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Netflix gets NFL Christmas Day games, a fire-breathing shot at its competitors

“Sports-adjacent.” That was the term we’ve often heard from Netflix’s C-suite whenever the company would address its live sports aspirations.

Sure, Netflix was happy to invest in well-received docu-series such as “Formula 1: Drive to Survive” or “Quarterback” or “Full Swing.” Yes, you might see one-off exhibition events such as The Netflix Cup, The Netflix Slam, or the upcoming P.T. Barnum-inspired bout between Mike Tyson and Jake Paul. Even Netflix’s recent deal with WWE — paying more than $5 billion for exclusive rights to the long-running “Raw” franchise, along with other rights outside the U.S. — could be tagged as sports-adjacent given WWE falls under sports entertainment.

Netflix’s sports ambitions have created small waves but nothing like fellow streamers Peacock and Amazon, which have forged helmet-first into the live sports rights race with the NFL in the U.S., the NHL in Canada, and what looks to be a piece of the NBA’s upcoming rights deal.

But Wednesday represented a seismic shift for the streaming giant with the announcement that it has landed exclusive rights to stream two NFL games on Christmas Day 2024. The three-season deal also includes a game on Christmas Day in 2025 and 2026. These games will air on broadcast TV in the competing team cities and also will be available on U.S. mobile devices with NFL+.

If you enjoy “Game of Thrones” or “House of the Dragon” analogies, here is what just happened: Netflix has uttered “Dracarys” in the direction of their competitors. (For the non-GOT fans, “Dracarys” is a command for dragons to breathe fire; it pretty much means everyone else is doomed.) With about 270 million subscribers globally and 80 million in the U.S. and Canada, Netflix being any kind of player for live sports rights should scare the bejesus out of the traditional linear powers because of its financial might.

“This is 100 percent consistent with what we expected and follows the model developed by basic cable to move up the consumer value chain by adding live sports,” said Michael Nathanson, the co-founder and senior managing director of research firm MoffettNathanson, which provides trends in media, communications and technology to institutional investors.

Nathanson has covered Netflix for years and said he was not surprised at the NFL grab. The analyst said that over the years he had learned to watch what Netflix does and not what they say. Netflix has moved from a pure subscriber company to one that’s now swimming in the advertising business, as this Business Insider piece explains. They want to scale ads, and there are few better content plays to sell ads against then NFL games.

“I think Netflix is officially in the feel-things-out stage,” said Patrick Crakes, a sports media consultant and former senior executive at Fox Sports. “They’ve already committed to the one sports media property that’s a perfect fit for their entertainment-focused subscriber base in WWE, and we’re a couple years from any traditional Tier 1 sport that has a game-centered format being available for investment once the NBA deal is completed. So this is about branding and experimentation for Netflix and other potential streaming partners while the NFL gets a chance to try out new platforms and partners while over-earning on a handful of games.”

When asked whether Netflix’s sports strategy is changing during an earnings call in April, co-CEO and director Ted Sarandos said the company was not anti-sports, but pro-profit and growth.

“Our North Star is to grow engagement, revenue and profit, and if we find opportunities to drive all three of those, we will do that across an increasingly wide variety of quality entertainment,” Sarandos said. “So when and if those opportunities arrive, which we feel like we did in our deal with WWE, if we can repeat those dynamics and other things, including sports, we’ll look at it for sure.”

Netflix Quarterback

Netflix had entered the NFL entertainment world with its “Quarterback” docu-series. Now it’s entering the live game space. (Chris Delmas / AFP via Getty Images)

“I used to interview (Sarandos) 10-12 years ago when I was at another firm, and he was like, ‘I’m not going into original content, that’s a risky business,” Nathanson told The Athletic a couple of months ago. “‘We’re not going to make movies, that’s a tough business.’ I think the issue that Netflix is going to have is there’s an upper band on their ability to price. There’s a point at which I say to my family — for, say, $25 a month — ‘I’m sorry, but it’s maybe an hour and a half of our day.’ It’s a ton of money. But if you add sports, the history of sports pricing is pretty powerful, right? Look at the price of tickets to baseball games these days for 81 games a year. I think it will drive pricing, and I think it would also be better ROI than the films they’re making.”

Crakes said one-off games without a long-term commitment work for streamers because they can gain findings about how they’d handle Tier I sports without having to invest in significant game inventory (not to mention most NFL inventory is under contract through 2033).

“‘Sunday Night Football’ started out as one-offs that eventually evolved into a full slate of top games on NBC several decades later, so what’s a one-off today can often become the distribution strategy of the future, and of course, that means subscribers could be looking at increased fees in the future,” Crakes said. “Consumers should be aware that the NFL is experimenting with new possible partners, and it could set the stage to schedule games regularly and exclusively on a Netflix or a Peacock, which would make both services more expensive. Is that happening next season? No. Could it happen when the NFL goes through its look-in period in a few years? For sure.”

It feels like a sea change in sports rights, even if the inventory is only for a couple of games. How Netflix will present the NFL is a major question, but an entity such as the 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 area, but Amazon proved very quickly that money and hiring the right people can create that structure. It may take some time — and it’s costly — but money is the asset Netflix has.

So sports consumers should heed the advice of Nathanson: Pay attention to what Netflix does and not what they say because what they just did was enter the NFL game space.



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(Top photo of Kansas City Chiefs quarterback Patrick Mahomes at the 2023 premiere of Netflix’s “Quarterback” docu-series: Steve Granitz / FilmMagic via Getty Images)

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