employees doing some preemptive damage control after Paramount Skydance decided to crash the party.
Just three days after Netflix announced its massive deal on December 5, David Ellison and company rolled up with a hostile $30 per share offer that values Warner Bros. Discovery at an even chunkier $108.4 billion. Because nothing says holiday cheer like billion dollar corporations fighting over a movie studio.
Sarandos and Peters, clearly unfazed, told employees that this was all part of the plan. Or at least part of the vibe. Addressing Paramount’s move, they wrote, “It was entirely expected. But, we have a solid deal in place.
“It’s great for our shareholders, great for consumers, and a strong way to create and protect jobs in the industry. We’re confident we’ll get it over the finish line — and we’re genuinely excited about what’s ahead.”
The memo surfaced via an SEC filing and came from Netflix’s internal Take 5 blog. Naturally, someone asked the question everyone outside the executive suite is already yelling into the void.
Are we watching the end of Hollywood in real time. Netflix insists we are absolutely not. In the Q & A section of the memo, Sarandos and Peters responded:
“This is something that we’ve heard for a long time — including when we started the streaming business. Our stance then and now is the same—we see this as a win for the entertainment industry, not the end of it.
“This deal is about growth: Warner Bros. brings businesses and capabilities we don’t have, so there’s no overlap or studio closures. We’re strengthening one of Hollywood’s most iconic studios, supporting jobs, and ensuring a healthy future for film and TV production.”
If that sounds familiar, it’s because every massive media merger for the past 30 years has promised the same thing right before everyone quietly updated their résumés. Still, Netflix is sticking to the message that this is about growth, not consolidation, and definitely not about owning everything you watch forever.
The co-CEOs also doubled down on their confidence that regulators won’t stand in the way and reassured employees that Warner Bros. movies will still hit theaters. The theatrical experience isn’t going anywhere. Pinky swear.
“Theatrical is an important part of [the Warner Bros.] business and legacy, and we don’t want to change what makes Warner Bros. so valuable. If this deal had happened two years ago, hits like Minecraft and Superman would still have premiered on the big screen as they did — and that’s how we plan to keep it.
“We haven’t prioritized theatrical in the past because that wasn’t our business at Netflix. When this deal closes, we will be in that business.”
That’s reassuring in the same way someone telling you they just learned how your job works is reassuring. But sure, theaters are safe. For now.
Looking ahead, Sarandos and Peters emphasized that a small team is handling the deal so everyone else can stay focused on Netflix’s big plans for 2026 and beyond. Because nothing helps you ignore industry panic like pretending it’s business as usual.
“We’ve got a small but mighty team of experts working on this so the rest of us can stay focused on the big 2026 ambitions we’ve established for our business,” Sarandos and Peters write.
“We’ve got huge potential still ahead of us — even before we factor in Warner Bros. — so our focus should remain on realizing that potential based on our organic growth. We know that’s easier said than done with all the headlines and speculation, but continuing to deliver for our members is the best thing we can focus on.”
So there you have it. Netflix says everything is fine, Hollywood is safe, jobs are protected, theaters will survive, and this is all somehow a win for everyone involved. If you’re skeptical, you’re probably not alone.
But, don’t worry. According to Netflix, this isn’t the end of the entertainment industry. It’s just the part where it gets really interesting.
Red the full memo below:
OUR DEAL WITH WARNER BROS
By: Greg Peters and Ted Sarandos
As news around our deal with Warner Bros. continued this week, we wanted to keep you as informed as we can. Our position hasn’t changed: we strongly believe that Netflix and Warner Bros. joining forces will offer consumers more choice and value, allow the creative community to reach even more audiences with our combined distribution, and fuel our long-term growth. We made this deal because their deep portfolio of iconic franchises, expansive library, and strong studio capabilities will complement—not duplicate—our existing business.
This is going to be a complex process over the next year or so and there’s a lot we won’t be able to share, but we did want to give you our thoughts on some of the most pressing questions we’ve heard since we connected last week.
How do we feel about Paramount’s hostile bid? It was entirely expected. But, we have a solid deal in place. It’s great for our shareholders, great for consumers, and a strong way to create and protect jobs in the industry. We’re confident we’ll get it over the finish line—and we’re genuinely excited about what’s ahead.
Are we confident regulators will approve? We believe in this deal—in the value it creates— and we’re confident we’ll get the approvals we need to make it happen. The fundamentals are clear: this deal is pro-consumer, pro-innovation, pro-worker, pro-creator, and pro-growth. Also, if you look at it through the lens of Nielsen data, even after combining with Warner Bros., our view share would only move from 8% to 9% in the US—still well behind YouTube (13%) and a potential Paramount/WBD combination (14%). We believe the facts speak for themselves, and we’re fully prepared to put ourselves in a strong position for approval.
Will we preserve theatrical releases as part of WBD’s distribution model? Yes—we’re fully committed to releasing Warner Bros. movies in theaters, just as they do today. Theatrical is an important part of their business and legacy, and we don’t want to change what makes Warner Bros. so valuable. If this deal had happened two years ago, hits like Minecraft and Superman would still have premiered on the big screen as they did—and that’s how we plan to keep it. We haven’t prioritized theatrical in the past because that wasn’t our business at Netflix. When this deal closes, we will be in that business.
Some feel this is the end of Hollywood. What’s our response to that? This is something that we’ve heard for a long time—including when we started the streaming business. Our stance then and now is the same—we see this as a win for the entertainment industry, not the end of it. This deal is about growth: Warner Bros. brings businesses and capabilities we don’t have, so there’s no overlap or studio closures. We’re strengthening one of Hollywood’s most iconic studios, supporting jobs, and ensuring a healthy future for film and TV production.
What’s next? We’ve got a small but mighty team of experts working on this so the rest of us can stay focused on the big 2026 ambitions we’ve established for our business. We’ve got huge potential still ahead of us—even before we factor in Warner Bros.—so our focus should remain on realizing that potential based on our organic growth. We know that’s easier said than done with all the headlines and speculation, but continuing to deliver for our members is the best thing we can focus on.
Where is the best place to follow along? As a reminder, Take 5 is for employees only. We’ve launched a public site as our source of truth for external audiences—which will be updated further—and it’s a resource you can share with friends and family who might have their own questions. You can also listen to our UBS webcast from earlier this week.
-Greg and Ted