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The Netflix subscription model has long been talked about as the future of on-demand sports broadcasting so it came as something of a surprise earlier this month to hear one of its most senior executives torching that theory.

“We’ve not seen a profit path to renting big sports,” Ted Sarandos, the co-CEO of Netflix, told the UBS Global TMT Conference in New York City. “We’re not anti-sports. We’re just pro-profit.” 

The main crux of Sarandos' argument was that the cost of paying for rights had risen so stratospherically that paying exorbitant sums to host live sports events represented nothing more than a loss leader for Netflix – kind of like the same approach Netflix takes to UK corporation tax.

Joking aside, Sarandos' has a point: the global value of live sports rights has reached £44 billion for 2022 alone and is expected to surpass the £48 billion mark annually in the next two years. It had seemed it would only be a matter of time before Netflix took the plunge and entered the sports market. The company recently adopted ad-streaming for its cheaper subscription plans and that move had been perceived by observers as the first steps towards entering the online sports market, as has happened at Amazon – with its Premier League offering and an 11-year exclusive deal with the NFL for Thursday Night Football – and Apple – which has just agreed a 10-year, $250 million annually, deal with Major League Soccer and another with Major League Baseball.

That plan seemed to be moving a step nearer after it emerged there had been tentative talks with a number of tennis tours and the World Surf League and there had also been speculation of bid for Formula One's rights after the success of the Netflix behind-the-scenes series Drive to Survive. But that was before Sarandos' announcement which has firmly kiboshed the idea of Netflix entering the arena any time soon with the 58-year-old adding: “We have yet to figure out how to do it. But I’m very confident we can get twice as big as we are without sports.”

The Herald:

His words have to be seen in the context of a company that has paused its spending on content due to a decline in subscriptions – which fell by 200,000 in April and in part explains why 35% was wiped off Netflix's share price earlier this year. The company does see value in one area, though, and has committed to producing more sports docuseries with a tennis documentary set to air in January and plans in place for fly-on-the-wall projects covering the Tour de France and PGA Tour golf set to follow.

There is a wider issue too. There is a sense that the sports streaming market is becoming increasingly saturated, a feeling that can be seen in Viaplay's entry into European football, a move which led to the company buying the rights for the Scotland men's national team (from 2024) as well as taking over title sponsorship of the League Cup and broadcasting a host of other sports including Elite League ice hockey and Champions Cup rugby.

Meanwhile, earlier this week, ESPN announced that it was introducing a new service for American subscribers that will offer one Major League Baseball game per day, a daily NHL game, exclusive boxing, PGA Tour golf on Thursdays and Fridays with much more limited coverage for Saturdays and Sundays, College Football, MLS, Grand Slam tennis and rugby and cricket. In the States, Disney+ and Hulu have also dipped their toes into the sports market but have failed to turn a profit yet Netflix – which has remained on the outside looking in – has done so in every quarter this year.