TheChek News Flow

The assumption has been that the streamers will need sports as much as the leagues need the streamers. The reality is more complicated.

A couple weeks ago, a steady stream of media and sports heavyweights could be found at the white-marbled Breakers hotel in Palm Beach, Fla., where the NFL was hosting its annual owners’ meetings. The conclave is a big deal for the league—an occasion for it to hash out its multibillion dollar business deals and discuss what the future may hold.

The latest gathering, which lasted over four days, had a notable first-time guest: Ted Sarandos, co-CEO of Netflix. He came for a panel discussion about sports on streaming-video services like Netflix, and there the league revealed that Netflix would air two Christmas Day games in 2025 just as it did in 2024.

Everyone knew Netflix would do at least one Christmas game as part of a three-year deal that began with a pair of Christmas matches last year, the first NFL games ever broadcast on Netflix. But the deal only requires Netflix to air one game per year. The media world saw the decision to have two games again as Netflix’s acknowledgment that it’s interested in nurturing its nascent relationship with the league, after decades of resisting live sports.

For the league’s part, it couldn’t be happier. “We’re now in a world where there are some platforms that by doing one deal, you tap into global scale,” the NFL’s chief media and business officer, Brian Rolapp, told me last week. “Netflix is one of them. Amazon is certainly becoming that, and YouTube is certainly becoming that.”

Right now the league is trying to find a marquee home for an opening-week game on Sept. 5 in Brazil, and while it might go with a TV network, a streamer like Netflix is probably more likely, since those companies have a greater interest in international audiences and more money to spend.

“That is a change in the sports world that’s upon us,” Rolapp added. “And for us, it comes at a good time as we think about global distribution.”

That world looks nothing like it used to. The league once relied on traditional TV to air games, but those businesses are cratering. The cable subscription and advertising revenues that helped companies such as Disney, Warner Bros. Discovery and Paramount Global afford expensive sports rights have plummeted as viewers spend more time on streaming services.

The NFL and other sports leagues have assumed they could steer more and more of their business over to the streamers, figuring those platforms would want to add sports to bring in subscribers and advertisers. The NFL has had some wins there. In the last few years, the NFL has put Thursday games on Amazon Prime, switched its Sunday Ticket package to YouTube from its longtime home on DirecTV—and struck the deal with Netflix, long seen as a reluctant partner for live sports. These came after a substantial amount of wooing across Silicon Valley.

But it’s not clear the streamers will always have as much appetite for sports as the leagues and media executives have long assumed they would—if Netflix’s cautious approach to the NFL is any measure. It could put the NFL and other leagues in an uncomfortable position: They might get forced to take less they’d want from the streamers because the traditional cable companies can’t afford much of anything.

As my conversations with more than a dozen current and former NFL, Netflix, sports media and streaming executives revealed to me, the league’s interest in Netflix goes back much further than most people may realize. League executives tracked Netflix’s ascension into a global streaming powerhouse through the 2010s and envisioned a day it would begin bidding for live games, according to current and former league executives. As one of the executives joked to me, Netflix was on the league’s radar as soon as it went public in 2002. Its emergence over the next two decades or so as the most profitable, deep-pocketed streamer has only enhanced its desirability as a partner for the league.

For now, though, the NFL and Netflix are like casual friends, at least compared to other tech giants such as Amazon and YouTube that have gotten hitched to the league through multibillion-dollar licensing deals. Amazon and YouTube are interested in the Brazil games, for instance, while it’s not clear yet if Netflix is, according to people familiar with the matter. But at least in the eyes of many in the NFL, an eventual marriage between America’s No. 1 sports league and its No. 1 subscription streamer is all but inevitable.

The reordering among media and sports leagues goes far beyond the NFL. Every major league and every streaming service faces the same question: Sports may be essential to traditional TV, but will it ever be essential to streaming?

The NFL has played the long game when it has come to winning over the tech giants.

When I spoke with Rolapp, he recalled several decades of annual trips to Silicon Valley with league commissioner Roger Goodell. At the beginning, they were eager “not only to establish relationships but just get smart on where the world was going,” Rolapp recalled. We’ve been deliberate about spending time in their world for as long as I’ve been here.”

In 2007, Rolapp and Goodell had a meeting with Steve Jobs and Apple executives, around the time the first iPhone launched. Jobs told Rolapp and the NFL executives they would need to enable all of its stadiums with Wi-Fi—something that wasn’t then obvious to the league. “Of course, in my own cynical brain, I thought he was just trying to sell iPhones, but he was 100% right,” said Rolapp, acknowledging that he may have slightly underestimated how ubiquitous smartphones would become. (The meeting with Jobs also included Jonathan Kraft, a New England Patriots executive and son of team owner Robert Kraft.)

Two years later, the NFL struck its very first agreement with YouTube—then just a few years old and freshly acquired by Google—to supply the site with game clips and highlights. The footage wasn’t exclusive to YouTube, but it needed a rights deal to have any official content at all, and YouTube knew it required the more professionally produced content that advertisers coveted.

Rolapp felt like it was a first good step into Silicon Valley. Both YouTube and the NFL needed some time to figure each other out. “They weren’t ready for live games, and we weren’t ready to license live games digitally,” he said.

Around the same time, Rolapp met Sarandos and another top Netflix executive, Robert Kyncl (who later went to YouTube and is now Warner Music’s CEO). Meanwhile, Goodell worked to get closer to Netflix co-founder Reed Hastings, then its CEO, including over numerous conversations at places like the annual Allen & Co. Sun Valley Conference in Idaho for the tech, media and finance elite. (Netflix declined to make executives available for this story.)

Until recently, though, Netflix exhibited no interest in live sports. That’s largely because it didn’t need any extra content to attract subscribers. But as the league made inroads with YouTube and Amazon, Netflix’s reluctance became even more glaringly apparent—and puzzling, even to some of its own executives.

During an early 2022 meeting among senior Netflix executives to discuss new business and revenue opportunities for the future—Netflix conducts these meetings pretty regularly—the topic of why the company had not embraced live sports came up during a breakout session, said an executive who attended the meeting. Perhaps, said another attendee, the answer was fairly straightforward: Partly it was just because neither Sarandos nor Hastings was widely known to be a hardcore fan of any sports teams (though, as another Netflix executive acknowledged, Hastings is an avid snowboarder and skier, while Sarandos recently went to WWE’s WrestleMania and Raw events in Las Vegas). Others familiar with Netflix executives’ thinking insist the company wanted to make sure its investments in live sports were economically and technologically feasible for the company.

July 2023 proved to be an important milestone in the relationship between Netflix and the NFL. “Quarterback”—a documentary series following three NFL quarterbacks including superstar Patrick Mahomes—premiered on Netflix that month and caught on with its audience. A second season filmed in 2024 and will come out later this year (and another series on the Dallas Cowboys, “America’s Team: The Gambler and His Cowboys,” is highly anticipated).

“The NFL has been interested in Netflix’s approach to storytelling: They like the portrayal of the league in a very cinematic way,” said Ian Schafer, a longtime entertainment and advertising executive who has worked with sports leagues and streaming services.

What about live sports, though? Rolapp said he knew Netflix could become a serious bidder when the company announced in April 2022, after its subscriber growth stalled, that it was getting into the ads business. The shift meant that business incentives would propel Netflix to finally embrace live sports, which it could use to attract both subscribers and advertisers.

For years, the league had been thinking about playing more games on Christmas Day. It also saw an opportunity to separate out a new package of games for streaming companies and TV networks to bid on.

At last year’s owners’ meeting at the Ritz-Carlton in Orlando, Fla., the NFL announced it would move forward with that plan. Netflix reached out, according to people familiar with the matter. And the league and the streamer struck a deal for the Christmas Day games in May.

Not everyone was ecstatic. Amazon sports executives were upset about not getting a chance to bid on those games, according to an executive affiliated with an NFL team. They felt that the NFL had singled out Netflix as the company it wanted to do a deal with for that package, these Amazon executives told the team executive.

Similarly, NBCUniversal sports executives were miffed and felt Netflix had been allowed to “cherry-pick” a package of holiday games, said one NBC Sports executive. That seemed like a slight to the league’s longtime cable partners, who felt like they deserved to at least get asked to bid.

On Netflix’s Christmas broadcasts last year, the Kansas City Chiefs beat the Pittsburgh Steelers 29–10, while the Baltimore Ravens trounced the Houston Texans 31–2—a sports contest largely overshadowed by Beyoncé’s half-time performance. The games formed the biggest streaming audience ever for the NFL, attracting more than 30 million viewers each, on average, globally.

For both the NFL and Netflix, the games were a smash hit.

Those kinds of results added to the bounty of evidence the NFL now has that fans will show up for exclusive streaming games. Amazon, which completed its third season of “Thursday Night Football,” grew its average viewership by 38% from its first season. Meanwhile, the playoff game on NBCUniversal’s Peacock streaming service ranks as Peacock’s largest single day ever as of that point, in terms of the total number of time users spent on the service.

Nonetheless, Sarandos has been insistent that Netflix won’t throw endless money at sports. Sarandos’ stance could mean the NFL will have a hard time ever talking Netflix into a deal for a full season of games.

“We’re going to be mindful of the bottom line,” Sarandos said during an earnings call just a month after the Christmas games. “And it’s really important that those economics do work and that the big league sports’ full-season economics are very hard to make work.”

But Netflix has also shown a willingness to make an about-face when the business situation calls for it—as it did by introducing ads, which Hastings had been loath to add to Netflix. And while sports, media and entertainment executives generally believe Netflix executives when they say the company wants to focus on a handful of bigger live sports events, they also think one day Netflix will need sports more than it currently does: Things could change, once again, if it experiences another slowdown in revenue growth.

“If the advertising business stalls, you’ll see them get more into sports,” said one former Netflix content executive. “Netflix has religion until they don’t.”

The strength of the NFL’s position will be fully tested relatively soon. When the league announced its current full-season deals in 2021, they included opt-out clauses that would allow it to end the partnerships in 2029. The NFL added the clauses deliberately to give itself the opportunity to reconsider the media world and assess whether it might make sense to move more of its programming from traditional TV to streaming.

“It was us recognizing that the world was changing from a consumer standpoint, and the companies who were serving those consumers were changing,” said Rolapp. “To have some flexibility, when you don’t know what the future looks like, is certainly nice to have.”

Pretty much every league or sports media and industry executive I spoke to thinks the league will definitely exercise that clause, though the NFL hasn’t made any official decisions on the matter.

The league is almost certainly encouraged by the luck the NBA experienced last year when it tripled the total value of its media contracts in fresh negotiations. Theoretically, the NFL could see even greater gains, since it commands a far larger audience. But a nagging question troubles all the leagues: Will the number always go up—or is there a ceiling for sports rights costs?

“While it feels like there must be a cap to just how high the cost of major sports rights can go, we have clearly not reached it yet,” said Marc DeBevoise, a longtime media executive and investor and former chief digital officer of CBS’s parent company, which now goes by Paramount Global.

And as much as the streamers may seem like a great idea for the NFL, the new relationships have brought at least a little tension. For instance, the streamers don’t have a history in producing live sports broadcasts. Netflix had to hire CBS to produce its Christmas Day games last year and also faced criticisms for a glitchy boxing event it hosted a month prior to those games. The same is true of Amazon: While the tech giant now has its own production team, filled with former sports media and production executives, for “Thursday Night Football,” that wasn’t originally the case.

Some current and former league executives told me they still have qualms about working with tech companies and are keeping an eye on which companies are willing to make the investment to produce the games in the way the NFL is accustomed to. These tech giants are also generally led by executives with product and engineering backgrounds, they said. That inherently creates a different type of relationship dynamic than with TV networks staffed by media and business people who have been in and around sports for often decades.

Yet the NFL’s ever-increasing asking prices from its media partners means the league is likely to put up with a lot of headaches from tech rookies.

“You have to fish where the fish are,” said David Levy, founder and co-CEO of Horizon Sports and Experiences and former longtime president of Turner Broadcasting, arguing that sports leagues will need to go where viewers are increasingly spending their time watching entertainment.

And that landscape is heading more and more in the direction of the tech giants. Levy said he’s had discussions with various sports league executives about this evolution. “If you close your eyes and think what media companies will be around in the next 10 years, Google, Amazon and Netflix would be at the top of the list,” Levy said.