Good evening,

It's that time of the year or “squeaky bum time” to quote the legendary Manchester United manager Sir Alex Ferguson, in at least two of India’s most-followed leagues.

In England, Manchester City could make it an unprecedented four Premier League titles in a row (and five times in seven seasons) with a win over West Ham United on Sunday. Arsenal, currently trailing City by two points (with a marginally better goal difference) host Everton. Closer home, in the Indian Premier League (IPL), the fourth qualification spot is up for grabs, and what seemed like a routine end to the season a few weeks ago has transformed into a high-stakes shootout. All eyes will be on the 68th match of the season between the in-form hosts Royal Challengers Bengaluru (RCB) and Chennai Super Kings (CSK). While CSK holds the edge and has the situational know-how, you never know (as you always do with RCB). 

But in today’s edition, I’ll step away from these leagues and tantalising finishes to take a closer look at the biggest sports business story of the week, dropping from the United States. Let’s dive right in.

Yesterday, Netflix announced that it had signed a three-year deal with the National Football League (NFL) to become the “global home of NFL’s two Christmas Day marquee games”. The deal, per the Wall Street Journal, will see Netflix paying $75 million each for the two matches it will stream this year, and the streamer will broadcast at least one game in 2025 and 2026. While small in quantum (two games), it still is a big, big deal for both Netflix and the NFL.

Why is that? Netflix, at least in the last year or so, has been talking up “sports adjacent” as a content category, something it used to justify its sports documentaries, and live events that can be described as “exhibition” in nature—The Netflix Cup golf tournament or even the one-off Netflix Slam tennis match between Rafael Nadal and Carlos Alcaraz. There’s a July heavyweight boxing match between YouTuber Jake Paul and Mike Tyson that Netflix will broadcast. The long-term deal with World Wrestling Entertainment-owner TKO Holdings starting next year also is “live sports entertainment”, a marriage of the two categories. 

This is where the NFL deal comes in, and thus, a leap in the strategy—decisively buying into live sports and not merely flirting with it. It is a statement of intent in itself that the world’s largest streaming service, with over 270 million subscribers, has the willingness to make a play for some of these rights, albeit in small packages for now. 

That Netflix has chosen this moment to enter live sports is equally interesting. Consumer behaviour has been shifting in the United States. Television usage (broadcast and linear pay TV) dipped below 50% in July last year, per Nielsen data. Courtesy of its popularity among young cord-cutter audiences, streaming has been on the rise, inching closer to the 39-40% share in overall viewership. That shift was punctuated by NBCUniversal’s Peacock, which, according to subscription market research firm Antenna, garnered a massive 2.8 million subscribers for an NFL Wild Card Game in January this year. 

Couple that with a reckoning for the “regional sports network” (RSN) business model crumbling since last year—two of the biggest players in the business–Sinclair Broadcast Group and Warner Bros. Discovery—shutting down their respective RSNs or putting them on the block. From a sports broadcast sense, the NFL accounted for a dominant share of the most viewed broadcasts (93 of 100) in 2023.

Little wonder then, that Netflix chose the league as an entry point.

The Tudum Bowl

The Netflix approach to sports has been fairly strategic and to some extent in lockstep with viewer preferences. Its tryst with sports began in 2016 with a documentary about college sports that has since mushroomed into a full-fledged category. The cultural impact of its Formula One-centric series Drive to Survive has been well documented (and hotly debated), with the show playing a pivotal role in growing F1 fandom in the United States and globally for a while, especially among a younger population (Gen Z). Its other shows across football, golf, and tennis have made waves and are what many would call palate cleansers for the general subscriber but well-produced storytelling for the hardcore sports fan. 

The NFL deal is what Netflix executives will downplay as a continuing “experiment” that helps build on the platform’s already growing repertoire of live events without spending too much on what they feel are overpriced sports rights to marquee events. At the same time, it gets to continue its “sports adjacent” content with NFL-related documentaries such as Quarterback (2023) and Receiver, for which it is partnering with NFL Films, the league’s official film production company.

Small packages have another upside, especially on Christmas. Over 29 million viewers on average tuned in to watch an NFL match last year, albeit on television. Netflix could potentially win a share of that audience, which in turn could rev up its bottomline, either via paying subscribers—for either of its ad-free or ad-supported tiers—or advertising, especially with an average NFL match consisting of at least “20 commercial breaks containing more than 100 ads”. That is a substantial pull, while also offering a business case for these deals.

The coming windfall

For the NFL, the deal represents a significant breakthrough, which is consistent with its unbundling strategy of distributing inventory more evenly across broadcasters and platforms. On Black Friday last year, it added a game to its inventory, for which Amazon Prime Video reportedly paid $100 million, and streamed it free.

Other major leagues could be tempted to follow the model of unbundling rights and selling them to separate broadcasters. Some of that may already be happening with the NBA, for instance, where Amazon and Apple are in contention for specific packages as a third partner for the league.

In 2021, the NFL announced long-term deals worth over $100 billion with Fox, Disney, NBC, and Amazon Prime Video that would run between 2023 and 2033. That may now be in doubt. A recent NBCSports report suggested that the NFL might be looking to scrap all its deals by 2029 and renew them ahead of the 2030 season. And now with Netflix firmly in its corner, it will be “looking to lure more partners on its table”. Should that happen, the NFL could be looking at a windfall as it will have considerable leverage in terms of viewership, and therefore, advertisers.

That said, watching the NFL is an expensive affair. The Guardian reports that the hardcore NFL fan might need to shell out at least $1600 a year to watch a whole season, with at least seven different services broadcasting these matches, of which “four streaming services will have exclusive games in 2024”. That could now increase (or be rationalised) with the announcement of Venu Sports, the sports streaming service by ESPN, Fox, and Warner Bros. Discovery. 

Interesting times ahead, indeed.  

⚡️Quick Singles

⚽📺🟥: Premier League clubs will vote on the use of the contentious video assistant referee (VAR) during their annual general meeting in June. The system, first deployed in 2019, has been in the news for the wrong reasons this season, prompting one of the clubs, Wolverhampton Wanderers, to submit a resolution to vote. Last month, Sweden scrapped using VAR following a “fan revolt”, with over 18 of its 32 clubs and 2 districts rejecting the system.

⚽✋🔚: India’s football captain Sunil Chhetri announced his retirement from the sport. The 39-year-old will play his last international game for India in a World Cup qualifier against Kuwait at Kolkata’s Salt Lake Stadium next month. Chhetri has represented India in over 150 matches, scoring 94 goals, making him the world’s third-highest active international goalscorer behind Cristiano Ronaldo and Lionel Messi. Chhetri debuted in 2005 as a 21-year-old against Pakistan at Quetta, where he scored in a 1-1 draw.

🍿🎥🏏: India’s largest movie operator PVR-INOX will screen key matches of the upcoming ICC Men’s T20 World Cup in a bid to increase footfalls, amid a downturn for movies. This, the company’s CFO told Bloomberg, was part of a bid to “stay relevant” with the company betting on the T20 format being more popular than longer, one-day international matches. The company hosted similar screenings for big matches in the 2023 Cricket World Cup, including the final between India and Australia.

🇧🇷⚽️🏆: Brazil will host the 2027 Women’s Football World Cup, after winning a historic bid in Thailand. Brazil defeated a joint bid by Belgium, the Netherlands, and Germany to take the tournament to South America for the first time. The last edition of the tournament was held in Australia and New Zealand, and was a significant money-spinner for football’s governing body Fifa, earning over $570 million in commercial revenue. For the tournament, Brazil will be using the infrastructure it built or upgraded for the 2014 Men’s World Cup.

🤝👕🏃‍♂️: German sportswear giant Puma will become the Athletics Federation of India’s (AFI) official kit sponsor after signing a multi-year contract with the sports body. The deal will see Puma equipping over 400 Indian athletes with apparel, footwear, and accessories “during domestic and international tournaments”. Puma has been a regular sponsor of athletics federations in countries such as Jamaica, Cuba, Brazil, Portugal, and New Zealand. 

📖 Weekend Reading

Introducing iHawk, the cutting edge technology aiding England selection [ESPNCricinfo]

Can live sport win back GenZ? [Financial Times]

The real Jurgen Klopp [The Athletic (Part 1), (Part 2), (Part 3), (Part 4), (Part 5)]

That’s all for this week. If you enjoyed reading The Playbook, please share it with your friends, family, and colleagues. Please also subscribe to it (for free) if you haven’t already.

You can reach out to me at venkat@thecore.in with any feedback (good, bad, or ugly), tips, and ideas. I take my mailbag seriously, and would love to hear from you! You can also connect with me on X (@venkatananth) and LinkedIn. Thanks for reading, and see you again next Friday!