Netflix CEO Calls Live Sports a ‘Loss Leader’

Netflix co-CEO Ted Sarandos revealed why the world’s biggest streaming service doesn’t offer live sports.

“We’ve not seen a profit path to renting big sports,” Sarandos said on Tuesday at the UBS Global TMT Conference in New York City. 

While noting that Netflix isn’t completely closing the door on a favorable opportunity, Sarandos characterized live sports as “dramatically expensive” and essentially a “loss leader.”

• The company scored $7.9 billion in third-quarter revenue and $1.4 billion in net income.
• While Netflix has been profitable every quarter this year, other major streaming networks — such as Disney’s bundle of Disney+, ESPN+, and Hulu — have yet to turn a profit. 
• Netflix had 223 million subscribers as of October.

“We’re not anti-sports,” said Sarandos. “We’re just pro-profit.”

Media

| by Abigail Gentrup

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Sarandos’ comments cut against previous reporting that Netflix had looked to acquire rights to tennis tours as well as purchasing the World Surf League. It also looked into nabbing Formula 1 rights before ESPN signed a three-year contract for $75 million to $90 million annually.

Netflix confirmed in May that it will renew its hit F1 series “Drive to Survive” for a fifth and sixth season. The streamer is also working with “Drive to Survive” producer Box to Box on a series covering top tennis players and the Grand Slam events.