For years, Netflix co-CEO Ted Sarandos promised that the streaming service that boasts 270 million subscribers had no real interest in getting concerned in stay sports activities programming.
That philosophy has modified in a significant manner in current months, particularly with the information that Netflix secured a cope with the NFL to deliver Christmas day video games to the streaming service for the subsequent three years. The partnership launches in 2024 with a pair of video games that includes the Kansas Metropolis Chiefs vs. the Pittsburgh Steelers and the Baltimore Ravens vs. the Houston Texans.
No monetary particulars surrounding the deal had been revealed, however contemplating Amazon paid $1 billion per yr for a single sport every week on Thursday nights, it’s protected to say Netflix didn’t get a cut price low cost when negotiating with the NFL.
“Final yr, we determined to take a giant wager on stay — tapping into huge fandoms throughout comedy, actuality TV, sports activities, and extra,” Netflix chief content material officer Bela Bajaria stated in a press launch. “There aren’t any stay annual occasions, sports activities or in any other case, that evaluate with the audiences NFL soccer attracts. We’re so excited that the NFL’s Christmas Day video games shall be solely on Netflix.”
The soccer video games headed to Netflix kick off 5 months after the upcoming boxing match between Jake Paul and Mike Tyson, which matches down on July 20 from AT&T Stadium in Arlington, Texas. Netflix additionally paid $5 billion to land the WWE’s flagship present Monday Night time Uncooked, which begins broadcasting on the streaming platform in 2025.
Regardless of Netflix executives pushing again in opposition to an entry into stay sports activities programming for years, it appears like 2024 is the yr that lastly modified these plans. It doesn’t harm that Netflix boasts the most important subscriber base by a large margin with 270 million subscribers and Amazon sitting at a distant second place with 200 million subscribers — that latter determine is not less than partially as a result of Amazon Prime service that many shoppers use totally free specific transport slightly than streaming the newest episodes of Fallout or The Boys.
With Netflix now clearly invested in stay sports activities programming, what’s subsequent? Nicely, the straightforward reply is the UFC.
The UFC’s broadcast rights are unique to ESPN by 2025, however it’s no secret that negotiations on a brand new contract are anticipated to kick off quickly. ESPN has an unique negotiating window beginning in January the place the community can lock down the UFC with out permitting the group to even discipline affords from different bidders, though it’s extremely unlikely the 2 sides attain an settlement earlier than that deadline expires.
TKO Group Holdings President Mark Shapiro has spoken glowingly in regards to the relationship that the UFC shares with ESPN, particularly after inking a deal that included pay-per-view broadcasts — one of the crucial profitable elements of your entire UFC enterprise mannequin. ESPN stays the gold normal for sports activities broadcasting, however the community has taken a lot of hits lately that has resulted in different gamers taking a giant chunk of the market.
Past linear tv (i.e. cable, satellite tv for pc, and so on.) dealing with a tumultuous future, ESPN’s homeowners at Disney have brazenly touted plans to hunt out companions within the enterprise, which suggests new homeowners investing within the firm. Disney doesn’t need to quit a controlling curiosity, however an inflow of money as an funding in ESPN actually wouldn’t harm.
To make issues even murkier, ESPN only in the near past introduced the launch of Venu Sports activities — a sports-specific streaming service launching within the fall of 2024 that brings collectively channels from ESPN, FOX and Warner Bros. Discovery in a three way partnership. Which means ESPN is partnering with networks that the corporate beforehand seen as rivals.
CNBC estimated the service may run round $45 to $50 per thirty days.
ESPN additionally faces one other costly broadcast rights negotiation with the NBA at the moment looking for a brand new deal. The NBA is at the moment break up throughout two networks with ESPN/Disney and Turner Sports activities (a division of Warner Bros. Discovery), however there are new bidders that would balloon a brand new deal to astronomical numbers.
In reality, NBCUniversal is trying to steal away not less than a part of the bundle of video games after making a whopping $2.5 billion per yr supply to the NBA.
Whereas all indicators level to Disney/ESPN sustaining the partnership with the NBA, that price ticket goes to hit the corporate proper within the backside line when that deal kicks in. That might pressure ESPN — or extra importantly the powers-that-be at Disney — to make some arduous choices about the place cash must be spent on future broadcast rights offers.
The UFC has remained a invaluable asset for ESPN, particularly with the launch of the ESPN+ streaming service. However with ESPN+ subscribers falling for the previous two quarters, and in three of the previous 4, it’s troublesome to guess what Disney does when filling out a want record for future companions.
As a result of the UFC is probably going going to hunt double the worth from the earlier bundle signed with ESPN — some estimates attain $3 billion or extra — it opens the door for one more potential suitor like Netflix to swoop in for the kill. Netflix clearly boasts much more subscribers — 270 million vs. 24.8 million for ESPN+.
Even should you add in linear tv, ESPN is simply obtainable in simply over 70 million households and that doesn’t come near Netflix on a worldwide scale.
There’s no telling if Netflix is actually fascinated with shopping for all or among the UFC’s broadcast rights, however the truth that the streaming service is already partnered with WWE opens the door to constructing that relationship. No person noticed Netflix coming when WWE introduced the 10-year deal to maneuver Monday Night time Uncooked there in 2025, however it’s unimaginable to not assume the UFC gained’t discover that choice contemplating they share the identical homeowners because the skilled wrestling outfit.
There’s additionally a fantastic risk that the UFC seeks a break up bundle much like the NBA, which suggests a part of the corporate’s program stays with ESPN and one other half finally ends up with a special associate like Netflix. That might doubtlessly permit the UFC to maintain the present pay-per-view mannequin intact with ESPN however then present stay occasions and shoulder programming like specials, documentaries and extra to a different associate like Netflix.
Along with Netflix, different streaming platforms like Apple TV and Amazon may get into the bidding. Nonetheless, whereas these corporations have the cash to burn, they don’t have the 270 million subscribers that Netflix has.
The truth that Netflix is leaping head first into stay sports activities programming in 2024 can solely imply issues are going to get extra attention-grabbing when the UFC begins in search of a brand new deal that begins in 2026.
