Netflix buys NFL Christmas Day games. The streamer may raise prices as a result, expert says.

By Weston Blasi

Netflix will broadcast live NFL games on Christmas Day in 2024, 2025 and 2026

For the first time ever, Netflix (NFLX) will broadcast a live major sporting event when it hosts two Christmas Day NFL games this December. The three-season deal will bring live NFL games to Netflix in 2024, 2025 and 2026, the company announced.

After years of publicly saying it didn't have serious interest in showing live sports, Netflix has now secured rights for these marquee NFL games, along with WWE's "Monday Night Raw" and an upcoming boxing match between Mike Tyson and Jake Paul.

"Last year, we decided to take a big bet on live - tapping into massive fandoms across comedy, reality TV, sports, and more," Netflix Chief Content Officer Bela Bajaria said in a statement. "There are no live annual events, sports or otherwise, that compare with the audiences NFL football attracts. We're so excited that the NFL's Christmas Day games will be only on Netflix."

While the terms of the deal are not yet known, it's likely Netflix paid hundreds of millions of dollars for the rights. In a similar deal, Comcast-owned (CMCSA) streamer Peacock paid $110 million to air an NFL playoff game in 2023, which led to a boost of almost 3 million subscribers.

As Netflix shells out millions for this slate of Christmas NFL games, could the new exclusive content mean the streamer may increase the price of its services?

See also: Why it's easy for bettors to beat the sportsbooks during the NFL draft

"I think we have to expect prices to be under continued pressure to rise. Streaming is a very expensive business, and it's also a bit of a vicious circle," Jacqueline Corbelli, CEO of BrightLine, a technology-software company that specializes in television advertising, told MarketWatch.

"Being able to offer great content for your viewers means making higher and higher investments in producing it," she added. "Right now and for the foreseeable future, there are only two ways to pay for it. One is through increased advertising, and the other is by raising prices. I expect we will see both."

In 2023, Netflix CEO Ted Sarandos said his company wasn't interested in getting into live sports and would instead focus on "sports adjacent" programming, such as docuseries "Drive to Survive," "Full Swing" and "Quarterback."

"We really think that we can have a really strong offering for sports fans on Netflix without having to be part of the difficulty of the economic model of live sports licensing," Sarandos said during the company's second-quarter earnings call last year.

He even famously said in 2022: "We're not anti-sports, we're just pro-profit," and added that Netflix "can get twice as big without sports."

So what changed?

"Remember that Netflix decided to insert ads into its streaming content after saying it would never do so, too, and the reason for pursuing sports at this stage is actually related," Corbelli said. "Ultimately, like every other big player in streaming, like NBCU/Peacock, Disney, Amazon Prime (AMZN) and the others, Netflix must continue to aggressively grow the number of subscribers on its platform."

In particular, it could provide a boost to Netflix's advertising business, as ads during marquee NFL games are often some of the most sought-after ad spots on TV.

"The bigger the audience they can attract, the more Netflix can persuade advertisers to buy ads within that content, and both these things require that they provide the very best content possible to their streaming customers. And live sports is the absolute grail right now," Corbelli said.

Representatives for Netflix declined to comment on this story.

On Wednesday night, the NFL will announce which teams will be playing on Christmas Day 2024.

See also: Will a Super Bowl only be available on a streaming service? 'That's where this is all headed.'

In addition to sports content, Netflix has prioritized live programming lately, hosting live events including "The Roast of Tom Brady" and "John Mulaney Presents: Everybody's in L.A."

NFL fans who want to watch these games will need to get a Netflix subscription, because the games will not be simulcast on any other national networks, except in the competing teams' cities.

And don't bank on getting a free trial, as many streamers, including Netflix, Peacock, Disney+ (DIS) and Max (WBD), have ended their free-trial offerings in recent years.

The price of a standard Netflix subscription is $6.99 a month with ads, while a standard plan with no ads is $15.49 a month and a premium plan with better audio quality and simultaneous streamers costs $22.99 a month.

Shares of Netflix Inc. are up 0.34% during Wednesday afternoon trading, and are up 79.85% over the last 12 months.

-Weston Blasi

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

05-15-24 1406ET

Copyright (c) 2024 Dow Jones & Company, Inc.