Topline
Netflix’s first run as a bigtime sports broadcaster will surely catch the eye of Wall Street, though the company has already delivered a great year for investors as the streaming leader rapidly grows profits.
A blimp advertises the Netflix's NFL games.
Key Facts
Netflix holds the national broadcast rights to a pair of NFL games Wednesday – the Kansas City Chiefs at the Pittsburgh Steelers at 1 p.m. EST and the Baltimore Ravens at the Houston Texans at 4:30 p.m. EST – with performances from pop stars Mariah Carey and Beyoncé accompanying the football.
The football games provide a “major live ad event” with the potential to drive “scale & monetization into 2025” for the streamer’s advertising-supported subscription tier, JPMorgan analyst Doug Anmuth wrote in a note to clients earlier this month.
The splashy Christmas showing from Netflix comes as the company enjoyed a strong year on the stock market thanks in large part to its record financial performance.
Netflix stock’s 91% year-to-date gain through Tuesday has it comfortably on track for its best year since 2015.
That 91% rally makes Netflix the 13th-best performing stock listed on the S&P 500 index, trailing only artificial intelligence darlings Nvidia and Broadcom among American companies worth at least $200 billion, and crucially dwarfing the returns of entertainment peers like Disney (26%), NBC and Peacock parent Comcast (-7%), Max parent Warner Bros. Discovery (-7%) and CBS parent Paramount (-28%).
The robust returns follow a banner year for Netflix, which has reported strong profits as many of its streaming rivals struggle to do so: Its $39 billion in projected 2024 revenue and $8.7 billion forecasted net profit are 15% and 60% jumps from 2023’s record results, respectively, according to FactSet data blending the company’s results over the first three quarters and consensus analyst forecasts for the final quarter.
Key Background
Netflix paid the NFL $150 million for rights to the Wednesday games, according to The Wall Street Journal. That hefty sum followed high ratings on 2023’s trio of nationally televised Christmas games, each of which ranked in the U.S.’ top 20 broadcasts of the year. The Christmas NFL games will be the first mainstream American team sporting events on Netflix, which has made a splash for its push into live sports. Netflix aired last month a boxing match between influencer Jake Paul and the 58-year-old former heavyweight champion Mike Tyson and later secured the rights to the next two FIFA Women’s World Cup tournaments.The company announced in January it will air the WWE’s weekly wrestling program “Raw” for a reported $5 billion over the next decade.
Big Number
7%. That’s the proportion of NFL games this season available exclusively via streaming services, according to boutique equity research firm MoffettNathanson.
Surprising Fact
Netflix stock has easily outperformed those of other legacy media and streaming services in the NFL broadcast business over the last five years, posting an annualized return of 36%.
