As the battle for sports rights heats up with more streaming companies entering the race, one of the largest streaming companies might be sitting on the bench.
What Happened: Netflix Inc (NASDAQ: NFLX) might not be a major player in the live sports market, the company told investors and analysts after reporting second quarter financial results.
According to recent comments from co-CEO Ted Sarandos, Netflix may have thrown cold water on this item, explaining that it is comfortable sticking to sports docuseries rather than live sporting events for the moment.
"We're super excited about the success of our sports-adjacent programming," Sarandos said on the company's earnings call. "We really think that we can have a really strong offering for sports fans on Netflix without having to be part of the difficulty of the economic model of live sports licensing."
The Netflix executive said the streamer is able to introduce new audiences to sports through its storytelling element and with programming that is during off-seasons and complements existing sports leagues, including the Formula 1-themed series "Drive to Survive." Sarandos also credited the series "Tour de France: Unchained" for introducing viewers to cycling, a sport "that's been around for a really long time and not very well understood."
But Netflix isn't completely avoiding live sporting events. An upcoming live sports program on the platform will see golfers and Formula 1 racers compete in a golf event.
"We're excited about that because it serves as a promotional vehicle for our sports brands like 'Full Swing' and 'Drive to Survive,'" Sarandos adds.
Why It's Important: Sarandos' comments come as Netflix opts to reign in aggressive spending.
"We aren't anti-sports, we're pro-profit," he said in January when asked about bidding on live sports rights.
While many streaming companies are aggressively bidding on live sports rights, Netflix's strategy is to go after a different form of sports content. Rather than find itself in another bidding war - like the one it lost against ESPN, a unit of The Walt Disney Company (NYSE: DIS), for the rights to Liberty Formula One (OTC: FWONA) races - Netflix produces sports documentaries, like the Formula One series that helped boost interest in the motorsports league.
The streaming giant has also bid on smaller sports rights including ATP tennis, cycling, and surfing.
Netflix was previously linked to bidding on National Football League (NFL) rights and packages. The company recently premiered "Quarterback," a series that followed Kirk Cousins, Patrick Mahomes and Marcus Mariota in the 2022 NFL season.
In the days after it premiered on July 12, the show ranked sixth among the top 10 Netflix series with 21.4 million hours viewed (the data covers the week of July 10 to July 16). The second week and first full week of viewership could show how successful the series is for Netflix.
Sarandos' comments might also encourage other streaming companies to pursue sports and gain a live content edge over Netflix.