Since its founding, Netflix has eschewed acquiring rights to live sports — until now.

The global streaming leader is reportedly among those competing for Formula 1’s U.S. broadcast rights, according to Business Insider. 

Disney-owned ESPN hopes to retain the rights, which expire this year. NBCUniversal and Amazon are also in the mix for the global racing series that has exploded in popularity, in part due to Netflix’ hit docuseries “Drive to Survive.”

• ESPN submitted an initial bid of $70 million per year.
• F1 parent Liberty Media is seeking a contract around $100 million annually. 

F1 has a growing presence in the U.S., with Miami joining Austin as a Grand Prix site in May and Las Vegas coming next year. Miami’s inaugural race drew 2.6 million average viewers on ABC, the highest-ever figure for a U.S. broadcast.

Netflix’ Gear Shift

Netflix, which lost subscribers for the first time in more than a decade over the first quarter, plans to introduce an ad-supported user tier next year. While the slip has caused consternation across the streaming industry, Liberty Media CEO Greg Maffei seems undeterred. 

“It is interesting how the world fragmented with cable households, and how many there are compared to Netflix households and [Amazon] Prime households,” said Maffei prior to the Miami Grand Prix. “The idea that the broadest audience is on cable — that’s becoming a lot less clear.”

Netflix had 221.6 million subscribers at the end of Q1, including 74.6 million in the U.S. and Canada.

A single tweet led to the NBA losing “hundreds of millions of dollars,” according to league commissioner Adam Silver.

The league was blacked out on China’s CCTV for 18 months following an October 2019 tweet in support of Hong Kong protestors by Daryl Morey, then the general manager of the Houston Rockets. Morey is now president of the Philadelphia 76ers. 

• The NBA’s China business is worth around $5 billion.
• NBA owners have more than $10 billion invested in Chinese businesses, led by Brooklyn Nets owner Joseph Tsai.
• CCTV resumed broadcasting the NBA in March. 

“Others since then have spoken out about their views around China and other places in the world, and if the consequences are that we’re taken off the air or we lose money, we accept that,” Silver said.

Credit Where It’s Due

On Friday, ratings agency Fitch gave three senior-secured funding notes released by NBA affiliate Hardwood Funding an A- rating. The notes total $417 million.

Fitch cited “the NBA’s stable financial position supported by the strength of the league’s broadcast contracts and the underlying core economic model of the NBA.” 

The ratings agency noted the league’s “moderate levels of revenue sharing” and “soft salary cap,” which it said promotes competitive balance.

“The league’s solid viewership and attendance trends coupled with robust international growth indicate a strengthening position among professional sports leagues,” Fitch wrote.

StockX is speaking out weeks after being sued by Nike for allegedly selling counterfeit shoes.

The resale platform, which reached a $3.8 billion valuation last year, filed a response to the lawsuit with the U.S. District Court in New York City on Monday, also mentioning Nike’s previous praise of the company.

“In the past, Nike has sought to collaborate with StockX and has communicated confidence in the StockX authentication process,” the draft noted. 

And while the ties may have once been solid, the pair’s relationship changed in February.

• Nike sued StockX over NFTs, accusing the latter of trademark infringement — some of StockX’s NFTs included Nike shoes. 
• In May, Nike said it purchased four pairs of counterfeit shoes from StockX — including one matching an NFT — that were verified by StockX as authentic. 
• StockX’s draft notes that its authentication process has prevented the sale of $60 million worth of counterfeit sneakers.

“Nike’s recent allegations lack merit, demonstrate a lack of understanding of the modern marketplace, and display anti-competition behavior that will stifle the secondary market and hurt consumers,” StockX CEO Scott Cutler said in a statement.

StockX Sums

If the company was knowingly selling counterfeit goods, StockX would reportedly have to pay triple the damages of a standard claim, adding to Nike’s already stacked statements. The Swoosh reported $10.9 billion in third-quarter revenue.

Harris Blitzer Sports & Entertainment has sold a stake in the company to Arctos Sports Partners, reportedly valuing the owner of the Philadelphia 76ers and New Jersey Devils at $3 billion.

The deal allows Arctos — a private equity investor that has raised at least $5 billion across multiple funds — to purchase more than a 5% stake in HBSE over an undisclosed period.

• Arctos is the first private equity fund to invest in the NHL with stakes in the Tampa Bay Lightning and Minnesota Wild. 
• The fund bought a 17% stake in the Sacramento Kings in September 2021, valuing the franchise at $1.8 billion.
• It reportedly holds stakes in five MLB teams, including the Los Angeles Dodgers. 

Arctos has investments outside the U.S. and its pro sports leagues. 

It holds a minority stake in Fenway Sports Group, which owns Liverpool, the Boston Red Sox, and the Pittsburgh Penguins. The fund also invested $36 million in Italian soccer club Atalanta last month. 

Business Partners 

In January, David Blitzer agreed to buy a controlling stake in MLS club Real Salt Lake. The deal, which includes MLS NEXT Pro’s Real Monarchs and Rio Tinto Stadium, involves Arctos in the transaction.

In May, Arctos closed an investment in Elevate Sports Ventures, a consulting firm and joint venture between HBSE, Creative Artists Agency, and the San Francisco 49ers.