Did Netflix walk away from Warner Bros. Discovery because of money? Or because of politics?
Money, says Netflix boss Ted Sarandos. Just money.
Sarandos, the streamer’s co-CEO, says Netflix pulled out of the WBD bidding war — ultimately won by Larry and David Ellison’s Paramount — because Netflix didn’t want to raise the price it would pay for WBD’s studio and HBO business.
The fact that the proposed Netflix/WBD deal was getting pushback from Republicans in Washington — and other regulators in the US and around the world — was not an issue, Sarandos said in an interview this weekend.
“I still believe in all the positives. I just believed in them up to $27.75 a share,” Sarandos told Bloomberg, referring to the price Netflix originally agreed to pay for WBD’s studio business and HBO unit in December.
I don’t know that Sarandos’ argument will entirely sway those who think the Ellisons’ attempts to court President Donald Trump and other Republicans had an impact on Netflix’s calculus. David Ellison, for example, attended last week’s State of the Union address as the guest of Trump ally Sen. Lindsay Graham.
Adding fuel to those theories: Netflix announced that it was withdrawing from the WBD auction shortly after Sarandos visited the White House on Thursday. But Sarandos says nothing in that meeting had anything to do with his decision. “It was a very productive meeting, nothing out of the ordinary,” he said.
Instead, Sarandos said, Netflix had already decided to bow out earlier that day, as soon as WBD told the company that Paramount’s most recent bid was a “superior proposal.” Just about everyone in the media world expected Netflix to counter that offer with a new one of their own.
But asked repeatedly about what role Trump and any other politician had in his decision, Sarandos insisted that the answer was zero.
“Things have been going exactly the way they should,” he said, arguing that “the president stayed completely neutral on this.”
This is also what Sarandos had said for the last few weeks, when asked if politics and/or Trump’s preferences would influence the deal. That made sense at the time — why complain about politics at the same time you’re trying to woo politicians?
And it may continue to make sense, given that Netflix may end up back in Washington in the future, asking for a sign-off on a different deal. (Sarandos did say it was “unlikely” he would try to buy something else in the next year or so.)
But what about Trump’s interest in the fate of CNN, which is currently owned by WBD, and which will become part of Paramount, assuming the deal closes? Trump had previously announced that it was “imperative that CNN be sold”.
Follow that idea to its logical conclusion, and it would mean that Trump would favor the Paramount bid, since it was for all of WBD, including CNN. The Netflix bid didn’t include the news network or WBD’s other basic cable channels.
“Once it was clear that we weren’t in the CNN business, it was a lot less interesting. He didn’t care that much more about our deal,” Sarandos said.
I wanted to make sure I understood what Sarandos was saying: Was it that once Trump realized Netflix didn’t want to buy CNN, he didn’t support Netflix buying any part of WBD? Or was it that once Trump realized Netflix didn’t want to buy CNN, he became less interested in its outcome, period?
The latter, a Netflix rep told me Sunday.
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