Netflix leaders Ted Sarandos and Greg Peters sent a memo to staff on Monday. They confirmed the $82.7 billion purchase of Warner Bros and HBO Max. The deal promises new studios, iconic franchises and a larger content library. It also puts Netflix in direct competition with Paramount Skydance, which has offered $30 per share for the same assets.
CEO Memo Addresses Industry Concerns
In the memo the co CEOs answered a question about rumors that the deal could end Hollywood. They wrote that the move is a win for the entertainment industry, not its end. They emphasized that Warner Bros adds capabilities Netflix does not have, so there is no overlap or studio closures. The memo also highlighted job protection and growth for shareholders and consumers.
Response to Paramount Skydance Bid
Paramount Skydance launched a hostile bid three days after the Netflix announcement. Sarandos and Peters said they expected the challenge. They reassured employees that the Netflix Warner Bros deal remains solid and that they will stay focused on delivering value.
Regulatory Outlook and Theatrical Commitment
The CEOs expressed confidence that regulators will approve the merger. They noted that the combined market share would rise only slightly, keeping Netflix behind YouTube and a possible Paramount/WBD combination. They also promised to keep Warner Bros movies in theaters. The memo stated that theatrical releases are a core part of Warner Bros’ legacy and will continue unchanged after the deal closes.
Maintaining Theatrical Releases
Netflix will respect the existing theatrical schedule for Warner Bros titles. The leaders gave examples such as Minecraft and Superman, saying those films would still premiere on the big screen. They added that Netflix will now enter the theatrical business as part of the acquisition.
Looking Ahead to 2026 Goals
Sarandos and Peters outlined a roadmap toward 2026. They said a small expert team handles the complex integration while the broader staff focuses on organic growth. They believe the partnership unlocks huge potential even before adding Warner Bros assets. Their message to employees was clear: keep delivering for members and the company will achieve its ambitious targets.
Read the full memo from the Netflix leaders for more details on strategy, regulatory expectations and the future of streaming and theatrical releases:
Read the full memo from Sarandos and Peters:
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
Source: Variety
