Ted Sarandos, the co-chief executive of streaming giant Netflix Inc. (NFLX), has reassured that the theatrical industry will not be impacted by the company’s $82.7B deal to acquire the streaming and studio assets of Warner Bros. Discovery Inc. (WBD).
In an extensive interview published in The New York Times on Friday, Sarandos said Hollywood critics have misunderstood the company’s intentions ever since the deal was announced but also acknowledged that the concerns they raised about the deal were “rightfully so.”
“I understand that folks are emotional about it because they love it and they don’t want it to go away. And they think that we’ve been doing things to make it go away. We haven’t,” Sarandos commented when asked about the skepticism people had about the new commitment to the theatrical business.
Speaking further on the topic, Sarandos said the general economics of the theatrical business were more positive than he had seen and modeled.
“We weren’t in that business (theatrical) not because we hated it. We weren’t in that business because our business was doing so well,” he said. “I did not get in this business to hurt the theatrical business. I got into this business to help consumers, to help movie fans. I’ve got a great relationship with theater owners.”
Sarandos told NYT that Netflix has historically been a builder and not a buyer of companies, but when Warner Bros. put itself up for sale, turning a blind eye to that would have been “reckless.”
“When this deal closes, we will own a theatrical distribution engine that is phenomenal and produces billions of dollars of theatrical revenue that we don’t want to put at risk. We will run that business largely like it is today, with 45-day windows. I’m giving you a hard number,” Sarandos said. “If we’re going to be in the theatrical business, and we are, we’re competitive people—we want to win. I want to win opening weekend. I want to win box office.”
Sarandos said Netflix has the resources the David Zaslav-run media company has been lacking, and once the deal closes, they will keep Warner Bros. running, releasing movies in theaters the way they always have, and keep HBO completely intact.