As Netflix stock continues to face pressure amid its $83 billion pursuit of Warner Bros. streaming and studio assets, co-CEO Ted Sarandos blamed the recent volatility largely on the ongoing bidding war with Paramount, as well as general uncertainty across the industry and around the “AI trade.”
That pressure has raised questions about just how high Netflix may be willing to counter as Paramount has been given the opportunity to present its “best and final” offer for all of WBD by Feb. 23.
“There has been some headwind in the stock. There’s been some headwind in the sector and there’s been some headwind for because of the AI trade, which I think is ironic, because I think AI will be an amazing creator tool to actually make the entertainment business bigger and better than ever. So I do think those things have got to play out,” Sarandos said during an interview with Bloomberg on Thursday. “[Investors] don’t like uncertainty. There’s concern about bidding wars and all those things. We have always been an incredibly disciplined buyer and we will continue to be one here.”
Since the Warner Bros. deal announcement, Netflix shares have fallen more than 30%. The stock, which is trading at around $76 per share on Thursday, is down 15% year to date, 12% in the past month and 36% in the past six months.
Some investors have expressed concern that Netflix is pursuing Warner Bros. due to stalling engagement growth. In the second half of 2025, Netflix subscribers watched 96 billion hours of content on the service, up just 2% year over year. But Sarandos was quick to disagree.
“They’re incorrect. They’re reading it wrong,” he said. “Our engagement did go up [in the second half of 2025]. It went up a couple of billion hours. Viewing hours is one component of engagement and certainly one component of the value of engagement.”
He added that Netflix’s business model “very much works” and that its “very confident” that it would “continue to operate this business well.”
“This Warner Brothers acquisition is an accelerator that model, and it also future proofs that model for decades to come,” he said.
In addition to defending Netflix’s business model, Sarandos also pushed back on the claim that Paramount has a clearer path to regulatory approval due to a cozy relationship with the Trump White House.
“I don’t know why the Ellison’s intimate that they have some direct line to the Department of Justice for clear, for faster path of clearance. But I doubt that they do,” he said. “This is a process that is being run by the Department of Justice. The President has been very clear on that. We’ve been very clear on that. The Department of Justice published in 2023 the guidelines for mergers that they’re following right now. So that’s what’s happening here. This is a business deal that not a political deal.”
Both Paramount and Netflix are engaging with regulators, including the Department of Justice and European Commission. Sarandos also said the company is in conversation with the Hollywood unions, movie theater owners and state attorneys general as its Warner Bros. deal has faced pushback over its potential implications on consumer prices, competition, jobs in Hollywood and the future of the theatrical business.
Netflix has said it could close a Warner Bros. deal within 12 to 18 months, pending regulatory approval, while Paramount has said a potential deal with WBD could close within a year.
“This is a process that we’re very confident that we’re going to navigate. And in fact, I’d say, when you look at these deals that are out there, I think people would like the status quo and we have a long history of running the business well and pivoting when it’s time to and adding new business lines,” Sarandos said. “People don’t like change, they don’t like any degree of uncertainty and anytime there’s a new deal, there is regulatory scrutiny, there is execution risks, all those things, but we are highly confident that we can closely integrate the business.”
He added that Paramount has been spreading misinformation around the regulatory process and that granting a waiver to reopen talks with Warner’s board is designed to help prove that its deal is superior to Ellison’s hostile takeover bid.
“We’re trying to say, ‘take seven days and get some clarity,’ because what we believe and what the Warner Brothers Discovery Board agrees with us on as well is that our deal is a superior deal,” Sarandos concluded. “We believe it’s good for them. It’s good for us and we’re excited about getting it done.”
