The inclusion of Netflix in quarterly earnings calls alongside established names like Disney, Comcast, Fox, and WBD highlights its rapid ascent in the sports media landscape. However, the scope of this involvement is still debated. Is Netflix merely pursuing select high-profile events, such as Christmas Day NFL games and boxing, to enhance its nascent ad business, or does it aspire to be a significant player in sports rights?
Currently, the sole rights deal Netflix has is with WWE’s RAW, which, while athletic, is categorized as sports entertainment due to its predetermined outcomes. During an analyst call, Rich Greenfield posed a question regarding Netflix’s interest in future rights for MLB, UFC, and Formula 1, to which Ted Sarandos, Netflix’s co-CEO, responded without providing specifics. He stated, “Our live event strategy is unchanged, and we remain focused on big breakthrough events that our audiences love, ensuring any deal we pursue makes economic sense.”
The term “big breakthrough events” implies a strategy focused on individual high-impact occurrences rather than a long-term league structure, apart from RAW. Sarandos highlighted the anticipated July rematch between Amanda Serrano and Katie Taylor, which drew significant attention and was noted for being the most-watched women’s sporting event in U.S. history, generating excitement about its future. “What we’ve observed with live events is a substantial influx of conversation and new subscribers, which we believe also aids retention,” he explained.
Retention concerns are particularly relevant when it comes to large events. For instance, after shows like the NFL Christmas Day games, the fear often is that fans may sign up just for those events and then unsubscribe. While Netflix executives were asked about potential churn from these games, they suggested that it isn’t a significant issue. Spencer Neumann, the CFO, noted that “the retention characteristics for members who joined for these major events are comparable to those who signed up for popular titles. Therefore, no notable changes in our retention metrics indicate good news from our perspective.”
In its shareholder letter, Netflix mentioned that WWE is performing exceptionally well, with Monday Night RAW achieving a spot in the Weekly Top 10 across 29 countries and consistently ranking within the Global Weekly Top 10 since its debut. Furthermore, since April 1, Netflix has been the exclusive home for WWE in India, offering live streams with Hindi commentary.
Additionally, the letter revealed plans for Netflix to expand its events business internationally. So far, the mix has included sports and entertainment-themed events, such as award shows and last year’s roast of Tom Brady. Executives also addressed economic concerns and tariffs, indicating no significant decline in consumer engagement and reinforcing the notion that entertainment services may be more recession-resistant than other sectors, a sentiment also voiced in relation to sports.
There is potential for new offerings like podcasts, which could be aligned with video platforms such as YouTube. Given the explosion of sports-related podcasts, it’s likely that some will find a home on Netflix.
