Netflix (NFLX.US) Co-CEO Ted Sarandos has stated that a successful acquisition of Warner Bros. Discovery (WBD.US) would lead to more films being released in theaters. This addresses a core concern in Hollywood regarding the high-profile deal, which involves the future of the iconic entertainment company. Sarandos commented in an interview on Thursday that a merger between Netflix and Warner Bros. would be "better for theaters," as Netflix could utilize Warner Bros.' established distribution network to release its films in cinemas. He said, "If this deal goes through, theaters can expect more high-quality films."

Although Netflix signed an agreement in December to acquire Warner Bros.' film studio and streaming assets for $72 billion, it faces strong competition from Paramount Skydance Corp (PSKY.US), which has launched a hostile takeover bid for the entertainment company owning classic IP such as "Harry Potter" and "The Lord of the Rings." Historically, Netflix has only released a limited number of films in select theaters for short runs. As recently as April last year, Sarandos referred to the traditional theatrical model as an "outdated concept."

The potential for Netflix to acquire Warner Bros. has raised significant concerns in Hollywood. Theater alliances, actors, and industry guilds have warned that the transaction could reduce the number of films available in cinemas. Reports on Wednesday indicated that the U.S. Department of Justice has contacted major theater chains to assess the impact of a Warner Bros. sale on the industry.

Netflix has committed to providing Warner Bros. films with a 45-day exclusive theatrical window. However, Sarandos clarified in Thursday's interview that he does not intend to formalize this commitment in written agreements. "I wouldn't put it in a written agreement because I don't want to do a deal that somehow puts us at a competitive disadvantage later," he explained.

If Paramount successfully acquires Warner Bros., it has pledged to more than double the combined company's annual film output to 30 movies per year. Sarandos expressed skepticism about Paramount's ability to deliver on this promise, citing the need for debt reduction and cost-cutting post-acquisition, and accused the company of spreading misinformation. "That's nearly 10 more films per year than what a healthy studio produces now," he said. "I think it's highly unlikely to be achievable."