Ted Sarandos Accuses Paramount Of “Flooding The Zone With Confusion” In WBD Merger Saga

Netflix Co-CEO Ted Sarandos took aim Tuesday at Paramount‘s rival bid for Warner Bros. Discovery, accusing the David Ellison-led company of “flooding the zone with confusion for shareholders.”

The exec sat for a CNBC interview at the end of an eventful day in the months-long battle for control of Warner. (Watch the interview above.)

Netflix last December firmed up a proposed deal to acquire the studios-and-streaming unit of WBD for $82.7 billion. Paramount has made multiple hostile bids for all of WBD, appealing directly to shareholders, who will vote next month on the Netflix proposal. On Tuesday, the companies announced that the WBD board would negotiate for seven days with Paramount, which has indicated it could raise its bid.

Sarandos said Netflix assented to the short window of re-opened talks because Paramount has been “making a ton of noise, flooding the zone with confusion for shareholders, so they don’t really understand the deal, including floating all these hypothetical offers and talking directly to the shareholders and bypassing the Warner Bros. Discovery board.”

The short window, which Paramount called “unusual,” gives the company a chance “to get those shareholders exactly what they deserve,” Sarandos said, “which is complete clarity and certainty about what the value of these deals are.” With both parties insisting theirs is the better scenario, the new round of talks will offer Paramount “seven days to put their money where their mouth is.”

With many months of regulatory scrutiny remaining, the merger battle is far from over. And Sarandos acknowledged that the deal is not being embraced by many corners of Hollywood, given the many rounds of cutbacks and consolidation the industry has seen in recent years.

“Before, I think, people would say the preference would be there be no deal. … That’s what the unions would like. That’s what a lot of folks would like – no deal,” Sarandos said. “But the Warner Bros. Discovery board has determined it was in their long-term best interest to sell these assets. So there is going to be a deal. So that’s why you have to look at these two deals and compare and contrast – one that’s going to keep the industry going and keep reinvesting with a healthy balance sheet.”

Media mergers “don’t have a great history,” the exec acknowledged. “If you look at the Disney-Fox merger, they went from making 33 movies a year to making about 20. That’s a bad outcome. And that’s exactly what Paramount is proposing in their bid. What we’re doing is keeping them alive. We are investing in them at the rate that they’re producing films today, plus what we’re releasing for Netflix today, and growing that business.”

On the regulatory front, Netflix has insisted it should be evaluated in the context of all companies vying for consumer attention, not just the subscription streamers and pay-TV programmers who compete with the streaming giant for projects. “We compete on the battlefield that is the television,” Sarandos said. “People sit down, they pick up their remote control, they open up the home screen, there’s a bunch of apps and people choose what to watch. And YouTube sits right there with everybody else, and people choose to do it. And they pay for it sometimes with subscription, sometimes with advertising, same as Netflix and everybody else. It is part of a much bigger, more competitive landscape than it ever was before. So that narrow definition that you’re talking about is not realistic.”