Netflix Execs Open to Purchasing Studios to Gain IP; What Are the Best Targets? Paramount, Lionsgate, AMC, Disney Channels?
“Builders, not buyers” might be Ted Sarandos’ favorite phrase, but that doesn’t mean that the Netflix executive isn’t willing to make some purchases when it benefits the company. The Netflix co-CEO used the words again during his company’s conference call to discuss its second-quarter earnings on Wednesday when asked whether the world’s largest streamer was looking into any large mergers or acquisitions. But Sarandos did not close the door completely on gobbling up another studio if it meant gaining popular intellectual property that Netflix could mine.
“We’re mostly looking at when we look at our M&A activity would be mostly around IP that we can develop into great content for our members, which is our real strength in business,” he said. “So that’s — I would think we have traditionally been very strong builders over buyers, and that really hasn’t fundamentally changed. But if there are opportunities that give us access to pools of IP that we could develop into and against that could be super interesting.”
There has been growing speculation that Netflix might make a splashy acquisition sometime in the near future. One investment banker who has worked with the streamer recently told Business Insider that Netflix is “open for business,” a big shift from the company’s usually-cautious tendencies when it comes to mergers.
If Sarandos wants an IP-laden company to snap up, Paramount Global would be the best place to start. The total value of its outstanding shares is relatively low, meaning it would take less legwork to acquire than some other potential targets. It also comes heavily laden with franchises, some of which have been successful on Netflix before, like “NCIS” and “Criminal Minds.” Paramount+ just crossed the threshold of 1% of total TV viewed in the month of June, helped in large part by “Star Trek: Strange New Worlds,” which shows that franchise still has some run to it after more than 60 years.
Iconic movie franchises like “Top Gun,” “Mission: Impossible,” and many others also call Paramount home. It’s certainly an attractive offering, with several “pools of IP,” as Sarandos puts it. Acquiring Paramount would be a massive undertaking, however, and there are other targets available if Netflix wants to go a little smaller with its acquisition.
Disney might be open for business as well, at least with its linear channels. As part of his strategy to lead Disney into the future, CEO Bob Iger has indicated that its linear channels ABC, Disney Channel, and Freeform were not integral pieces of the company moving forward. A show like “Abbott Elementary” would do well on Netflix, as would a handful of Disney Channel titles.
Lionsgate recently filed paperwork to divide its one company into two separate entities; one focused on movies, the other on the Starz cable channel and streaming service. “Outlander” is a hugely popular IP, and one that Netflix could build on for years to come. The company could also make good use of the “Power” franchise, which has proven consistently popular on STARZ. On the movie side, Lionsgate is responsible for the John Wick franchise, the Twilight films, the Divergent series, and more.
AMC is yet another reasonable target for Netflix to pursue. The company has 11.5 million streaming customers, and its shows like “The Walking Dead,” “Breaking Bad” and “Better Call Saul” have all called Netflix home in the past, and would certainly qualify as high-quality IP. There are plenty of options available for the world’s largest streamer if it wants to make some big buys. Netflix now stands at over 238 million subscribers, and it has money to burn, even if it still wants to be patient.
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