Netflix’s co-CEO finds himself in an unusual position after the company’s latest earnings report: On the back foot.
The streaming pioneer’s decision to sink nearly $83 billion into Warner Bros. assets marks a significant departure from the company’s longtime mantra: build, don’t buy.
Investors are still not buying it.
Shares were under pressure even before Netflix made an offer for Warner Bros. Discovery’s studio and streaming assets.
The stock, which has fallen more than 15% since Netflix launched its first offering on Dec. 5, fell nearly 8% in premarket action on Wednesday as co-CEOs Ted Sarandos and Greg Peters had to explain their aggressive push, which has forced them to suspend share buybacks.
Sarandos noted how tech giants like Alphabet’s YouTube had changed what it means to watch television, forcing Netflix to change strategies to move forward. The two said they did not expect to make an offer for Warner’s assets when they first began the due diligence process.
“When we got into the hood, we saw a lot of things that were really exciting,” Peters said.
Netflix is ​​trying to stay ahead of Paramount Skydance with an $82.7 billion all-cash offer for Warner Bros.’s film and television studio, its extensive content library and major entertainment franchises including “Game of Thrones” and “Harry Potter.”
“We’ve often debated building a theatrical business throughout our Netflix history, but we were busy investing in other areas, and it never became a priority of ours. But now with Warner Bros., they’ve brought in a mature, well-run theatrical business with amazing movies, and we’re super excited about that addition,” he said, contrasting Netflix’s prior position that theatrical was an old model in which viewers preferred streaming while staying at home.
“And then you get to the streaming side of things, HBO. It’s an amazing brand. It says prestige TV is better than almost anything else. Customers know it. They love it. They know what it means,” Peters said, adding that Warner’s television studio was also a healthy business and complemented Netflix’s own, expanding its production capacity.
With an expensive deal hanging over its head, Netflix delivered a sluggish revenue rate for what was typically one of its strongest quarters, and forecast equally bleak prospects for the new year.
Analysts said a strong content line-up, including the final season of the hit sci-fi series “Stranger Things,” helped drive revenue growth, but higher costs associated with the Warner Bros. acquisition have made people skeptical about the long-term payout.
Netflix previously said it had received commitments for a $59 billion bridge loan to support the Warner Bros. deal. On Tuesday, it increased a bridge loan commitment to $8.2 billion to support its all-cash $27.75 per share offer.
The deal is expected to face considerable scrutiny from lawmakers and competition regulators as high-profile acquisitions threaten to monopolize the market and leave consumers with fewer choices.
But Sarandos moved to downplay those concerns on Tuesday, reiterating that the deal would be “pro-consumer” and “pro-worker,” and that the acquired businesses would require new teams and more opportunities for creative people.
He said, “This deal allows us to gain access to Warner Bros.’s 100 years of deep content and IP to develop and distribute in more cost-effective ways that will benefit consumers and the entire industry.”
published – January 22, 2026 11:29 am IST