Netflix co-CEO Ted Sarandos tries to clear the air with theater owners at a New York City investor’s conference right after rival Paramount CEO David Ellison, along with his father Larry Ellison, co-founder of Oracle Corporation, countered Sarandos’s $ 82.7 billion deal to acquire Warner Bros with an offer of $108.4 billion.
At the conference on Monday, Sarandos confirmed that if the deal closes, Warner Bros will still remain releasing films theatrically, explaining,
We have not talked a lot about in the past about wanting to do theatrical, because we’ve never been in that business. When this deal closes, we will be in, and we’re going to do it. We didn’t buy this company to destroy that value.
This statement did not seem to quell any theater-goer’s fears, as the declining number of features released theatrically has been a pressing issue in recent years, especially since COVID-19 and Disney’s acquisition of 20th Century Fox. Box office experts estimate that around 15-20% of people who went to the theaters “simply never returned” in the post-pandemic era. This year, it is estimated that domestic box office revenue will equal last year’s $8.8 billion, a drop from 2019’s $11 billion.
Mike Bower, chairman of Cinema United’s executive board and CEO of Harkins Theaters, expressed his thoughts about Sarandos’ deal, explaining,
Further consolidation in the industry, no matter who is bringing studios together, is a real threat and potentially existential threat to cinemas. And I would say, beyond that, it’s not just to cinemas; it’s to the whole ecosystem. I think there’s a misunderstanding. That’s not the way the industry works. We have fixed costs. You reach a tipping point where it doesn’t just continue to get smaller; it crumbles. And at that point you don’t have an ecosystem that can support it.
Cinema United CEO Michael O’Leary made his own statement about the deal on December 5th when it was first announced to the public, expressing the negative impact this merger will have on the movie theater community.
The negative impact of this acquisition will impact theaters from the biggest circuits to one-screen independents in small towns in the United States and around the world.
Sarandos seemingly referenced this comment in his statement on Monday, countering,
I think it’s important to know that what we are going to do with this is we are deeply committed to releasing those movies exactly the way they’re releasing the movies today.
The Hollywood Reporter cited an anonymous exhibition executive who said this would require Netflix to commit to a “robust slate with a meaningful period of exclusivity supported by marketing.” One studio chief believes Netflix will eventually get rid of windows, even for Warner Bros. titles.
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