Netflix is no longer considering a future that includes Warner Bros., having ceded the escalating M&A battle to Paramount Skydance. Netflix Chief Financial Officer Spence Newman, speaking Wednesday at the Morgan Stanley Technology, Media and Telecom conference, reiterated the company’s position that it was bailed out of its bid for Warner Bros. because Paramount raised its offer.
“Simply put, it was all about price,” Newman said. “We’ve said all along that this opportunity is nice to have at the right price, but not a must-have at any price,” he added, echoing an earlier statement from Netflix co-CEO Ted Sarandos.
When Netflix struck a deal to buy WB’s studios and streaming business in December, Newman said the company was playing “attack, not defense.” The chief financial officer said Netflix has a “unique view” on how to value WBD assets. “We approached this plan from a price point of view,” he said. “When it became clear that it no longer made sense financially, the company resigned.
“We’re moving forward now. We’re moving forward with $2.8 billion in our pockets that we didn’t have a few weeks ago,” Newman said of the breakup money he received from Paramount Skydance.
On February 26, Netflix terminated its deal to acquire Warner Bros.’ studio and streaming operations after David Ellison’s Paramount raised its hostile bid for WBD to a total of $31/share, making Paramount the winner of the debt-driven acquisition of the media conglomerate. Paramount Skydance paid a $2.8 billion penalty to Netflix after Warner Bros. Discovery terminated its contract with Netflix in favor of Paramount’s “superior” offer.
Asked whether the Warner Bros. bidding war changed Netflix’s M&A strategy, Newman said, “I know it sounds boring, but it really hasn’t changed anything.” The company “continues to focus on what the opportunities are” to accelerate business growth, he said.
Mr. Newman said he had a “stronger belief” that Netflix would have been a “great steward” of these assets by the time the bidding process for Warner Bros. was concluded. And he maintained that he was very confident that Netflix had a “clear path” to regulatory approval.
“Ultimately, we’re going to be punished,” Newman said of the price the company would pay Warner Bros.
Netflix plans to increase total cash content spending to about $20 billion in 2026, up 10% from last year. The company forecasts sales to be $50.7 billion to $51.7 billion, an increase of 12% to 14% year-on-year, and operating profit margin to reach 31.5% in 2026. The streaming giant reported that it had more than 325 million subscribers worldwide at the end of 2025, up from 301.2 million in the same period last year.
Netflix’s content spending is expected to increase 10% this year, which is in line with expected revenue growth, Newman said. “There’s no real change in our approach,” he said. “We truly want to be the starting point and destination for professionally produced content for creators around the world.”
