“Sports Adjacent.” These were the words we often heard from executives at Netflix whenever they talked about their commitment to live sports.
Indeed, Netflix was willing to invest in well-received documentary series like “Formula 1: Drive to Survive,” “Quarterback” and “Full Swing.” Yes, there might be a Netflix Cup, a Netflix Slam, or his one-off exhibition events like the upcoming PT Barnum-inspired match between Mike Tyson and Jake Paul. Even with Netflix's recent deal with WWE (paying more than $5 billion for exclusive rights to the long-running “Raw” series and other rights outside the U.S.), given that WWE falls under sports entertainment, , could be tagged as sports-adjacent.
Netflix's sports ambitions are making small waves, but fellow streamer Peacock has entered the race for live sports rights helmet-first with the NFL in the US, the NHL in Canada and what appears to be part of the NBA. There is no such thing as Amazon. Future rights transactions.
But on Wednesday, the company announced it had acquired exclusive rights to stream two NFL games on Christmas Day 2024, marking a seismic shift for the streaming giant. The three-season deal also includes Christmas games in 2025 and 2026. These matches will be broadcast. It will be available to watch on competing team city TV broadcasts, as well as on mobile devices in the US with NFL+.
If you like the Game of Thrones and House of the Dragon analogies, take a look at what just happened. Netflix has said “dracari” to its competitors. (For non-GOT fans, “Dracarys” is a dragon's command to breathe fire. It pretty much means everyone else is doomed.) Approximately 270 million people worldwide, U.S. And with 80 million subscribers in Canada, Netflix is a service of all kinds. Players seeking live sports rights need to push the bejesus out of traditional linear power because of their financial power.
“This is 100 percent in line with our expectations and follows the model that Basic Cable has developed to move up the consumer value chain by adding live sports,” said Moffett Nathanson, co-founder and director of research firm Moffett Nathanson. said Michael Nathanson, Senior Managing Director. We provide institutional investors with trends in media, communications, and technology.
Nathanson has covered Netflix for years and said he wasn't surprised by the NFL's acquisition. The analyst said he has learned over the years to watch what Netflix is doing, not what it says. As explained in a Business Insider article, Netflix has transitioned from a pure subscriber company to one that is now in the advertising business. They want to scale their advertising, but there are very few content plays that are suitable for selling ads for NFL games.
“I think Netflix has officially entered the assessment stage,” said Patrick Crakes, a sports media consultant and former Fox Sports senior executive. “They have already zeroed in on the single sports media asset that best suits WWE's entertainment-focused subscriber base, and are only a few days away from traditional Tier 1 sports with game-centric formats becoming investable. It will take a year.'' Once the NBA contract is completed. So this is branding and experimentation for Netflix and other potential streaming partners, giving the NFL a chance to try out new platforms and partners while making excessive revenue on a small number of games. ”
When asked during an April earnings call whether Netflix's sports strategy would change, co-CEO and director Ted Sarandos said the company is not anti-sports, but pro-profit and pro-growth. He said that
“Our North Star is to grow engagement, revenue and profit, and as we identify opportunities to drive all three, we intend to do so across an increasingly diverse range of high-quality entertainment.” Sarandos said. “So whenever an opportunity like that comes along, like we did with the WWE deal, if we can repeat that dynamic and other things (including sports), we're definitely going to consider it.” is.”
Netflix entered the world of NFL entertainment with the documentary series “Quarterback.” Now we have entered the realm of live gaming. (Chris Delmas/AFP via Getty Images)
“I interviewed[Sarandos]10 or 12 years ago when I was at another company, and he was like, 'I don't want to do original content, it's a risky business,'” Nathanson said. he said. The Athletic months ago. “'We're not going to make movies, it's a tough business.'” I think the problem Netflix will face is that there is a cap on its pricing ability. For example, if you pay $25 a month, I might say to my family, “I'm sorry, but this might be an hour and a half out of his day.” That's a lot of money. But when you add in sports, the history of sports pricing is pretty strong, right? Just look at ticket prices for baseball games these days (81 games a year). I think that will drive pricing, and I think he'll have a better ROI than the movies they're making. ”
Crakes said one-shot games without long-term contracts work well for streamers. That's because it allows you to get insights into how to handle tier 1 sports without having to invest in large gaming inventory (not to mention, most of the NFL's inventory is under contract through 2033). ).
“'Sunday Night Football' began as a one-off show and decades later eventually evolved into a full set of NBC's top games, so what is currently a one-off show is unlikely to be the distribution strategy of the future. “Often. And of course, this means that subscribers may be looking at rate increases in the future,” Crakes said. “Consumers should be aware that the NFL is experimenting with potential new partners, and could be ready to schedule games regularly and exclusively on Netflix and Peacock. Prices for both services could go up. Will that happen next season? No. Could that happen when the NFL goes into consideration in a few years? Certainly.
Even if the stock is only for a few games, this feels like a big change for sports rights. How Netflix presents his NFL is a big question, but an organization like NFL Network would be a ready-made solution for production and on-air talent. Sure, ESPN, Fox, NBC, and CBS have decades of experience in this space, but Amazon quickly proved that with money and hiring the right people, that structure can be built. It may take time and it may cost money, but the asset Netflix has is money.
So sports consumers should follow Nathanson's advice. “Pay attention to what Netflix is doing, not what they're saying, because all they did was get into the NFL game.”
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(Top photo of Kansas City Chiefs quarterback Patrick Mahomes at the 2023 premiere of the Netflix documentary series “Quarterbacks”: Steve Granitz / FilmMagic via Getty Images)
