Netflix's decision to acquire assets from Warner Bros Discovery has not changed, its co-CEOs Greg Peters and Ted Sarandos said in a letter to employees today.
The streaming giant won Warner Bros' vote earlier this month, securing a $72 billion equity deal for its TV, film studios and streaming assets before Paramount launched a hostile $108.4 billion enterprise bid for the whole company.
Netflix is committed to theatrical releases of Warner Bros' movies, saying it is "an important part of their business and legacy".
"We haven't prioritised theatrical in the past because that wasn't our business at Netflix. When this deal closes, we will be in that business," the letter said, adding that a hostile bid from Paramount Skydance was "entirely expected".
Despite growing concerns of heavy regulatory scrutiny, Netflix is confident it will get the approvals, relying on its argument that the deal is necessary to compete with the dominance of YouTube.
But lawyers say the Justice Department is unlikely to see Netflix and YouTube as interchangeable rivals, given their different content, audiences and business models.
"Even after combining with Warner Bros, our view share would only move from 8% to 9% in the US - still well behind YouTube (13%) and a potential Paramount/WBD combination (14%)," Netflix's letter said.
The company said the deal will not result in studio closures amid fears of job losses due to the rise of artificial intelligence. Paramount too had said it does not intend to cut content budgets and aims to run both studio units separately.
