Netflix's Expanding Role in Live Sports Broadcasting: NFL On Netflix Next Winter?

Licensing Agreement with WWE Worth $5 Billion, Netflix Cup, The Netflix Slam, Jake Paul vs. Mike Tyson, and now allegedly next year for Christmas, we could watch NFL on Netflix

by Sededin Dedovic
Netflix's Expanding Role in Live Sports Broadcasting: NFL On Netflix Next Winter?
© Mario Tama / Getty Images

In the competitive world of live sports streaming, Netflix is taking another significant step into the arena, adding its own stamp to the already rich range of content it offers. The tech giant has, perhaps unexpectedly for some, announced its plan to broadcast a boxing match between two exceptional personalities - legendary boxer Mike Tyson and popular boxer-turned-social media star Jake Paul.

This event marks Tyson's return to the professional ring after nearly two decades. Given the high level of attention the event is attracting, Netflix will bill it, along with other live programming, as "cultural moments" relevant not only to viewers, but also to advertisers.

Advertising, which has become one of Netflix's newest revenue streams, shows the transformation taking place within the media company. In a letter to shareholders in April, Netflix expressed its intention to increase ad revenue and make it a significant contributor to its business.

This move suggests that Netflix is becoming more open to new revenue strategies and is actively looking for new ways to expand its influence and profitability in the market. Netflix has previously hedged its investments in live sports, differentiating its ventures in the area — such as a $5 billion licensing deal with WWE — as "sports entertainment." But at its most recent earnings call in April, co-CEO Ted Sarandos said Netflix was "not anti-sports, but profitable growth." He suggested that under the right circumstances, the company could expand its live sports programming.

"Our North Star is to increase engagement, revenue and profit, and if we find opportunities to drive all of that, we'll do it through an ever-increasing selection of quality entertainment," Sarandos said, according to CNBC.

"So when and if those opportunities come, that we can come and do that — which we feel like we've done in our deal with WWE — if we can replicate that dynamic and other things, including sports, we'll certainly look at them." Netflix has recently hosted several other one-off live sports events tied to documentary series.

It live-streamed the "Netflix Cup" last November, which pitted Formula 1 racers against professional golfers, as well as "The Netflix Slam" in March, which featured tennis stars like Rafael Nadal. The company has also relied on live comedy shows, airing a host of events including the recent roast of Tom Brady.

Rafael Nadal arrives at The Netflix Slam, a live Netflix Sports event at the MGM Resorts | Michelob Ultra Arena on March 03, 202© David Becker / Getty Images

But Netflix may soon make its boldest move in sports yet: acquiring the exclusive rights to two NFL games on Christmas Day next season, according to Puck.

Netflix is taking a "deliberate path" to try to understand the outcome and potential benefits of live sports programming, according to Marty Conway, an assistant professor at Georgetown University. Conway teaches courses in sports leadership and management, and spent most of his career as the executive director of marketing for two Major League Baseball teams.

“That's what they're probably testing here, as they go through different sports, tennis, boxing, golf... What kind of audience are they getting and what's the response in the advertising market when they go out to market with these types of opportunities?” Conway said.

In addition to attracting new subscribers and viewers, live sports programming can generate additional advertising revenue. Laura Martin, an analyst at Needham, points out that Netflix's sports streaming ventures are likely to boost the company's profits.

Netflix can attract new advertisers interested in this type of content that may not be traditionally associated with sports broadcasts. "There's a class of advertisers that want to be involved in sports, so it expands their reach into certain advertising dollars," Martin said.

And there are advertisers that Netflix can attract with this kind of content "that it can't get any other way," she added. Netflix may even outperform its peers in sports streaming, according to Brandon Katz, entertainment industry strategist at Parrot Analytics.

The company's vast store of content can help retain viewers who may have only subscribed to live sports, he said, and Netflix's knowledge of its niche audience can really strengthen targeted ads. Although growth in its advertising levels has been slow, Katz said advertisers generally remain excited about Netflix's long-term potential.

As of January 2024, Netflix's ad-supported tier had more than 23 million monthly active users. "I think there's still a strong, strong affinity for the platform in the long term — I believe advertisers see the upside," he said.

Conway said he believes Netflix will inevitably dive even further into live sports, as has been the case with many streaming services, including those owned by Apple, Amazon, Disney, and Warner Bros Discovery. We live in a very dynamic time when it comes to "entertainment," and Netflix constantly pushes the boundaries.

Netflix Jake Paul Mike Tyson