This story was originally published in On Background with Mark Stenberg, a free, weekly newsletter that explores the key themes shaping the media industry. You can sign up for it here.
Last month, the deal that was supposed to reshape Hollywood fell apart.
After a protracted, highly visible bidding war for Warner Bros. Discovery, Netflix ultimately walked away from the tie-up, forcing Paramount to pay $110 billion for the asset and fork over a $2.8 billion break-up fee to Netflix.
Now, with cash in hand, its stock price rising, and access to an already formidable war chest, the real question is what comes next for the streamer.
The easy answer is nothing. Netflix is the most profitable company in streaming, having generated roughly $13 billion in operating income last year. It has more than 325 million subscribers and no urgent problems to solve. Plus, according to Oaklins DeSilva+Phillips senior advisor Erica Gruene, the history of major media deals is not exactly an advertisement for doing them.
“If you look at the history of media transactions, it’s basically a warning against it,” Gruene said. “They often destroy a lot more value than they create.”
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A representative for Netflix pointed to recent remarks made by chief financial officer Spence Neumann, who downplayed its M&A ambitions at an investor conference earlier this month.
But the company, which has historically preferred to build products rather than buy them, in recent months demonstrated a newfound openness to paying a premium for the right asset. And the multimonth WBD flirtation suggests an appetite for something larger than its typical small-bet acquisition style.
So, what should the company buy now? I put that question to eight analysts, investors, and media strategists. Their answers ranged from the obvious to the genuinely surprising.
Sports rights or a sports platform
Netflix’s recent push into live programming, most visibly its deal to stream WWE Raw, has made plain that sports programming is a priority for the streaming giant.
But the company still lacks a coherent sports strategy and the infrastructure to support one, according to Chris Cochrane, chief strategy officer at the programmatic ad agency Plug Media.
It could solve those problems by acquiring a sports platform like DAZN, Cochrane said, addressing both problems at once by delivering rights, relationships, and a ready-made audience of sports subscribers.
“Netflix still lacks a consistent sports strategy,” Cochrane said. “Acquiring a sports platform could give it immediate rights infrastructure and established relationships in the sports ecosystem.”
Alan Wolk, a media analyst and cofounder of TVREV, makes a similar case for the company to acquire NBCU, noting that its streaming service Peacock would come bundled with substantial sports rights, including the NFL, the Olympics, the Premier League, supercharging Netflix’s live ambitions overnight.
The streaming math, he argues, increasingly favors whoever can claim the last monocultural event.
“Sports,” he said, “is the last bastion of monoculture.”
A gaming publisher
Netflix has been trying to crack gaming for years, with middling results. Its mobile gaming library has grown but has failed to meaningfully move the needle.
The problem is that Netflix keeps flirting with complicated business models without committing to them, according to media analyst and Parqor founder Andrew Rosen. Gaming, he notes, is fundamentally a community product, one that depends on ads, in-app purchases, and social features that Netflix’s platform doesn’t support.
The solution, several experts suggest, is to stop building and start buying.
Cochrane pointed to EA or Ubisoft as candidates that would instantly deliver premium IP and a new content pipeline, while media strategist Evan Shapiro made the case for Take-Two or Roblox.
“Netflix has been failing in gaming for years,” Shapiro said. “Roblox has never been profitable. And it is chock full of great IP.”
According to both analysts, gaming engagement is a different animal than video engagement, and Netflix needs both.
Lionsgate
More than one expert landed independently on Lionsgate as the most practical near-term target, and the math is hard to argue with, as the studio could conceivably be acquired for roughly what Netflix just pocketed in break-up fees.
“John Wick alone might be worth it,” Shapiro said.
Lionsgate brings the Hunger Games and Twilight franchises, as well as a clutch of FAST channels. Its streaming service Starz also carries a library of content not dissimilar to that of WBD, including DC Comics properties like Lucifer, which drive an outsized share of viewing, according to Rosen.
Indeed, if Netflix loses access to WBD’s library following its Paramount acquisition, Lionsgate starts to look less like an opportunistic buy and more like a necessity.
ITV
The British broadcaster might not be the flashiest acquisition target on this list, but Shapiro makes a pointed case for it.
ITV would give Netflix a meaningful foothold in the UK market, where its engagement has, by some measures, plateaued. It would also, not incidentally, keep ITV out of Comcast’s hands.
Stealing ITV away from Comcast has a double-edged benefit, according to Shapiro: it nets inventory in a key international market and blocks it from a competitor.
Plus, non-fiction formats travel well regardless of where they’re produced, according to Core Advisors partner Blake Saunders.
“The location of a production company for unscripted content doesn’t really matter,” Saunders said.
Spotify
The wildcard that multiple sources raised independently, as well as the one that generated the most enthusiasm, is Spotify.
The two companies are already deepening their relationship through a podcast partnership, and the strategic logic is genuinely compelling, as combining them would create a massive subscription entertainment platform that spans video, audio, and live content.
“It would give Netflix immediate scale and open up a much broader advertising proposition,” Cochrane said.
There are, of course, substantial barriers.
Spotify stock is at an all-time high, Daniel Ek maintains founder control, and the deal would invite regulatory scrutiny.
But the audio-video convergence story is real, according to LightShed Ventures’ partner Rich Greenfield. And Rosen pointed to a specific tactical advantage, in that Netflix’s homepage creates far less friction for video podcasts than Spotify’s does, which could matter enormously as that format continues to grow.
Roku
Gruene raised one target—Roku—that the others largely passed over, a pitch less about content and more about what Netflix still lacks on the business side.
Advertising has become an increasingly important part of Netflix’s revenue mix, and Roku is an adtech powerhouse with deep roots in connected TV.
“Netflix is good at making their own content,” Gruene said. “But I’m always interested in what they don’t have that would drive better revenue.”
Acquiring Roku would hand Netflix a mature advertising infrastructure and a massive distribution platform, without adding a single writer or showrunner to the payroll.
Nothing
The contrarian position had its merits, articulated most forcefully by Gruene and Greenfield.
Netflix demonstrated remarkable discipline by walking away from a deal that many believe would have burdened the company with debt, bureaucracy, and a library of diminishing assets. The company should savor its savvy, according to Gruene.
“Take the money and run,” she said. “They just walked away with $3 billion: do something with it that’s proprietary, that you can use to block from others, that customers will stick with you for.”
Greenfield, for his part, thinks the acquisition landscape is simply too lumpy to make a compelling case for anything. Netflix should wait and watch the rest of the industry atomize itself into more digestible pieces, then pounce when the timing is right, according to Greenfield.
“It’s far more likely that Netflix buys nothing and waits to be opportunistic,” he said.
That strategy sounds a lot like what Netflix was doing in the months leading up to its near-purchase of Warner Bros. Discovery. The war room, it seems, never really closes.
Talking Heds
Events Time (Exclusive): The legacy news brand Time has nearly completed that most modern of digital media pivots: After years of gradual transformation, it has now become an events company. Chief strategy officer Dan Macsai told me that Time is on pace to generate 50% of its 2026 revenue from events alone, up from 23% in 2023. Within Time’s advertising business specifically, events make up nearly 80% of its revenue. This positions Time amid a growing cohort of publishers, including Semafor, whose primary business is an in-person extension their brand, a remarkable trend for an industry that, not even a decade ago, mostly treated the events business as an afterthought.
Bag Bunny (Exclusive): The white smoke has risen from the Playboy Mansion. On Tuesday, the iconic publisher appointed media veteran Phillip Picardi as its new chief brand officer and editor in chief. Picardi, who joins the company following a stint at Weight Watchers, is no stranger to the media business. In his first turn in the editorial world, he repositioned Teen Vogue as an arbiter of the Gen Z zeitgeist, founded the queer-focused publication them at Condé Nast, and served as editor in chief of Out Magazine. Just last week, Playboy also hired revenue executive David Miller from National Geographic. Taken together, the two hires suggest a new chapter at the Bunny is afoot.
Hustle at Bustle (Exclusive): Bustle Digital Group, which owns the editorial brands Bustle, Nylon, and W Magazine among others, plans to name Avi Zimak as its chief commercial officer on Thursday. As part of the move, the company will also be promoting Amber Estabrook to publisher of W and chief business officer of prestige revenue and partnerships. Zimak, who has previously led revenue at both The Arena Group and New York Magazine, will help BDG continue its project of transforming from a network of text-based websites into a social, creator and events-centric media operation. The company endured a lot of critical coverage as it underwent that remodel—some from yours truly—but it appears to have found its footing and now serves as a blueprint for how lifestyle media can adapt to the distributed era.
IAB on AI: Remember the IAB Tech Lab? The standard-setting body for digital advertising fell off my radar after Google reversed course on its plan to deprecate third-party cookies, news that was itself quickly overshadowed by the paradigm shift posed to the open web by answer engines. On Wednesday, though, it unveiled its Content Monetization Protocol Specification, i.e. a proposed framework for how publishers and AI firms might operate content marketplaces. The IAB Tech Lab has always had the unenviable job of trying to coordinate publishers into unified action, but such a Sisyphean task has arguably never been more necessary. The Tech Lab might have missed its hero moment with the cookie apocalypse that wasn’t, but maybe this could be its chance?
Fast Times at People Inc.: On Tuesday, I hosted a fireside panel with People Inc. chief executive Neil Vogel at the Marketecture Live event in Chelsea. Despite People Inc. (formerly known as Dotdash Meredith) being nearly synonymous with the now-shrinking open web, People Inc. has managed nine straight quarters of growth. When I asked Neil about how the company compensates for the declining Google Search traffic, he told me 40% of its business is growing—primarily licensing, Apple News+, and content syndication—while 60% is flat or declining. He also railed against Google, which continues to use one crawler for both search indexing and Gemini training, making it impossible for publishers to opt out of the latter and still show up in the former.
Gang Green: The CEO of The Trade Desk, Jeff Green, has recently posted public excoriations of both ADWEEK and AdExchanger, claiming that both outlets have been too critical of the $12.8 billion company he founded. In his defense, Green has put his money where his mouth is: On March 6, he bought $150 million of Trade Desk stock, a massive vote of confidence in the direction of the firm. But as someone who has covered The Trade Desk often in recent years, and whose colleagues have covered it doggedly (and accurately) in recent months, I am beyond proud of our coverage and frankly quite tickled to see its impact.
Social Media Week Returns: In just a few weeks, ADWEEK will once again be hosting Social Media Week, by far the coolest event in our portfolio and one whose insights can legitimately help make or break your brand. I will be on-site, moderating panels and trying not to look washed, and would love to see you there. So join ADWEEK, on April 14 – 16 in New York, to tap into the cutting-edge tactics powering social for the top brands, media outlets, agencies, and creators in the world. Click here to learn more.
Pulled Quotes
“Yesterday, I announced that this week I made the biggest purchase of my life.”
Trade Desk CEO Jeff Green, sharing why he bought $150 million of TTD stock
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“The idea that what’s going to happen in the world only matters because of how it impacts stock prices is a bit bizarre to me.”
Kalshi CEO Tarek Mansour, on why prediction markets are more useful than stock markets
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“I want to build the greatest collective of non-fiction writers in the English speaking world.”
The Atlantic editor in chief Jeffrey Goldberg, on the publisher’s profitable growth
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“I could retire. But if I did, I’d be bored.”
Twenty-year-old Roblox millionaire Chrollo, who earns eight figures a year from a game he developed on the platform
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Quote/Unquote
Lisa Hughes is the publisher and CEO of The Philadelphia Inquirer, which she joined in 2020 following a multiyear tenure as publisher and chief business officer of The New Yorker.
Under Hughes, The Inquirer has managed a methodical turnaround, generating a year-over-year revenue increase last year for the first time since 2004. The success is partially the result of a transformative investment the publisher received in 2015 from the philanthropist H.F. “Gerry” Lenfest, which provided the newsroom with the governance structure and resources it needed to retool itself for the digital era.
Now, with 70% of its revenue coming from subscribers, The Inquirer is set to embark on a number of growth initiatives this summer, hiring reporters to join its 200-person newsroom, expanding into new geographies, bulking up its events portfolio, and investing in lifestyle coverage.
This interview has been edited.
Mark Stenberg: The Inquirer was recently profiled for its use of artificial intelligence to power hyper-local reporting. How has that worked?
Lisa Hughes: Last year, financed by philanthropic backing, we launched newsletters in four markets: Lower Merion, Cherry Hill, Chester County, and Cherry Hill. In each, we use a proprietary tool called Scribe that listens to and transcribes public meetings, then categorizes, scores, and ranks those notes by newsworthiness. The newsletters, which now have around 50,000 subscribers, improved subscriber growth and retention by 2% to 5% in each market and have generated higher clickthrough rate than other newsletters. It has been so successful that we are launching 10 more this year and 10 more next year.
Mark: What is it about The Inquirer’s ownership structure that has enabled these kinds of breakthroughs?
Lisa: In 2015, we were bought out of bankruptcy by Gerry Lenfest, who established the Lenfest Institute for Journalism as our nonprofit owner and created a tax structure that created a for-profit Inquirer with a separate board. His ownership allowed The Inquirer to transform from a legacy print shop to a modern multiplatform news organization.
Mark: You are now expanding coverage, both by geography and vertical—a rare sight in local news.
Lisa: In June we are expanding into South Jersey, hiring between four to six new reporters to staff that effort. We are also expanding our weekend coverage, an initiative funded by philanthropy. If you visit our website on the weekend you will see a different design format, as well as new features like Field Trips, Perfect Philly Day, and the breakout hit How I Bought This House.
Mark: How is the company faring financially?
Lisa: Seventy percent of our revenue comes from a mix of digital and print subscribers, 19% from advertising, 5% from syndication, and 6% from philanthropy. We used to be a business led by advertising revenue, which is still important to us but now plays a smaller role. Overall, the pie has shrunk, but that transformation has enabled us to become a consumer-driven business.
Mark: How are things pacing for this year?
Lisa: We’re on track this year to reach our goals, but it didn’t hurt that last February the Eagles won the Super Bowl. That is great for business, but only if you have a plan in place to capitalize on it, which we did.