When Netflix co-CEO Ted Sarandos left the White House on Feb. 26, journalists tracking the streamer’s bid to buy Warner Bros.’ storied movie and TV studios, along with HBO Max, scoured photographs capturing his every expression, from the slightest hint of defeat to a smile. Ultimately, he looked like the cat who ate the canary.
That interpretation isn’t so far off the mark, according to the first interview Sarandos has given, to Bloomberg, since Netflix unveiled that it was pulling out of its $82.7 billion proposed deal minutes after Sarandos drove away from 1600 Pennsylvania Ave., rather than try to match a sweetened bid submitted by David Ellison’s Paramount, valued at $110 billion. That includes taking on more than $95 billion in debt, making it the largest leveraged buyout in history in a move that could disrupt Hollywood to its core and result in massive layoffs.
Many assume that Ellison’s father — Oracle founder and Trump friend Larry Ellison, who is among the world’s richest men — will always provide a life raft, although he’s already personally guaranteed more than $57 billion of the debt.
Many have also assumed Trump himself would ultimately be the judge and jury in terms of which bidder WBD went to by exerting pressure on regulators. The one property Trump cares most about is CNN, which would have been spun off with other cable networks. Paramount wants the whole company.
“From the beginning of this, I knew there was a very sexy idea that he was going to make the call. It was never the case. It was very clear from our first discussion that he never intended that to be the case,” Sarandos said. “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.”
In recent days, Trump did use his fiery rhetoric to call on Netflix to fire top Democrat and former Obama official Susan Rice from the company’s board after suggesting that companies that succumb to Trump — as Ellison’s Skydance has done with the Paramount-owned CBS News — could regret it once Democrats are back in power. “I don’t want or expect our board members to be out talking about politics ever, let alone in the middle of a deal, but they do have the right to speak, and she wasn’t speaking for Netflix,” the exec said. He shared that he relayed these concerns to Rice, but said he never considered letting her go.
Netflix has been heavily scrutinized for not exactly being known as a team player when it comes to giving its films a traditional theatrical run. But times have changed so drastically since the pandemic that Netflix told lawmakers and others it would abide by a 45-day exclusive run in theaters if it were to own Warner Bros. (last year, at least half of all studio releases had an even shorter window, with the shortest being three weekends, or 17 days).
One major bonus: Sarandos says going through this process has opened a level of dialogue with theater operators that haven’t been excited before. “One thing that’s been great about it is getting to know and having open dialogue with the theater owners. I really didn’t have much reason to before,” he said. “We’ve figured out some really creative things to do together, as you saw withStranger ThingsandKPop Demon Hunters. We haveOne Piecein theaters next week in the U.S. and Japan. I think we’re going find a bunch of cool things to do together going forward. I could see us doing things that we haven’t done before.”
He also agreed that “unusual” is one word to describe Ellison.
“Unusual, yeah, unusual, irrational, whatever words you want to use in that,” he said. “It’ll be fascinating to see the next steps. I have been on the record a lot in the last two weeks talking about what I think the future looks like. 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.”
Beating out Netflix wasn’t the only major milestone for the young Ellison and the industry veterans he’s installed at Paramount, including Motion Group co-chairs Josh Greenstein and Dana Goldberg, whose team across marketing and distribution successfully opened Scream 3 over the Feb. 28-March 1 weekend to a record-shattering $64 million domestically and north of $100 million globally. Spyglass fully produced the slasher pic, with Paramount putting up half the budget.