Netflix is exploring the possibility of investing in sports leagues to add live sports streams to their catalog. Adding live sports to Netflix would be another attraction for new subscribers to the company, something that streams like HBO Max, Prime Video, and Star + are exploring.
The company has entered into talks to make the idea of offering live sports on its platform a reality, according to The Wall Street newspaper🇧🇷 However, Netflix would not be willing to “break the bank” and keep up with the skyrocketing costs of broadcasting rights for the big leagues.
Recently, Netflix entered the fray for the broadcasting rights of the ATP Tour world tennis circuit in some European countries, including France and the UK, but eventually withdrew. Additionally, the stream is said to have also discussed playing various events, including those of the Women’s Tennis Association and cycling competitions, sources told the WSJ.
Another option discussed internally, to avoid getting into very onerous sports rights litigation, would be the acquisition of minor leagues. Netflix has reportedly discussed the acquisition of the World Surf League, but negotiations have not progressed as the organizations have not been able to reach a price acceptable to both parties.
Netflix’s acquisition of minor league rights would be attractive to them because, according to some streaming executives, the platform could transform lesser-known and popular sports – like surfing – into big franchises, generating the creation of new tournaments or sport events.
The fight for sports rights between streaming is increasingly heated, and the investments of Netflix rivals in the area justify the interest. In the United States, Amazon via Prime Video is now the home of Thursday Night Football, the Thursday night game of the NFL. Apple TV + and Peacock had the exclusive rights to broadcast specific games from MLB, the baseball league, last season.
Just this year, Netflix struggled to acquire the rights to Formula 1, a sport that has become increasingly popular in the United States thanks to the Netflix docuseries “F1: Drive for a Living”. However, the company lost the battle for F1 rights to ESPN.
Netflix executive co-chair Reed Hastings said at meetings that he doesn’t want to get involved in auction wars every few years, according to people familiar with the discussions. This is partly why some executives are pushing to buy shares in sports leagues.
Sports are extremely attractive to advertisers because they are among the rare types of programming that people still watch live. Even devoted fans of a specific league are likely to keep their season tickets at least until the end of the season. This helps reduce customer defections, another major problem for streaming services.
Despite being extremely attractive, the broadcasting rights of major sports leagues come at a high price. In the United States, a total of $ 21.3 billion in sports broadcasting rights are paid, according to analysts at MoffettNathanson. This amount was $ 16.95 billion in 2019.
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