Why Netflix's CEO dropped his bid to buy Warner Bros Discovery and Trump 'didn't care'
Netflix co-CEO Ted Sarandos said Sunday he knew "right away" he would decline to counter Paramount’s winning attempt to buy Warner Bros. Discovery, admitting rival chief executive David Ellison made a superior offer.
Netflix dropped its bid to buy Warner Bros. Discovery on Thursday after the company announced Paramount's latest bid to buy all of its assets, including CNN, was "superior."
"We had a very tight range that we’d be willing to pay and made that offer back when we closed this deal. We hadn’t moved much from that, except for moving to cash, which served to move the deal faster. I’m happy where we got in and happy where we got out," Sarandos told Bloomberg.
"We knew right away, when we got the notice on Thursday that they had a superior offer and the details of that deal," he continued. "We knew exactly what we were going to do."
NETFLIX BACKS OUT OF WARNER BROS BIDDING WAR AFTER PARAMOUNT MADE 'SUPERIOR' OFFER
In December, Warner Bros. announced it had reached a deal with Netflix to buy the Hollywood studio and HBO for $83 billion, prompting Paramount to launch a $108 billion hostile takeover bid for the entire company, including all of its cable assets like CNN, which would have been spun off into a separate company under the Netflix deal.
Sarandos suggested that President Donald Trump was largely interested in the deal because of CNN, the news network that he has long criticized.
"Once it was clear that we weren’t in the CNN business, it was a lot less interesting. He didn’t care that much more about our deal," he said.
Sarandos predicted that Paramount Skydance Corp. will ultimately need to slash a significant number of jobs. His comment came after CNN insiders told Fox News Digital that staffers feel "a mix of despair, apprehension and curiosity" as they await details.
"It would be less production, less people working," Sarandos told Bloomberg.
Paramount's revised offer raised WBD's value to $31 per share, putting the company's valuation at $111 billion. Paramount will additionally pay the $2.8 billion termination fee to Netflix after WBD backed out of their deal.
Ellison's billionaire father, Larry Ellison, is personally backing Paramount's bid, committing $45.7 billion in equity through the Ellison Trust, while Bank of America Merrill Lynch, Citi and Apollo will provide a $57.5 billion debt commitment.
The Netflix honcho also said Paramount has major regulatory hurdles to clear.
"Even when we were thinking about keeping these businesses together and running, we knew that we had a difficult task ahead of integration. I can’t imagine doing all that and trying to cut billions and billions of dollars. Today, Paramount has half of the people that they had one year ago. So that gives you some sense of where this is heading for the town and for the business," Sarandos said.
Last month, Trump called on Netflix to fire board member Susan Rice immediately or "pay the consequences" after the former Obama official warned that corporations she said had "taken a knee" to Republican pressure should not expect forgiveness from Democrats if they return to power.
PARAMOUNT REFUSES TO BACK DOWN IN WARNER BROS. DISCOVERY TAKEOVER FIGHT AGAINST NETFLIX
Sarandos told Bloomberg he spoke with Rice but never considered removing her from the board.
CNN has largely embraced anti-Trump programming for much of the last decade, and the president has responded by publicly criticizing the network on a regular basis. Last year, The Wall Street Journal reported that Ellison told Trump officials that he'd make sweeping changes to CNN if he became its owner.
One CNN insider said they were trying to keep an "open mind" but said it’s easy to understand why staffers are upset given the reporting on Ellison and Trump discussing changes.
"It’s existential for the brand to be owned by an individual who has personal allegiance to a political figure and is not even answering to public markets," they told Fox News Digital.
The White House didn't immediately respond to Fox News Digital's request for comment.
CLICK HERE TO GET FOX BUSINESS ON THE GO
Fox News Digital’s Joseph A. Wulfsohn contributed to this report.