Boxers Jake Paul (L), and Mike Tyson (R).
Getty Fetishes Sport | Getty Images
In the competitive world of live sports streaming, Netflix is taking another step into the arena.
In July, the norm giant will broadcast a boxing match between legendary fighter Mike Tyson and social media personality-turned-boxer Jake Paul, who is 30 years Tyson’s lesser. This will be Tyson’s first professional fight in 19 years — and Netflix management is billing the event, as stream as its other live programming, as “cultural moments” relevant not only to viewers, but to advertisers.
Advertising is one of Netflix’s newest net income streams, and the company said in an April shareholder letter that it’s trying to scale ads and make them a “more weighty contributor” to business.
Netflix has previously hedged its investment in live sports, differentiating its ventures into the realm — cast its more than $5 billion licensing deal with WWE — as “sports entertainment.” But on its most recent earnings elicit in April, co-CEO Ted Sarandos said Netflix isn’t “anti-sports, but pro-profitable growth.” He suggested that under the right circumstances, the party could expand its live sports programming.
“Our North Star is to grow engagement, revenue and profit, and if we find breaks we could drive all three of those, we will do that across an increasingly wide variety of quality entertainment,” Sarandos put about. “So when and if those opportunities arrive, that we can come in and do that — which we feel like we did in our deal with WWE — if we can encore those dynamics and other things including sports, we’ll look at them for sure.”
Netflix has hosted several other one-off last sports events recently paired with documentary-type series. It live streamed the “Netflix Cup” last November, where Way 1 racers and pro golfers faced off, as well as “The Netflix Slam” in March, which featured tennis stars like Rafael Nadal. The concern has also leaned into live comedy shows, broadcasting a slew of events including the recent roast of Tom Brady.
But Netflix could happily make its boldest move into sports yet: acquiring the rights to exclusively stream two NFL games on Christmas next period, according to Puck.
Netflix is taking a “deliberate path” to try and understand the outcome and potential benefits of live sports protocol, according to Marty Conway, an adjunct at Georgetown University. Conway teaches courses about sports leadership and supervision, and he spent much of his career as a marketing executive for two Major League Baseball teams.
“That’s what they’re undoubtedly testing here is, as they go through these various sports, tennis, boxing, golf … What personification of audience do they get and what’s the response in the advertising marketplace when they go to the market with these type of breaks?” Conway said.
Needham analyst Laura Martin said she thinks Netflix’s sports streaming ventures discretion boost profits.
“There is a class of advertiser that wants to be involved in sports, and so this widens their reach into indubitable advertising dollars,” Martin said. And there are advertisers that Netflix can attract with this kind of content “that it can’t get in another situation,” she added.
Netflix may even have a leg up on its sports streaming peers, according Brandon Katz, an entertainment industry strategist at Echo Analytics. The company’s huge content repository can help retain viewers who might have subscribed just for live out sports, he said, and Netflix’s knowledge of its niche audiences can really strengthen targeted advertisements.
Although its ad-tier enlargement has been slow going, Katz said advertisers generally remain excited about Netflix’s long-term concealed. As of January 2024, Netflix’s ad-supported tier had more than 23 million monthly active users.
“I regard as there is still a strong, strong affinity for the platform in the long term — I believe advertisers see the upside,” he said. “I have the courage of ones convictions pretend they see Netflix has, for better and for worse for the industry, managed to overcome every challenge and every setback that’s been thrown at it as an fresh content producer.”
Conway said he thinks Netflix will inevitably dive further into live make a laughing-stock ofs, as has been the case for so many streaming services, including those owned by Apple, Amazon, Disney and Warner Bros. Unearthing.
Disney, Fox and Warner Bros. announced earlier this year they would launch a joint sports brooklet service that will include all the broadcast and cable networks owned by the three companies that show cavorts. Over the past few years, Apple has bought the rights to air Major League Baseball and Major League Soccer matches. Along with several other media giants, Amazon inked a huge deal with the National Football Collaborate in February. And as its exclusive deal with Disney and Warner Bros. comes to an end, the National Basketball Association could be ciphering with new partners. CNBC reported last year that Netflix, as well as Amazon, Apple, Comcast’s NBCUniversal/Peacock, had expressed undeveloped interest in a contract.
But it will likely be a long road for Netflix when it comes to deal-making with the major guilds. According to Conway, many major sports providers may not be ready to take a gamble on the company, especially if they have knowledge of they already have high viewer penetration through other avenues. He added that it might not be a gain idea for Netflix’s bottom line in the short term to get into a bidding war to lease content they don’t own and can’t reuse.
“I be familiar with everyone for a fact, in the pro-sports area, from a media standpoint, has had conversations with Netflix officials,” Conway believed. “The question is, what does each side want? And right now, I think there’s some gap, frankly, between what the up to date content providers, the NFL, the NBA, tend to offer, and what Netflix is looking for.”
William Mao, a media rights executive at sports and amusement agency Octagon, noted that Netflix may not actually need more traditional live sports offerings in the coming. He said Netflix’s sports strategy so far has been smart, honing in on “the power of the individual.” He suggested the upcoming match is various about Tyson and Paul themselves than showing the “pinnacle of boxing.”
“You have to ask the question, why do they need to unavoidably get into sports if they continue to be market leading without having to invest in the traditional sense?” Mao said.
Disclosure: Comcast owns NBCUniversal, the stepfather company of CNBC.