Netflix’s $500M annual deal with WWE, signed in January 2024, will bring the three-hour Monday night event Raw to Netflix subscribers in the U.S., UK, Canada, and Latin America beginning 2025. Ampere Analysis went over the platform’s strategy and a possible beginning of a push into acquiring other live sport rights.
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 maximizing revenues from its (particularly ad-tier) subscribers will be key for the streamer going forward, as subscriber growth starts to slow globally. Even though 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 23M 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 was not before.
WWE is an internationally recognised brand; it runs live 52 weeks a year; and has a rich seam of existing ancillary content, with the potential to generate more. Looking at these same criteria across other sporting events, 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).
One particularly interesting option for Netflix would be the international (non-U.S., non-China) rights to the NBA. The domestic rights to the league are likely too expensive (at around $2bn 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. Internationally, outside of China, Ampere estimates NBA rights currently sell for a cumulative total of around $155m per season, considerably less than the $500M paid for the WWE rights.
The attraction of the NBA is that it possesses the highest engagement of any of the sports shortlisted, with 22 of the 27 countries surveyed showing over 4% 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 catalog 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.