How Ted Sarandos became the ultimate Hollywood gate-crasher

Hollywood moguls erstwhile dismissed the outsize ambitions of Netflix’s executives.

“Is the Albanian service going to instrumentality implicit the world?” erstwhile Time Warner Chairman Jeff Bewkes asked a newsman 15 years ago. “I don’t deliberation so.”

Think again. On Friday, Netflix co-Chief Executive Ted Sarandos pulled disconnected an audacious $82-billion woody to bargain overmuch of Bewkes’ aged haunts: the Warner Bros. movie and TV studios successful Burbank, and HBO and the HBO Max streaming work successful Culver City.

“This is simply a uncommon opportunity,” Sarandos said successful an capitalist call. “It’s going to assistance america execute our ngo to entertain the satellite and to bring radical unneurotic done large stories. We’ve built a large business, and to bash that, we’ve had to beryllium bold and proceed to evolve.”

If the takeover is approved — it could look a raft of ineligible and regulatory challenges — Netflix would summation ownership of specified classics arsenic “Casablanca” and “Goonies” and fashionable characters including Batman, Scooby-Doo, Dirty Harry and Harry Potter.

The acquisition represents a infinitesimal of triumph for the brash Sarandos, who has gone from Hollywood gate-crasher to the eventual powerfulness broker.

“There seems to beryllium nary ceiling of accidental for Ted Sarandos,” said Tom Nunan, a erstwhile workplace and web executive. “He’s the king of Hollywood.”

Netflix’s triumph successful the auction for Warner Bros. stunned galore successful Hollywood who figured Paramount — whose bid was backed by the 1 of the world’s wealthiest men, Larry Ellison — had a fastener connected the prized Warner assets.

Even Netflix’s brass downplayed their merger ambitions arsenic precocious arsenic 2 months ago. Co-Chief Executive Greg Peters shrugged disconnected immoderate involvement astatine a Bloomberg conference, saying: “We travel from a heavy practice of builders alternatively than buyers.”

But the streaming giant’s ascendant marketplace presumption and beardown equilibrium expanse allowed it to assemble a mostly currency bid that wowed Warner Bros. Discovery’s board, which voted unanimously successful favor. What’s more, Netflix agreed to sorb much than $10 cardinal of Warner Bros.’ debt, bringing the deal’s full worth to $82.7 billion.

Warner shareholders and U.S. and overseas regulators inactive indispensable o.k. Netflix’s takeover. Netflix — which is based successful Los Gatos but has a ample beingness successful Hollywood — said it expects the woody volition adjacent wrong a twelvemonth to 18 months.

Netflix, however, already is facing stiff absorption from cinema chains, lawmakers, salient creatives and labour unions. The Writers Guild of America said the woody should beryllium blocked.

“The world’s largest streaming institution swallowing 1 of its biggest competitors is what antitrust laws were designed to prevent,” the WGA said.

A vocation of defying convention

If it succeeds, the takeover would beryllium a triumph for Sarandos, the company’s often arguable co-CEO who has been liable for Netflix’s contented operations since 2000. Until recently, helium was seen arsenic a disruptor who upended the industry’s long-standing concern models, particularly its reliance connected the large screen.

It’s a singular trajectory for the 61-year-old Phoenix autochthonal and movie buff, who erstwhile clerked successful a portion promenade video store, joining Netflix erstwhile it was a scrappy Silicon Valley startup distributing DVDs done the message successful reddish envelopes.

Company co-founder Reed Hastings was impressed by Sarandos aft helium struck a first-of-its-kind revenue-sharing woody with Warner Bros. arsenic an enforcement astatine West Coast Video/Video City retail chain.

Sarandos has been successful complaint of Netflix’s contented operations ever since.

One of 5 children, he’s the lad of an electrician and a stay-at-home ma who near the TV connected each day.

While moving astatine the video store, Sarandos earned a estimation for giving large movie recommendations to customers based connected what they liked to watch. In galore ways, helium was a quality mentation of Netflix’s present celebrated proposal algorithm.

Sarandos spent his archetypal 3 years astatine Netflix moving retired of his chamber successful Los Angeles. Hastings and Sarandos’ endeavor was mostly liable for bankrupting the then-dominant video rental chain, Blockbuster.

His knack for knowing what audiences privation was instrumental successful Sarandos’ ascent astatine Netflix and Hollywood: Netflix present has much than 301 cardinal subscribers, and it could turn adjacent more.

Analysts estimation the acquisition could adhd an further 100 cardinal customers to the streaming work — a bounty that is expected to gully the attraction of antitrust regulators.

Over time, the institution shifted to streaming licensed TV and films, but arsenic studios started to propulsion distant from those deals, Netflix began its foray into archetypal content.

Again, Netflix wasn’t taken excessively earnestly astatine first. Sarandos would get TV amusement scripts with signs of rejection — java stains and smudged fingerprints — but his gamble connected buying the rights to David Fincher’s governmental thriller, “House of Cards,” starring Kevin Spacey and Robin Wright, successful 2011 changed that.

Sarandos walked into Fincher’s bureau and offered him a provocative deal: Netflix would perpetrate to the archetypal 2 seasons of “House of Cards” without seeing a aviator for $100 million.

“There were 100 reasons not to bash this with Netflix,” Sarandos told The Times successful 2013. “We had to springiness them 1 large crushed to bash it with Netflix.”

Sarandos has made a vocation retired of defying convention.

Under his leadership, Netflix released episodes to shows each astatine once, allowing radical to binge ticker an full season. The level greenlighted afloat seasons of shows adjacent earlier they began, and older bid similar “Friends” and “The Office” recovered caller audiences years aft they ended connected web television.

He made bets connected bid that different accepted studios passed on, including the fashionable sci-fi amusement “Stranger Things,” which would go a planetary deed with its ain beingness of characters, similar “Star Wars.”

Some studios were hesitant to springiness the show’s creators, Matt and Ross Duffer, first-time showrunners, the reins. Typically, Netflix and Sarandos thought differently.

“They work it, they got the project, and they wanted maine and Ross to beryllium progressive arsenic showrunners and to direct, and that wholly changed our lives,” said Matt Duffer connected signifier astatine the L.A. premiere of the last play of “Stranger Things” successful Hollywood this month.

“Ted made that determination each the mode backmost then, 2015, and that’s wherefore we’re present today,” helium said.

Over time, Netflix became a spot wherever endowment wanted to transportation their shows.

“The extremity is to go HBO faster than HBO tin go us,” Sarandos told GQ successful 2013.

Soon, Sarandos mightiness beryllium successful complaint of HBO.

Netflix expanded its scope globally, creating a accumulation pipeline abroad. Its biggest planetary hits see 2021 Korean connection bid “Squid Game,” Netflix’s astir fashionable amusement of each time, with its archetypal play generating 265.2 cardinal views successful its archetypal 3 months.

But arsenic Netflix’s strategy changed the Hollywood landscape, it besides angered theatre owners and competitors who were upset that the streamer was playing by antithetic rules that challenged long-standing practices successful the amusement industry.

Sarandos successful peculiar has taken nonstop purpose astatine the accepted signifier of releasing movies successful theaters archetypal — and keeping them determination for months earlier making them disposable for location viewing.

Netflix mostly releases movies successful theaters lone for abbreviated periods successful bid to entreaty to fans oregon suffice for awards. They look connected its level soon aft they debut successful theaters.

Sarandos was promoted from main contented serviceman to co-CEO successful 2020, moving the institution with Hastings, who had antecedently served arsenic Netflix’s CEO.

The duo faced their biggest situation successful 2022, erstwhile Netflix’s subscriber numbers plunged by 200,000 subscribers successful its archetypal quarter, the archetypal diminution successful much than a decade.

Analysts feared that the streaming gyration was implicit and Netflix had reached a ceiling to its growth.

But Netflix was capable to find caller gross streams by cracking down connected password sharing and entering caller areas of concern it antecedently overlooked, including advertizing and unrecorded events similar sports, including NFL football.

In 2023, Hastings stepped down from his relation to beryllium enforcement chairman, and Peters, main operating officer, was named to the co-CEO role.

Today, Netflix is wide heralded arsenic the victor of the streaming wars years aft galore rivals tried to participate into the space, putting the institution successful an perfect presumption to marque a important currency and banal bid for the Warner Bros. Discovery assets it was seeking.

Unlike galore of its competitors, Netflix is profitable — the institution generated $2.5 cardinal successful nett income successful the 3rd quarter, up 8% from a twelvemonth earlier.

Netflix has offered Warner Bros. Discovery shareholders $23.25 successful currency and $4.50 of Netflix banal for each share. In September, earlier Paramount started the bidding, Warner Bros. was trading astir $12.

“These assets are much invaluable successful our concern model, and our concern exemplary is much invaluable with these assets,” Sarandos said successful a telephone with investors connected Friday.

If the woody is approved, Netflix would beryllium the 3rd proprietor of Warner Bros. and HBO successful a decade. On the call, Peters addressed his earlier critique that astir large media mergers fail.

“We recognize these assets that we’re buying,” Peters told investors connected Friday. “Things that are captious successful Warner Bros. are cardinal businesses that we run in, and we recognize a batch of times, the acquiring company, it was a legacy, non-growth concern that was looking for a lifeline. That doesn’t use to us. We’ve got a healthy, increasing business.”

Sarandos expressed assurance the woody would spell through.

“This woody is pro-consumer, pro-innovation, pro-worker, pro-creator, pro-growth,” Sarandos told investors. “Our plans present are to enactment truly intimately with each the due governments and regulators, but truly assured that we’re going to get each the indispensable approvals that we need.”

Sarandos is 1 of Hollywood’s astir well-compensated CEOs, with a bundle that was valued astatine $61.9 cardinal successful 2024.

Long seen arsenic affable to talent, helium has weathered immoderate controversies implicit the years.

During dual strikes successful 2023, writers and actors complained bitterly astir however Netflix was compensating them for their enactment connected streaming shows.

Sarandos was seen arsenic 1 of the cardinal Hollywood players successful helping span the gap. One of the outcomes of the strikes was studios including Netflix would merchandise viewership information to the unions and springiness bonuses to endowment based connected definite viewership metrics.

In 2021, Sarandos faced interior backlash wrong Netflix erstwhile immoderate employees organized a walkout implicit transphobic comments said connected comedian Dave Chappelle’s peculiar “The Closer.” Sarandos had stood by the comedian, saying successful a unit memo that “content connected surface doesn’t straight construe to real-world harm.” But days aboriginal helium told Variety that “I screwed up that interior communication.”

“I should person led with a batch much humanity,” Sarandos said.

Despite its dominance successful streaming, Netflix continues to look challenges from different forms of entertainment, including YouTube and societal media sites similar TikTok oregon gaming communities similar Fortnite that each vie for eyeballs.

“In a satellite wherever radical person much choices than ever however to walk their time, we can’t basal still,” Sarandos said Friday. “We request to support innovating and investing successful stories that substance astir to audiences, and that’s what this woody is each about.”