Jan 24, 2024 - Business

Netflix shakes up sports media

Netflix sign atop a building

Photo by CHRIS DELMAS/AFP via Getty Images

Netflix threw a haymaker on Tuesday morning, inking a $5 billion live-streaming agreement with World Wrestling Entertainment, and then scored an afternoon knockout with its quarterly earnings report.

Why it matters: This changes the landscape for live sports media rights deals, at a time when the NBA's televised future is up for grabs.

  • Sure, WWE isn't real sports. And Netflix CEO Ted Sarandos took pains to call it "sports entertainment" and "sports storytelling" during the earnings call.
  • But the consumer economics of WWE are pretty similar to those of its nonfiction cousins.
  • Moreover, Netflix reminded everyone that it's the undisputed streaming champ. Even if a broadcaster or secondary streamer doesn't expect Netflix to enter a live sports deal auction, it needs to be at least a bit more circumspect.

Elsewhere: Netflix's deal with WWE also could have trickle-down effects for private equity firm Silver Lake.

  • Silver Lake is controlling shareholder of Endeavor Group, which holds a 51% stake in WWE owner TKO Group (whose CEO, Ari Emanuel, also runs Endeavor).
  • Reports are that Silver Lake wants to buy out Endeavor's minority investors and then begin selling off certain assets.
  • Suddenly that TKO stake is much more valuable — spiked 23% on news of both the Netflix deal and the addition of Dwayne "The Rock" Johnson to TKO's board of directors — which either could create direct ROI for Silver Lake or more flexibility around other Endeavor asset sales.

Zoom out: This also comes just days after Amazon agreed to make a minority investment in Diamond Sports Group, the country's largest regional sports network, as part of a bankruptcy reorganization plan.

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