Report: NBA rights could interest Netflix
March 28, 2024
Netflix’s mammoth WWE deal, signed in January, will bring the iconic Monday night Raw series to Netflix subscribers in the UK, US, Canada, and Latin America from 2025. While Netflix has enjoyed strong subscriber growth in recent quarters, thanks to the introduction of its cheaper ad-supported tier and its crackdown on account-sharing, a shift in priority towards reducing churn and maximising revenues from its (particularly ad-tier) subscribers will be key for the streamer going forward, as subscriber growth starts to slow globally.
This move for WWE rights – aimed at supporting that strategy – is the first of its kind for Netflix, but, Ampere Analysis asks, is it the beginning of a push from the streamer into acquiring other live sport rights?
Rory Gooderick, senior analyst at Ampere, writes: “While Netflix has not said it will explore additional sports rights at this stage, given Netflix’s stated intention to expand its live content offering, and specifically the rapid ramp-up of live sports content that it has been showing, the WWE deal is a strong indication that Netflix may be finally play a bigger role in the ‘traditional’ sports rights market. Additionally, with the growth of monthly active advertising users on the service – reported at 23 million as of the end of 2023 – Netflix will soon be in a position to profit directly from large audiences watching live content in a way it wasn’t before”.
Each of these factors adds plausibility to the idea of Netflix selectively purchasing more live rights, for suitable properties. So if the streamer were to buy rights to another sport, which would fit the bill? To assess this, Ampere analysed a range of sports events and leagues based on the aspects of the WWE deal which made it most attractive to Netflix:
- Domestic and international popularity
- Willingness to pay
- Seasonality of sport/event
- Current cost of rights
- Potential for ancillary content
WWE fits all of these categories well. Looking at these same criteria across other sporting events, Ampere believes that several options stand out: such as the UEFA Women’s Champions League, the ATP and WTA tours in Tennis, and the Ultimate Fighting Championship (UFC).
But one particularly interesting option for Netflix would be the international (non-US, non-China) rights to the NBA. The domestic rights to the league are likely too expensive (at around $2 billion per year) to be viable at this time – should Netflix want domestic NBA rights, a more viable route would be through exclusive access to the In-Season Tournament . But internationally, outside of China, Ampere estimates NBA rights currently sell for a cumulative total of around $155 million per season, considerably less than the $500 million paid for the WWE rights.
The attraction of the NBA is that is possesses the highest engagement of any of the sports shortlisted, with 22 of the 27 countries surveyed showing over 4 per cent of consumers already engaging with the league, including particularly large fanbases in APAC and Latin America. Additionally, these fans report a high willingness to pay to watch the NBA, and with many globally recognised names in the league such as Steph Curry, LeBron James, and Kevin Durant, the potential for ancillary content would be significant. Moreover, the NBA season runs from October to June, with a continuous catalogue of thousands of games, and NBA highlights represent a big, non-live content opportunity.
The NBA rights will be up for renewal in many key territories over the next few years, and would provide a significant opportunity for Netflix to expand its portfolio further with a globally recognised brand.