Netflix takes a swing at live sports

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Fbefore Korean horror to Palestinian romance, Netflix covers every genre – almost. Among tens of thousands of hours of video on its servers, the world’s largest streaming platform misses the segment that attracts more audiences to television than anything else other: live sports.

That will change at 3pm on November 14 in Las Vegas with the Netflix Cup, a famous golf tournament that will be broadcast live to the company’s 250m subscribers. The unconventional show, which features teams made up of professional golfers and Formula One racing drivers, is billed as a one-off. Maybe it’s a warm-up for something bigger.

Netflix says the purpose of the trophy is to promote “Full Swing” and “Drive to Survive,” its successful docu-series about golf and racing. The company has recently been active in what it calls sports shoulder programming, commissioning reality series such as “Break Point” (following professional tennis players) and “Unchained” (tracking the Tour de France), as well as images of stars like David Beckham.

Showing off the fun itself hasn’t fazed the streaming giant. Rights are very expensive – American National Football League (nfl) earns more than $10bn a year from its media deals – plus low margins: the more value broadcasters get out of the games, the more the leagues demand when renew the rights. Last year Ted Sarandos, the co-chief executive of Netflix, said that the company “is not against sports, we are just for profit”.

That wording left the door open to another approach – and the Netflix Cup suggests one. By owning the competition, Netflix will keep any upside. “If they create value, they will enjoy the product, instead of creating value for another sports league that could turn around and ask them for a raise,” said Brandon Ross of LightShed Partners, a research firm. Netflix has reportedly investigated the purchase of smaller sports outfits such as the World Surf League on this basis.

The bigger question is whether the company could one day bid for rights to established leagues. Analysts increasingly believe it will, although they disagree on when. “More sports rights have to be the next frontier for Netflix,” said Michael Nathanson of MoffettNathanson, another research firm, who sees the golf cup as a test of sports’ ability to attract viewers to the platform, and Netflix’s ability to operate live content. It sees rights to the National Basketball Association, which are up for renewal in 2025, as a possible target. Mr. Ross believes that too early

Netflix minimizes all such conversations. But he has more reason than before to advocate for sports. Since subscriber growth stalled early last year, leading to a drop in its share price, Netflix executives have been brainstorming new ways to expand. Last year the company introduced advertising, which it had previously rejected. This year he has stopped users from sharing passwords, which he once encouraged. Sports could help attract new subscribers, especially in foreign markets where the streamer has had difficulty getting through. Cricket turbocharged the growth of Disney+ in India – although it was so expensive that Disney eventually dropped it.

Netflix’s new advertising business is also making sports more attractive. Sports appeals to advertisers, who say it engages audiences like nothing else, while staying brand-safe (some advertisers show their products next to, say, “Squid Game”). Live action means that ad breaks are unavoidable; fans are reluctant to slip out to blame him for fear of losing the action. And sports offer unparalleled scale, with nfl games regularly draw 20m viewers at a time in America on Sunday nights.

If Netflix were to go to the field it could be a game changer. Sports rights holders have cashed in after interest from deep-pocketed players such as Apple, Amazon and Google (which last year bought nfl rights for YouTube). But they are worried that old media bidders are tightening their belts. Disney (which owns espn, a major sports network) and Warner Bros. Discovery are both economically strong as their legacy cable networks decline. “The whole [sports] content world at the moment… hopefully Netflix will get involved in bidding for sports rights,” Mr Ross said. “And all the traditional media buyers are praying that Netflix doesn’t.”

Netflix, meanwhile, is just praying that its live streaming technology will hold up. His first live show, a comedy special with Chris Rock in March, went well. But in April a live episode of “Love is Blind”, a dating competition, was a technical fiasco. As the Netflix Cup approaches, the people behind the camera may be more worried than the players.

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