Smackdown – Netflix is now a sports streamer…and this is just the beginning

Today Netflix announced that it has just secured the 10-year exclusive rights to show WWE’s flagship weekly programme Raw in the U.S., Canada, U.K., and Latin America, with additional countries and regions to follow. Netflix will also become the home for all WWE shows and specials outside the U.S. as available. This includes Raw, WWE’s other weekly shows SmackDown and NXT,  and the company’s premium live events; WrestleMania, SummerSlam, and Royal Rumble. WWE’s award-winning documentaries, original series, and forthcoming projects will also be available on Netflix internationally beginning in 2025. For WWE this brings to an end 31 years of linear distribution. Mark Shapiro, President and COO of parent company TKO Group Holdings, Inc (TKO) stated:

“This deal is transformative…”

And indeed it is.

Netflix needs sports as it continues its route towards full streaming TV 

As MiDiA stated in its 2024 predictions for video, sport is becoming a must have for Netflix. Our 2024 sports prediction for Netflix was as follows:Netflix will acquire its first set of sports rights for pay-per-view broadcast: 2024 will be the year that Netflix acquires sports rights for exclusive pay-per-view (PPV) broadcasting to its membership. With much to learn from distributing live sports coverage and being acutely aware of its global subscriber base, Netflix will acquire rights in a strong niche sport with long-tail global appeal among upwardly mobile digital natives. The most likely candidate will be live boxing matches, featuring creators like Jake Paul – PPV live coverage will be co-promoted through factual content and reality series on the standard subscription.

While the sport was different, the rational  for acquiring a global sport rights for digital audiences (On social media, WWE has more than one billion followers across its platforms) has been borne out. This deal is quoted as costing Netflix $5 billion, yet compares favourably to the $1 billion per year rival Amazon Prime Video is spending on its NFL Thursday Night Football exclusive US-only distribution rights. Sports purists may debate as to just how far the entertainment-focused WWE qualifies as a competitive sport. However, it is indisputable that WWE brings a loyal and global fanbase, with 17.5 million annual unique viewers on its current home on the USA Network. Equally important is that this marks the first step towards investing in third-party sports IP for live global(ish) streaming. Equally, TKO also own UFC, a competitive mixed martial arts franchise with an established business model built around (PPV). PPV matters as it is the way to drive ad-hoc revenues for streaming services outside of an existing subscription. This is ultimately where Netflix needs to convince investors that it can move into as it seek to diversify revenues streams beyond subscriptions and advertising and into the emerging era of fan-based third way TV monetisation.  (WWE closed its WWE Network in April 2021 and migrated its US streaming subscription streaming audience to Peacock. Its streaming PPV distribution continues on DAZN preventing Netflix from monetising WWE this way. )

Netflix has confounded its critics once again and proved its ability to make bold decisions that fundamentally change how the business is perceived by investors and by the consumers paying for the service. With sports being the most valuable and widely engaged entertainment proposition, its role in streaming TV is always assured. Now Netflix needs to continue the pace of disruption to stay