Ted Sarandos on Warner Bros. Deal, Europe & YouTube Competition | THR News

Ted Sarandos, co-CEO of Netflix, is pivoting attention to European expansion following the company’s withdrawal from a bid to acquire Warner Bros. Discovery (WBD). The move comes less than a month after Paramount, backed by David Ellison’s Skydance, secured a $111 billion deal for WBD, effectively ending Netflix’s pursuit. Sarandos, in a recent interview with Politico, signaled a desire to move past the failed merger and focus on the streamer’s growing presence and future plans in Europe.

The high-stakes negotiation for WBD, and Netflix’s subsequent retreat, has been a dominant narrative in Hollywood for weeks. Sarandos, yet, is keen to reframe the conversation. He firmly denied any political interference from the Trump administration in the deal’s outcome, a claim that has been circulating in industry reports. “The political dynamics complicated the narrative [around the deal], not the actual outcomes,” Sarandos stated, characterizing the process as fundamentally a “business transaction.” He similarly downplayed the significance of a February 21st post on Donald Trump’s Truth Social platform calling for the removal of Netflix board member Susan Rice, dismissing it as simply “a social media post.”

European Ambitions and Regulatory Hurdles

While Sarandos sought to distance Netflix from the WBD saga, he was notably forthcoming about the challenges and opportunities presented by European regulation. EU lawmakers are preparing to revisit the Audiovisual Media Services Directive (AVMSD), a key piece of legislation governing the media landscape across the European Union. The AVMSD currently mandates a 30 percent European content quota for streaming services like Netflix, a requirement Sarandos acknowledged during the interview.

Netflix’s investment in European content is already substantial. Sarandos highlighted the company’s commitment to the region, stating that the EU is now Netflix’s largest market in terms of revenue. “We’ve spent, in the last decade, over $13 billion in creating content in Europe,” he said. “It makes us one of the leading producers and exporters of European storytelling. We’ve got a lot of skin in the game in Europe.” This significant investment underscores the strategic importance of the European market for Netflix’s continued growth.

However, Sarandos cautioned against overly restrictive regulations, advocating for incentive-based approaches like tax breaks – similar to those implemented in Spain and the UK – as a more “productive” way to encourage European production. He also expressed concern that a fragmented regulatory landscape, with differing national rules across Europe, could undermine the benefits of the EU’s single market. Maintaining a unified market is crucial, he argued, to maximize the reach and impact of European content.

YouTube as a Competitive Threat

Beyond content quotas, Sarandos raised a critical point about the evolving competitive landscape: the growing influence of YouTube. He argued that European regulators are underestimating YouTube’s role as a direct competitor to traditional television and streaming services, often categorizing it primarily as a social media platform. As reported by Politico, Sarandos believes this misclassification overlooks YouTube’s substantial investment in and consumption of video content.

“One of the things that we saw in recent months with the Warner Brothers transaction is a real deep misunderstanding about what YouTube is and isn’t,” Sarandos explained. “YouTube is a straightforward direct competitor for television, either a local broadcaster or a streamer like Netflix…I think what happens is people think of YouTube as a bunch of cat videos [but] YouTube is in the same exact game that we are.” This observation highlights a potential blind spot in regulatory discussions, as YouTube’s growing presence challenges the traditional definitions of media platforms.

The WBD Deal: A Timeline of Events

The failed acquisition of Warner Bros. Discovery unfolded rapidly in February 2026. As detailed by Deadline, Ted Sarandos’s visit to the White House on February 26th coincided with Paramount’s successful bid for WBD. The timing suggested a pre-ordained outcome, with Paramount securing a “company superior proposal” of $31 per share. Netflix was given four days to counter, but ultimately withdrew from the running on February 28th, receiving a $2.8 billion breakup fee in the process.

The situation was further complicated by the political backdrop, with David Zaslav, the CEO of WBD, reportedly having a close relationship with former President Trump. While Sarandos maintains there was no direct political interference, the perception of a favorable environment for Paramount undoubtedly influenced the negotiations. The speed with which events unfolded, from Sarandos’s White House visit to Netflix’s withdrawal, suggests a carefully orchestrated series of maneuvers.

What’s Next for Netflix in Europe

With the WBD deal behind it, Netflix is doubling down on its European strategy. The company’s focus will likely be on expanding its local content offerings, strengthening its relationships with European creators, and navigating the evolving regulatory landscape. Sarandos’s emphasis on the EU as Netflix’s largest revenue market signals a long-term commitment to the region. The streamer will be closely watching the revisions to the AVMSD, advocating for policies that foster innovation and investment while ensuring a level playing field for all players in the European media market. Continued investment in European productions, coupled with a proactive approach to regulatory challenges, will be key to Netflix’s success in the years ahead.

The company is also likely to continue monitoring the competitive threat posed by YouTube, potentially pushing for a more accurate classification of the platform within the European regulatory framework. This could involve advocating for similar content quotas and other regulations that apply to traditional streaming services. Netflix’s future in Europe hinges on its ability to adapt to the changing dynamics of the media industry and capitalize on the region’s vast potential for growth.