Netflix, NFL deal reflects push to build out live events programming, not just sports

Netflix on Wednesday made big news with the announcement that the SVOD giant will be the exclusive home for live NFL Christmas Day games under a new three-season deal with the professional football league.

Specifically, Netflix secured rights to stream two Christmas Day marquee games in 2024 and “at least one holiday game” each year in 2025 and 2026.   

And while this marks a major sports score for the streamer, Netflix VP of Finance, Investor Relations and Corporate Development Spencer Wang indicated that the move is not all about sports but more broadly reflects a desire to build up programming through live events that tap into large audiences and consumer fandom and relevance.

“Think of this as really more part of our strategy to build out big live ‘eventized’ programming, rather than a big move into sports, per se,” said Wang regarding the NFL deal, speaking Wednesday at the MoffettNathanson Media, Internet & Communications investor conference.

He pointed to earlier jumps into the live streaming space, where Netflix wants to capitalize on consumer passion around comedy, reality TV, sports and entertainment. That includes its first foray roughly a year ago with a live Chris Rock stand-up comedy special, and more recently a roast of Tom Brady.

What it has learned is “those types of programming can really deliver huge breakthrough moments that our audiences really love. And we’re going to continue to build on that strategy,” Wang said.

Teed up next is a live heavyweight boxing match between Mike Tyson and Jake Paul in July, as well as live WWE Raw programming coming to the platform in January 2025 under a 10-year $5 billion deal.

He noted that “not all hours of viewing are created equal” and programming centered on events like those mentioned help create a type of engagement that’s uniquely important both to consumers and to Netflix’s business.

“Because in a world of audience fragmentation and so many entertainment choices, I think what’s really rare are three things – attention, the ability to bring mass audiences together, and thirdly, really passionate viewing” Wang continued, adding the NFL “really fits in well with that strategy.”

“Really think of this as an extension of that approach” to build out big live “eventized” programming, he commented.

As for deal terms with the new NFL rights, Wang declined to comment on specifics including a WSJ report that said Netflix is paying around $75 million per NFL game this year, citing unnamed sources familiar with the matter.  That said, the Netflix VP categorized the NFL deal as a “very manageable cost.”

For more context, he likened the cost to Netflix for each NFL game “as roughly the size of one of our medium size original films.”  The investment outlay fits within Netflix’s existing content budget of around $17 billion in cash spending for this year, “so no impact on our operating margin guidance,” Wang added.

Bringing big audiences together for event programming could also benefit Netflix’s advertising ambitions, where it’s looking generate lucrative adverting revenue but is still working to build up a scaled base on its plan with ads that launched in late 2022. In Q1 Netflix said membership on the ad plan grew 65% quarter over quarter but didn’t release a new subscriber count since it’s last tally of 23 million monthly active users.*Update: Netflix on Wednesday disclosed fresh counts for its ad-supported plan, which now has 40 million monthly active users - nearly double its last tally. 

And the NFL can attract viewers including on streaming, as was seen with Peacock’s exclusive coverage of an NFL Wild Card playoff game earlier this year, which drew more than 23 million viewers for a single matchup.

Netflix, meanwhile, has also previously created its own live sporting events that tie in with original serialized content on the platform, leveraging fandom through different formats. That includes The Netflix Cup, which was a live November all-star golf tournament featuring PGA tour players and F1 drivers from Netflix’s Formula 1: Drive to Survive and Full Swing series. And its WWE deal allows for Netflix to develop original programming around WWE storylines and characters.

The company already has NFL content teed up, announcing “Receiver,” an eight-episode series premiering this summer that follows five top NFL pass catchers on and off the field through their 2023 season. That content follows Netflix’s 2023 NFL-related series “Quarterback.”  

Event programming can have an ‘outsized impact,’ producing live NFL games TBD

As Netflix gets more event-focused programming under its belt, Wang said one thing the company has realized from earlier efforts like Netflix Slam (a live tennis exhibition match between Rafel Nadal and Carlos Alcaraz, which was streamed globally), is that “eventized programming can have an outsized impact.”

“If you can tie in those things…big moments that really matter to consumers, that are very pervasive throughout the society or that group…that audience cohort, it can be really impactful,” he commented.

MoffettNathanson analysts Michael Nathanson and Robert Fishman also questioned Wang on Netflix’s ability to produce a live NFL game, as they noted it’s not an easy task and the firm has always heard this capability historically has been a hurdle for companies in their efforts to secure sports rights.

At this point, it appears Netflix is still figuring things out. Wang said there’s “a rough plan in place” but “TBD” for now.  Still, it’s part of the learning process, where the VP pointed to earlier Netflix-hosted events and said, “we’re building that muscle” while categorizing the streamer as a “learning machine.”

And with WWE live events on deck for 2025, Wang suggested the regular cadence of programming will help the company refine its skills to deliver live content for viewers.

Article updated with latest figures for users on Netflix's plan with ads.