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Quite a lot changed for Netflix during the first quarter of 2026, including walking away from its $82.7 billion deal to acquire the streaming and studios businesses of TNT Sports parent company Warner Bros. Discovery, the beginning of its MLB rights pact, and making sizable inroads in Japan with its World Baseball Classic coverage.
What isn’t changing, though, is the streaming giant’s keen focus on adding more live events, particularly in sports. At the top of the list is the NFL, and Netflix officials confirmed they are in discussions with the league about a potentially expanded rights deal.
The NFL is currently selling a five-game package of live rights, with a final outcome on that expected in the coming weeks as the league finalizes its 2026 regular-season schedule. That inventory generally aligns with Netflix’s strategy of acquiring “breakthrough” sports events as opposed to full-season rights.
“The NFL is a great property, and it delivers value as part of our total offering,” Netflix co-CEO Ted Sarandos said Thursday in an earnings call. “We are in discussions right now, because we think there’s an opportunity to expand the relationship. We’ve learned a lot about what works, and how to value the NFL and live [content] generally over the last couple of years.”
Elsewhere in sports, Netflix averaged three million viewers for its MLB opening night game between the Yankees and Giants. The WBC in Japan delivered 31.4 million viewers according to internal metrics, was the most-watched program ever on Netflix in Japan, and it also prompted the largest single-day number of new subscriptions in that country.
“Events like this are super important because they drive outsized business impact, and they’re kind of a proof point that all engagement is not created equal,” Sarandos said.
Netflix also pointed to a fast-growing advertising business that operates around these live events, and others like it, with that segment set to double in 2026 to $3 billion.
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Netflix, meanwhile, posted another quarter of bullish revenue and earnings—even as the period included the turbulence of the WBD situation—continuing a pattern that unfolded through 2025.
The company reported revenue of $12.25 billion, up 16% compared to the first quarter in 2025 and net income of $5.3 billion, up 83%—with both measures beating Wall Street expectations and buoyed in part by continued subscriber growth.
Netflix stock has risen by more than 25% since its Feb. 26 decision to abandon its WBD pursuit, and Sarandos said Thursday that there are still no regrets about pulling out of that agreement. The $2.8 billion deal-termination fee Netflix received from WBD, funded by CBS Sports parent company Paramount, also contributed meaningfully to the improved earnings.
“At the risk of being a broken record, the WBD deal was a nice-to-have, not a need-to-have, and we remain confident in the core business,” Sarandos said. “The most important benefit of this entire exercise is that we tested our investment discipline, and when the costs of this deal went beyond the value to our business and our shareholders, we were willing to put ego and emotion aside and walk away.”
Still, investors sent Netflix shares down by more than 9% in after-hours trading Thursday, in part due to a more measured forecast for the current quarter. Netflix cofounder and chairman Reed Hastings also said he will not stand for reelection to the board at the company’s annual meeting in June, and will instead pursue philanthropic and personal interests. Hastings was a seminal figure in Netflix’s massive successful transition from a DVD-based business to a streaming one.
“My real contribution at Netflix wasn’t a single decision; it was a focus on member joy, building a culture that others could inherit and improve,” Hastings said.
Paramount is now in the midst of a separate deal to acquire all of WBD, with closing targeted by the end of September. That pact in part contemplates merging Paramount+ and HBO Max into a single streaming service, but a rocky path toward regulatory approval is anticipated.
