Netflix needs streaming partner for NFL Christmas games

Netflix trying to get ready for some football.

The streaming giant reached out to broadcasters this week in hopes of finding a partner to produce the NFL games it will broadcast on Christmas Day this year, according to people familiar with the matter. Netflix will show two games on Christmas Day this year, followed by at least one game in 2025 and 2026, the company announced last month.

This is Netflix’s first real foray into traditional live sports, driven by the company’s ambitions to increase its advertising footprint. The company signed a deal earlier this year with WWE to be the home of its “Raw” live events, but Netflix called that deal “sports entertainment.” Unlike WWE, Netflix’s deal for NFL Christmas games doesn’t come with a full production team. This left the broadcaster to ask for help.

Netflix has been in contact with broadcasters currently airing NFL games, including Disney’s ESPN, Comcast’s NBCUniversal and Paramount Global’s CBS Sports, said the people, who asked not to be named because the discussions have been private. Disney will not produce the games because it already has same-day college football obligations, two of the people said.

In-depth discussions haven’t started with other broadcasters, but Netflix’s options may be somewhat limited.

Fox and CBS Sports already produce different games in different regions each week, which could make getting extra games for Netflix a burden, some of the people said.

There is also competition to consider.

Amazon signed a deal with NBCUniversal to produce its NFL games before the first season of “Thursday Night Football” in 2022, but there may be more resistance among current NFL partners to help Netflix, according to people familiar with the matter. That’s because Netflix may be auditioning as a long-term media rights partner for NFL games instead of a legacy media company like Paramount. Fox or NBC.

The NFL has an opt-out clause in its current media contracts that allows it to select new media partners after the 2029-30 season.

Representatives for Netflix, the NFL, NBCUniversal, CBS, ESPN and Fox declined to comment.

Netflix announced its entry into the NFL in mid-May ahead of its Upfront presentation, when it tried to lure advertisers to its growing ad-supported platform. Netflix said last month that it has reached 40 million global active users for its advertising tier, which costs $6.99 a month in the US and debuts in November 2022.

In May, co-CEO Ted Sarandos told CNBC that the NFL was a good fit for Netflix because it aligned with the broadcaster’s events strategy — effectively allowing Netflix to own the day. Netflix will pay the NFL roughly $75 million per game, CNBC previously reported.

For the NFL, Netflix represents the opportunity to reach a global, younger audience. There’s also the potential to lay the groundwork for Netflix to become a future bidder in a larger gaming package.

The NFL signed long-term deals through 2021 with Disney, Paramount, NBCUniversal, Fox and Amazon for its top five game packages.

While there is some trepidation among current media partners to produce games for a potential rival, pressure from the league — and a big payday from Netflix — could convince the broadcasters to strike a deal, according to people familiar with the matter.

“There aren’t that many players in the space who are capable of doing that at a level that you would want to trust when you’re starting as a new partner with a league as important as the NBA or the NFL,” Shirin said. . Malkani, co-chair of the sports industry group at law firm Perkins Coie, adding that the production side “can be a big hole for broadcast partners.”

Netflix and the league are looking to mirror the partnership Amazon’s Prime Video lined up with Comcast’s NBC Sports for Thursday Night Football games.

While NBC Sports’ Fred Gaudelli produced the 2022 season of “Thursday Night Football,” Amazon named Mark Teitelman, one of its own employees, to the role of lead game producer in 2023.

Amazon produces all of its pregame, halftime and postgame coverage, but NBC Sports handles the extensive production work that goes into an NFL game and employs the vast majority of those workers.

Netflix is ​​interested in finding a similar partner, according to people familiar with its plans.

If a deal can’t be made with one of the incumbents, Netflix can find other options with third-party producers. IMG of Endeavor Group Holdings is the production partner for Major League Soccer, which is available through Apple.

“It’s not easy to do an NFL game at a level that people are used to watching, which is a very high level and well-produced,” said Jonathan Miller, chief executive of Integrated Media, which specializes in investments in digital media. “But there are a number of options out there that can put it together without [Netflix] having a fully staffed sports division”.

Amazon Prime Video was the first broadcaster to acquire exclusive rights to NFL games as the league sought to expand its media partners and have more streaming offerings to expand its audience.

Amazon struck its deal to carry Thursday Night Football into 2021 in conjunction with the rest of the media rights deals for the NFL — an 11-year media rights deal worth more than $100 billion, with an opt-out clause at the seven-year mark.

Given the NBA’s recent media rights negotiations, which are drawing high sums from various media companies, many in and around the industry expect the NFL to exercise the clause and look for new partners.

Since the NFL signed its deal, streaming services for Comcast, ESPN and Paramount have begun simulcasting games, and in some cases, hosting games exclusively. Of the alphabet YouTube TV is also the new home of the Sunday Ticket game pack.

Sports, especially the NFL, have been the glue that holds the traditional TV package together — and have also proven to be a boost to streaming. NBCUniversal said in April that its exclusive NFL wild card game on Peacock helped to add and then retain more customers than expected.

The league has been vocal in its push to add more broadcast partners in an effort to expand its audience.

That was the thinking behind the deal with Netflix to stream these Christmas Day games.

When negotiations for “Sunday Ticket” rights were underway, NFL commissioner Roger Goodell told CNBC that the long-running package offered only by DirecTV would carry over to the broadcast.

“I think this is best for consumers at this stage,” Goodell said at the time.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.