Netflix co-CEO Ted Sarandos says he has no regrets about the streamer’s pursuit of Warner Bros., even though the failed bid disrupted the company’s business narrative and brought heightened Wall Street scrutiny.

Sarandos addressed the episode at Bloomberg’s Screentime, hours after Paramount’s acquisition of Warner Bros. Discovery cleared its final hurdle when a federal judge approved a settlement with state attorneys general.

Netflix had surprised the industry by entering—and initially winning—the bidding for Warner Bros., despite positioning itself as “a builder, not a buyer.” Warner Bros. Discovery ultimately accepted Paramount’s higher offer for the entire company.

“No, I think the plan was solid,” Sarandos said when asked if he regretted the pursuit. He argued that Netflix had set a disciplined ceiling based on what the asset could return to shareholders. Paying any more, he said, would have pushed the economics “into negative territory,” even at Netflix’s scale.

Sarandos acknowledged that the attempted deal complicated perceptions of Netflix among investors, the press and others. But he said management must sometimes be prepared to put the company’s established narrative at risk when pursuing an opportunity that could produce a long-term return.

Netflix Confronts Slower Engagement Growth

That narrative has also come under pressure from questions about engagement, measured by how much time subscribers spend watching Netflix.

Sarandos said some of that attention was self-inflicted. Almost two years ago, Netflix stopped emphasizing subscriber growth and shifted its focus to engagement. The company has been releasing viewership reports twice a year, with plans to move to annual reporting.

Looking back, Sarandos said Netflix was not sufficiently sophisticated in explaining that measurement. Revenue, profit and engagement should not all be treated as interchangeable, he argued, because different kinds of viewing can have different value.

Netflix recorded 2% engagement growth in its latest announcement, measured against 200 billion hours of viewing. Sarandos cited “incredible headwinds” from events including the World Cup, but he did not dismiss the underlying concern.

“Yes, overall we’re not growing as fast as I want us to, and we’re working on making that move faster,” he said.

Live programming is one avenue Netflix is using in that effort. Sarandos said live events account for approximately 5% of the company’s content budget but generate about 1% of viewing. While that programming may not substantially increase total engagement, he said it can produce especially valuable engagement.

To illustrate the distinction, Sarandos compared an hour of daytime Judge Judy with an hour of NFL football, saying the two do not generate the same revenue.

He also pointed to Netflix’s financial performance, saying the company delivered double-digit revenue growth in every region of the world during the past quarter. His assessment: “The business is great and growing fine.”

Sarandos Weighs the HBO Max–Paramount+ Combination

The Paramount-Warner Bros. deal will create a combined HBO Max and Paramount+ platform, led by Casey Bloys, chairman and CEO of HBO and HBO Max Content. Sarandos offered a deliberately open-ended assessment of how formidable the merged service could become.

“On paper so far, it’s one and one, so I don’t know if one and one is two, or one and one is one and a half, or one and one is three,” he said.

Sarandos was similarly guarded about speculation involving Bloys. The two had a headline-making lunch in March, days after Netflix lost Warner Bros. to Paramount, prompting questions about whether Bloys might move to Netflix for a job or a deal.

Sarandos said the pair had eaten together many times and called Bloys “a good guy.” Asked directly whether Netflix had made an overture, he did not confirm one, instead saying Bloys would be “in a very good position wherever he goes” and describing him as “a super talented guy.”

Netflix’s Approach to Overall Deals

Sarandos also addressed a series of high-profile talent departures. Stranger Things creators and executive producers Matt and Ross Duffer signed a film and television overall deal at Paramount, while the show’s director and executive producer Shawn Levy recently reached an overall deal with Disney’s 20th Television. Noah Baumbach closed a first-look film agreement at Warner Bros., and David Fincher was also part of the discussion surrounding Netflix talent exits.

The Duffers, Levy and Fincher had each been under Netflix overall deals for more than a decade. Sarandos said the changes reflected individual circumstances rather than a broad shift in Netflix’s talent strategy. Netflix signed an overall deal with Ryan Coogler in June and recently renewed its overall pact with Shonda Rhimes.

According to Sarandos, overall deals can serve different purposes. Some provide a structure for extensive work over a decade, while others give filmmakers or television creators time to develop a specific project over several years.

He said the Duffers wanted to move away from making more television for now and pursue large-scale theatrical movies. Sarandos encouraged them to follow that ambition, while emphasizing that they will remain involved in the Stranger Things universe.

Levy’s outside commitments created scheduling conflicts under an overall arrangement, Sarandos said. With Levy set to make Star Wars movies “for a while,” he argued that a television deal with Disney made sense. Netflix nevertheless expects to continue working with Levy, has shows in development with him and has a project titled The Sticks coming up.

Sarandos also pushed back on the idea that Fincher was simply leaving Netflix for another home. He said the two have been in business since 2011 and that Fincher has not made a movie outside Netflix since 2014. Sarandos praised their three films together, called The Further Mis-Adventures of Cliff Booth “phenomenal,” and highlighted Mindhunter, Love Death + Robots and House of Cards.

Fincher does not yet know what he will do next, Sarandos said, but Netflix plans to remain in business with him “for a very long time.”