Top bosses at Netflix (NFLX), Greg Peters and Ted Sarandos, are committed to releasing Warner Bros. movies in theaters, following concerns that the company would prioritize a streaming-first model, Bloomberg reported on Monday, citing an internal letter.
The co-CEOs made their case for the Warner Bros. deal in a letter sent to employees that aimed at addressing the hostile takeover bid from rival Paramount Skydance (PSKY) and easing industry concerns about job losses and the end of theater releases.
“This deal is about growth,” the co-CEOs said in the letter. “We’re strengthening one of Hollywood’s most iconic studios, supporting jobs, and ensuring a healthy future for film and TV production.”
“We haven’t prioritized theatrical in the past because that wasn’t our business at Netflix,” they said. “When this deal closes, we will be in that business.” They also promised “no overlap or studio closures.”
Netflix has offered a mix of cash and stock for the Warner Bros. studios, streaming, and HBO businesses in a deal with an equity value of $72B and is confident their deal will clear. Paramount wants to buy out the whole company in a $108.4B transaction, which also includes debt.
“It was entirely expected,” they said of the Paramount offer. “But, we have a solid deal in place.”