Netflix (NFLX) co-CEO Ted Sarandos pushed back on merger speculation Tuesday following Warner Bros. Discovery’s (WBD) announcement that it’s exploring breakup options, including a potential sale of the entire company.
“We’ve been very clear in the past that we have no interest in owning legacy media networks,” Sarandos said on the company’s third quarter earnings call. “There’s no change there.”
His comments came just hours after WBD said it had launched a “review of strategic alternatives” following unsolicited interest from multiple parties, a move that immediately reignited speculation about potential media consolidation across Hollywood.
Companies reportedly under consideration include Paramount Skydance (PSKY), Comcast (CMCSA), and Netflix, though none of the three responded to Yahoo Finance’s requests for comment. Sarandos’s remarks appeared to distance Netflix from that speculation.
Shares of the streaming giant fell about 6% in after-hours trading after the company missed Wall Street estimates on both revenue and profit. The company guided to stronger-than-expected results from the current quarter and reaffirmed its full-year outlook, with revenue expected to come in at the upper end of its $44.8 billion to $45.2 billion range.
Sarandos said Netflix remains focused on organic growth rather than dealmaking, even as the rest of the entertainment industry braces for another round of consolidation.
“It’s true that historically, we have been more builders than buyers,” he said. “We think we have plenty of runway for growth without fundamentally changing that playbook.”
The executive added that while Netflix continues to evaluate potential deals, the streamer applies the same strict lens to each opportunity, weighing questions such as whether a deal would strengthen its entertainment portfolio or strategic goals, and whether it offers better value than building the same capabilities in-house.
“Nothing is a must-have for us to meet the goals we have for the business,” Sarandos said. “We can be and we will be choosy.”
Netflix co-CEO Greg Peters noted that the company has weathered numerous waves of industry consolidation — from Disney’s (DIS) purchase of Fox (FOXA) to Amazon’s (AMZN) acquisition of MGM and the merger between Discovery and Warner Bros.
“None of those mergers were a fundamental shift in the competitive landscape,” Peters said. “Watching some of our competitors potentially grow bigger via M&A does not change [our] view on the competitive landscape. And we don’t think it changes the substance of the challenge that our competitors face.”
