Netflix Co-CEO Says ‘We’re Not Anti-Sport, We’re Pro-Profit’

“We didn’t see a profit path today for renting big sports,” Sarandos said at the UBS Global TMT Conference.

Why doesn’t Netflix have major sports rights yet? That question has been asked of co-CEO Ted Sarandos for years, but now that Amazon has “Thursday Night Football” and Apple has the MLB and MLS rights, it’s popping up again. When asked Dec. 6 at the UBS Global TMT Conference, Sarandos said they still like the idea of ​​esports, but the streamer couldn’t find a way to turn a profit when it comes to “renting big sports.” .

Sarandos said the economics for live sport are built on pay TV, not streaming, and the idea of ​​acquiring live rights to a major sports league is still “dramatically more expensive” than they would like. And for now they’re fine without, thanks.

“We’re not anti-sport, we’re pro-profit,” Sarandos said. “We still have to figure out how to do that. I’m very confident that without sport we can double in size and beyond that we might have to find out and to that point maybe the economics will change or we’ll have the scale to find that out.

Sarandos touted the fact that Netflix managed to garner massive success with “Squid Game,” drawing hundreds of millions of people to see the show, and they did all of this without premiering it after the Super Bowl. If they can do something like that in sports, then maybe that’s a different conversation. That’s where the nuance of “renting out” sports comes in, and if they somehow could own the rights to a league, the profitability would probably be different.

Formula 1 was given as an example. Netflix’s documentary series on the F1 league, Formula 1: Drive to Survive, was so popular that the price for it skyrocketed when ESPN renewed its deal with the league to broadcast the races for between $75 million and $90 million over the next three years, up from the $5 million ESPN paid three years earlier. And Sarandos wasn’t blind to the impact Netflix has had in this space.

“If you think we’ve had a big impact on music, look at Netflix’s impact on Formula 1. So that should translate, but in this case if you create the value it just translates into higher licensing prices down the road,” he said.

Sarandos was asked if commercials or the streamer’s planned live concert special, featuring a performance by Chris Rock, will get the pump pumping for Netflix to exercise. He said when it comes to live capabilities, Netflix has had the technology ready for several years, but they have yet to find the means or opportunity to test it. But he said that instead of using live to get into sports or other arenas, it’s more likely to be used for live concert specials like Rock’s or for live results shows for their competition and reality series.

“Technically, live television is nothing new. We should be able to do that,” said Sarandos. “So that’s mostly creatively driven, rather than trying to open up other ways of programming. It makes the programming we do today a little bit more fun when it’s live.”

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Lindsay Lowe

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