Sarandos Shrugs at Paramount-Warner Bros. Merger Threat

Ted Sarandos says he is not worried about a combined Paramount-Warner Bros. Speaking Wednesday at the Bloomberg Screentime conference, the Netflix co-CEO dismissed the competitive threat posed by the merger, which received final court approval the same day.

"It's looked on paper so far it's one and one," Sarandos said of the two companies' streaming services. "So I don't know if one and one is two, or one and one is one and a half, or one and one is three."

The deal, along with a new corporate structure that reportedly includes HBO/HBO Max content chairman Casey Bloys taking over Paramount+ alongside HBO Max, is expected to be announced next week.

Sarandos also addressed rumors that he had been courting Bloys for a job or production deal at Netflix. "He's a good guy. For some reason, we had a very well-publicized lunch. We have eaten together many times … He's going to be in a very good position wherever he does. He's a super talented guy," he said.

No regrets on Warner Bros. Discovery

Asked whether he regretted Netflix's bid for Warner Bros. Discovery, Sarandos was unequivocal. "No, I think the plan was solid," he said. "We won the deal at some point, so we priced it right. At our scale, that was the top price point where I thought we could return value to our shareholders with that asset. Any more than that, I thought we'd be taking into negative territory, even with our scale."

He acknowledged the bid complicated the company's story. "The deal itself kind of threw the business narrative off for investors, for the press, for other folks. You have to be willing to put the business narrative at risk for something that's good for the long term of the business," Sarandos said.

On Trump and a federal tax credit

Sarandos defended Donald Trump on the question of a federal production tax incentive. "For everything else you might think, he is a guy who really cares about the entertainment business, and he cares about protecting the industry and creating jobs, and he loves creating jobs in the entertainment business in America," Sarandos said. "We talk a lot about how that could work and what's the upside and the downside of that."

He argued that a federal incentive layered on top of state programs could claw back production from abroad. "We've shot in all 50 states, so we understand where it works and where it doesn't, where these incentives actually do create jobs and where they don't," he said. "A good chunk of the production in America has gone to the U.K. because it's a very big, very attractive incentive. Public companies have a fiduciary responsibility to deliver the most they can for the money, so they chase those incentives all over the place. In the U.S., the states compete with each other for that, but they do not compete well with other countries for it in total."

Sarandos singled out New Jersey as the most competitive state for production incentives, and warned that California is falling behind. "I just think over the years, California got complacent that the talent was here," he said. "They let the infrastructure age. They make it very difficult to shoot in the city of Los Angeles. I tell you, we just finished the David Fincher's movie ('The Further Mis-Adventures of Cliff Booth') and it was no walk in the park."

Slower growth, live programming headwinds

Sarandos conceded that Netflix's user engagement grew only 2% year over year in the first half of 2026. "Yes, overall, we're not growing as fast as I want us to, and we're working on making that move faster," he said. "We are, though, also doing things that create a lot of headwind to that number. Meaning, when we do live programming on Netflix, which is a relatively new thing, we spend about 5% of our content budget on live events. They generate about 1% of our watching."

He pointed to revenue as the healthier signal. "We are growing the business," he said. "This past quarter, we did double-digit revenue growth in every region of the world. So the business is great and growing fine."

On adding content beyond podcasts, Sarandos cited Netflix's distribution deal in France with TF1. "We should be much more nimble to be able to add new ways to watch on Netflix over time," he said.

Playing with theatrical windows

Netflix is also rethinking theatrical release strategy. "La Bola Negra" opens in October with the longest theatrical runway in the streamer's history, and Greta Gerwig's "Narnia: The Magician's Nephew" will become the first Netflix release to receive a conventional theatrical rollout next year, with a 49-day window preceding its April 2 streaming debut.

"So what we're doing is looking at this model and saying, OK, how do we serve movie lovers who may want to see this movie in a theater, and how do we not harm value to Netflix?" Sarandos said. "Last year, we put over 30 movies in the theaters, all with bespoke plans of how many days are going to be out, how much marketing to spend, what cities to play them in."

He described a two-track approach: art house titles like "La Bola Negra" and last year's "Train Dreams" "could have played in the theaters for six months," while four-quadrant family films get wide releases. "So we're going to do a big wide release for 'Narnia' next year, and we'll do a big wide release for 'Charlie vs. the Chocolate Factory' at the end of the year. We think they'll do great, and when the 'K-pop Demon Hunters' sequel comes, you could expect a very broad theatrical release," Sarandos said. With the merger's new structure expected next week, the streaming landscape Sarandos is competing in will soon have one fewer major rival — or one much larger one.