Q. Netflix has stayed out of the battle for live sport – so why was the WWE Raw deal so appealing to it?
We wrote a piece last year for SportsPro in which we discussed why Netflix was unlikely to bid for live sports rights any time soon - and one month into 2024, it's proven us wrong! However, the core sentiment of that piece – that Netflix’s global footprint and content strategy do not align with the localised nature of most sports rights – still stands, and this deal for WWE is very different from most. As of January 2025, Netflix will own the rights to WWE Raw in the US, Canada, UK and South America (with an option to add additional markets in the future as rights deals expire); and the rights to other WWE live shows, pay-per-view events, documentaries and original series in all international markets outside of the US.
The reason this deal feels different is three-fold. First, WWE isn’t a traditional sporting competition, but rather a mix of scripted sport and entertainment, with the scripted element slotting in perfectly alongside Netflix’s current content, and the sporting element being complementary to its array of recent sports documentaries. Second, this deal will come with a multitude of ancillary content - such as WWE documentaries, original series and the more traditional clips and highlights – meaning that a lot of the consumption will be non-live, fitting in alongside Netflix’s existing catalogue. And finally, unlike a typical sports rights deal, which is sold by market or region, many elements of the deal are global in nature – which fits perfectly with Netflix’s business model, as a service with a wide, distributed geographical subscriber base.
Q. How might Netflix monetise this deal?
First, it’s important to note that in the context of Netflix’s wider spend, this deal is significant, but not paradigm-changing. Ampere’s Content Markets data forecasts that as of 2024, Netflix’s total spend on content will be $15.7bn across its TV and movie business. With Netflix reported to pay $5bn over the course of ten years to WWE, the $500m a year this represents increases Netflix’s projected content spend by roughly 3%.
However, this doesn’t mean that monetisation won’t be high on the agenda, particularly as the company puts more emphasis on profitability. With the non-live, auxiliary content in this deal likely to slot into existing subscription tiers (as it both fits the current catalogue, and acts to widen the reach of WWE to the whole Netflix subscriber base), the key decisions facing Netflix will most likely come down to three options: embedding all content within its existing service; adding an additional tier for WWE content; or making certain content available via pay-per-view.
Ampere’s Consumer data shows that in the six initial WWE Raw launch markets we track, 28% of WWE fans do not currently have access to Netflix – which equates to up to 1.9m new households, or approximately $336m a year of additional revenue at current ARPUs. Netflix could, therefore, add WWE to its current subscription tiers – particularly when other factors, such as the potential churn reductions from recurring live content, and the value of the additional auxiliary content are considered – with a break-even scenario quite plausible.
The alternative would see Netflix target the 6.9m existing Netflix subscribers in these markets who are active fans of the WWE, and look to extract additional value through either an additional subscription tier or pay-per-view model. This offers greater potential financial rewards, but also poses risks, both from a business model perspective (breaking Netflix’s existing model of not differentiating tiers by content), and also from a piracy perspective. Ampere’s Sport Consumer data shows that those who pirate live sport are more likely than average to watch wrestling, and given both the current difficult economic climate and increasingly fragmented sport media landscape there could be a danger to pushing additional forms of monetisation on to existing subscribers.
Q. Does this mean Netflix will be entering the ring for more sports rights this year?
While this deal will likely see a lot more sports rights holders knocking on Netflix’s door, the underlying mechanics of its platform have not changed. Unless an opportunity ticks all the boxes around global sport, entertainment and ancillary content – which the WWE deal does – it might be a while before the platform signs another deal.
The deal with WWE has the potential to serve as a litmus test: If all goes well, and Netflix expands out to more territories, we might see the company start to stretch further towards live sport and entertainment. For example, following the WWE/UFC merger in September 2023, one potential next natural step would be acquisition of UFC rights – a competition which offers a similar mix of sport and entertainment with well-known personalities, but less of the scripted element. For now, other rights holder may have to be patient, but before long, Netflix may well be joining the streaming wars for sports rights.