Netflix (NFLX) reiterated prior comments that the company has no plans to pursue media mergers and acquisitions next year — even if competitors seem interested in doing so.
“We’re better builders than buyers,” Netflix co-CEO Ted Sarandos said at a UBS media conference in New York City on Tuesday.
The executive acknowledged the company has engaged in small IP purchases, like the acquisition of the Roald Dohal Story Company, which encompasses the intellectual property of the late author behind classics like “Charlie and the Chocolate Factory” and “Matilda.”
But he maintained the streamer has historically “been a better builder,” citing its successful original programming, competitive positioning, and what’s been described as the “Netflix effect.”
He touted the “off the charts” performance of the recent Jake Paul-Mike Tyson fight, saying the event’s massive viewership of 108 million global viewers, which led to technical glitches, stretched “the limits of the internet itself.”
“I don’t know that the consolidation changes the competitive landscape that much because it’s the same programming basically that we’re competing with every day just in different revenue models,” he said.
Sarandos said economic stress on legacy media companies, burdened by the demise of the cable bundle, has contributed to more conversations regarding consolidation and divestitures, which have already begun to materialize.
Last month, Comcast (CMCSA) said it would spin off most of its cable properties into a new company after teasing the possibility just a few weeks prior. At the time, Comcast said it wanted to “play offense” in order to combat increased cord-cutting.
And it’s no coincidence these moves are happening now.
For years, linear advertising and affiliate fees, or the fees pay-TV providers pay to network owners to carry their channels, had consistently boosted revenues for legacy media. But the shift to streaming saw cable subscribers decline, hurting affiliate revenue. Meanwhile, streaming companies took another leg off of the stool by rolling out their own advertising tiers.
The pressure from deteriorating linear networks, coupled with heavy debt loads, has forced legacy media giants to cut costs wherever they can, resulting in mass layoffs and restructuring efforts.
Case in point: Warner Bros. Discovery (WBD) and Paramount Global (PARA). The two companies took a collective $15 billion hit on the value of their respective cable businesses earlier this summer.
Wall Street analysts have said Comcast’s spun-off company could acquire other beaten-down cable properties, describing it as a positive development for competitors with exposure to traditional networks, like Warner Bros. Discovery.
WBD CEO David Zaslav recently hinted at more industry consolidation, citing the incoming Trump administration as a possible catalyst. Trump is viewed as generally more friendly toward dealmaking across multiple industries than President Biden.
Meanwhile, Paramount’s merger with Skydance Media is set to close in the second half of 2025. It’s unclear what will happen to Paramount’s cable and TV properties after the merger.
Even Disney (DIS) has explored cleaving off its traditional TV assets, which include broadcast network ABC and cable channels like FX, Freeform, and National Geographic. Disney CEO Bob Iger has since walked back those comments, but it’s still possible a spin-off or asset sale could be revisited.
“There are a lot of efficiencies to be had by combining many of these companies,” Bank of America analyst Jessica Reif Ehrlich recently told Yahoo Finance. “Can these companies survive as part of a bigger entity? Yes, of course they can.”
But, at least for now, survival is one thing Netflix doesn’t have to worry about.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at [email protected].
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