“WWE Raw is sports entertainment, which is right in the sweet spot of our sports business, which is the drama of sports,” Netflix co-CEO Ted Sarandos said on the earnings call following the company’s fourth quarter results on Tuesday.
Just ahead of the earnings, Netflix and TKO Group Holdings (TKO), the parent company of WWE, announced the partnership. The agreement will bring WWE’s flagship program Raw, a live wrestling production, to the streaming service, beginning January 2025.
The 10-year deal, reportedly worth $5 billion, marks Netflix’s first big venture into the world of live sports entertainment. However, the inclusion of the program, according to Sarandos, doesn’t change the company’s overall sports strategy.
“This is sports entertainment, very close to our core,” Sarandos said, calling the WWE deal “unique” compared to the global sports rights of professional leagues like the NBA or UFC.
“In terms of the deal itself, it has options and the protections that we seek in our general licensing deals,” he continued. “I would not look at this as a signal of any other change or any change to our sports strategy.”
Netflix has taken its own unique approach to sports by producing docuseries and sports-adjacent content like “Formula 1: Drive to Survive,” “Full Swing,” and “Break Point” instead of committing to big-ticket deals.
The company has also dipped its toes into live sporting events, debuting the first-ever “Netflix Cup,” a celebrity golf tournament that featured athletes from “Formula 1: Drive to Survive” and “Full Swing,” on Nov. 14. The event was streamed live from Wynn Gold Club in Las Vegas.
But Wall Street analysts and industry watchers have predicted that Netflix will eventually be forced to go all-in on sports, describing live sports as the last frontier of streaming amid a deteriorating cable bundle.
“Eventually we expect Netflix to move into live sports, particularly as it scales in [free cash flow] generation and has the ability to invest in major sports rights around the world,” Morgan Stanley said in a report published last June. “In addition, as its advertising capabilities scale, we think live sports will fit well into its content offering.”