Netflix’s co-chief executives, Ted Sarandos and Greg Peters, have moved to calm internal anxiety and external skepticism over the company’s audacious plan to acquire Warner Bros. Discovery’s core streaming and studio assets, framing the proposed $72 billion deal as a rare consolidation that strengthens Hollywood rather than hollowing it out.

In a letter sent to employees on Monday — and filed publicly with the U.S. Securities and Exchange Commission — the executives argued that a combined Netflix–Warner Bros. would be “pro-consumer, pro-innovation, pro-worker, pro-creator, and pro-growth,” directly countering fears that the transaction could accelerate job losses and further erode traditional film and television models.

“We see this as a win for the entertainment industry, not the end of it,” Peters and Sarandos wrote, addressing a growing chorus within Hollywood that has warned the merger could mark a tipping point in the industry’s long shift toward streaming dominance.

The reassurance comes as Netflix faces not only cultural resistance but an intensifying corporate battle. Earlier this month, the streaming giant unveiled its plan to buy Warner Bros. Discovery’s streaming and studio businesses — a deal that would be Netflix’s largest acquisition ever and one that would fold franchises such as DC, Harry Potter, and HBO’s vast content library into its ecosystem. Days later, Paramount Skydance countered with a hostile bid for all of Warner Bros. Discovery, valuing the company at roughly $108 billion and escalating the stakes into a full-blown takeover fight.

In their letter, Peters and Sarandos said the rival bid was “entirely expected” but insisted Netflix’s proposal is the stronger option for shareholders, consumers, and workers. They emphasized that, unlike a Paramount-Warner Bros. tie-up, Netflix’s deal would not involve merging two traditional studios with overlapping operations — a key argument aimed at deflecting fears of mass redundancies.

That distinction matters in Hollywood, where “synergies” — the cost savings typically promised in mergers — often translate into layoffs. Paramount has estimated potential synergies of around $6 billion if its bid succeeds, compared with Netflix’s projection of $2 billion to $3 billion. Netflix has pitched that gap as evidence that its approach would preserve more jobs across production, marketing, and distribution.

Still, suspicion toward Netflix runs deep in parts of the industry. For years, the company’s streaming-first philosophy and limited theatrical release strategy have clashed with the preferences of major talent and cinema operators.

Sarandos has previously described long, exclusive theatrical windows as not “consumer-friendly,” arguing they are likely to continue shrinking. Aware of the sensitivity, the co-CEOs used the letter to make an explicit commitment: Warner Bros. films would continue to receive full theatrical releases.

“Theatrical is an important part of their business and legacy,” they wrote, adding that recent Warner Bros. hits such as Minecraft and Superman would still have debuted on the big screen under Netflix ownership.

They acknowledged that Netflix historically deprioritized theatrical distribution because “that wasn’t our business,” but said the acquisition would put the company squarely in that space.

Regulatory approval looms as the central obstacle. Both Netflix and Paramount have publicly argued that their respective deals pose minimal antitrust risk, but they rely on very different definitions of the market. Paramount’s David Ellison has said a Netflix–Warner Bros. combination would concentrate too much power in paid streaming, where Netflix already leads. Netflix, by contrast, is urging regulators to look at total television viewing time, including free platforms such as YouTube.

In the letter, Peters and Sarandos leaned heavily on that broader framing, citing Nielsen data showing that a combined Netflix–Warner Bros. would account for about 9% of U.S. viewing time, behind YouTube at 13% and a hypothetical Paramount–Warner Bros. combination at 14%.

“We believe the facts speak for themselves,” they wrote, signaling readiness for a prolonged regulatory fight.

Politics adds another layer of uncertainty. President Donald Trump, who has taken a keen interest in high-profile corporate deals, looms as a wild card. Paramount Skydance chief David Ellison and his father, Oracle billionaire Larry Ellison, are close to Trump, while Sarandos has longstanding ties to prominent Democrats. Trump has publicly praised both Netflix and Sarandos, yet has also said a Netflix–Warner Bros. combination “could be a problem” given its scale.

Behind the scenes, Netflix has been lobbying the administration by positioning itself as a stabilizing force in an industry battered by cord-cutting, strikes, and shrinking linear TV revenues. The company’s argument is that absorbing Warner Bros.’ assets would shore up one of Hollywood’s most storied studios rather than dismantle it.

For employees, the letter sought to shift focus away from deal drama and back to Netflix’s core growth ambitions heading into 2026. Peters and Sarandos stressed that a small, specialized internal team is handling the transaction, allowing the broader workforce to stay focused on organic expansion. They also pointed staff to internal and public communication channels designed to counter what they described as speculation and misinformation.

Whether the pitch resonates beyond Netflix’s walls remains uncertain. To critics, the deal still represents another step toward a streaming duopoly dominated by Netflix and a handful of tech-backed giants. To Netflix, it is a strategic bet that scale, libraries, and global distribution are now essential for survival — and that Hollywood’s future lies not in resisting that reality, but in reshaping itself around it.

Internal Meta documents, spanning its finance, engineering, safety, and lobbying divisions over the past four years, reveal a stark conclusion: the social media giant was deriving a significant portion of its revenue from fraudulent advertisers originating in China, who were defrauding users across Facebook, Instagram, and WhatsApp worldwide.

According to Reuters, though China’s government prohibits its citizens from using Meta’s social media platforms, it permits Chinese companies to purchase ads to target foreign consumers. This policy has made China a crucial revenue source for Meta, with annual advertising sales from the country reaching over $18 billion in 2024, representing more than a tenth of the company’s global revenue.

The Scale of Illicit Revenue

Meta’s internal analysis revealed the uncomfortable reality that roughly 19% of its revenue from China—more than $3 billion—was derived from ads promoting scams, illegal gambling, pornography, and other banned content. Furthermore, Meta believed that China was the country of origin for approximately a quarter of all ads for scams and banned products across its global platforms.

The victims of this fraud were geographically diverse, ranging from investors in the United States and Canada who were swindled out of their savings to shoppers in Taiwan who purchased bogus health supplements.

Internal presentations from April 2024 warned Meta leaders that the company needed to “make significant investment to reduce growing harm.” The documents reflect a long-standing internal tension: a desire to police its platforms clashing with a reluctance to implement fixes that could sharply undermine its vital revenue stream.

Enforcement Efforts and Results

Responding to the mounting scale of the problem, Meta created a dedicated anti-fraud team to scrutinize problematic advertising activity originating from China. By utilizing stepped-up enforcement tools—which went beyond previous monitoring efforts—Meta successfully slashed the percentage of problematic Chinese ads by nearly half during the second half of 2024, reducing the figure from 19% to 9% of total advertising revenue from China.

Several technological and geopolitical factors compound the ability for fraudulent advertisers to thrive on Meta’s platforms:

• Ease of Account Creation: To place an ad, an advertiser only needs to establish a basic user account with a name and birthdate. The widespread availability of fake or stolen accounts makes it easy for fraudulent advertisers to quickly disguise their true identities.
• Evasion Tools: Chinese technology firms actively sell tools designed to obscure the advertisers’ real locations, mask their identities, and disguise fraudulent ads as innocuous content.
• AI-Generated Documents: Fraudsters are leveraging artificial intelligence to generate fake documentation, allowing them to evade verification attempts by Meta’s systems.
• “Ad Optimization Specialists”: An entire specialized industry of “ad optimization specialists” has emerged to exploit weaknesses in Meta’s enforcement systems. These specialists manage sophisticated, often large-scale, shady advertising campaigns funded by “informal” sources, including loan sharks.

The investigation by Propellerfish consultants highlighted a major geopolitical factor enabling the fraud: because the harmful advertising targets only overseas audiences, China’s government generally “turns a blind eye”, concluding that the violations do not interfere with Chinese citizens. This lack of domestic enforcement means crooked domestic advertisers face “little or no risk” of prosecution within China, allowing the abusive ecosystem to flourish.

The records also indicate that Meta’s own enforcement practices often prioritized revenue. For instance, the company typically only banned advertisers when automated systems predicted a 95% likelihood of fraud, a high evidentiary standard. Furthermore, some internal documents suggested that likely scammers scoring under that 95% threshold were sometimes not banned but were instead charged higher ad rates—a practice that effectively monetized suspicious activity.