Dwayne ''The Rock'' Johnson and John Cena in action during WrestleMania XXVIII at Sun Life Stadium on April 1, 2012 in Miami Gardens, Florida.
Ron Elkman | Sports images | Getty Images Sport | fake images
Netflix Co-CEO Ted Sarandos wants to make one thing clear about the company's agreement to license Raw from WWE for the next ten years: professional wrestling is not a sport.
“WWE is sports entertainment,” Sarandos clarified during Netflix's fourth-quarter earnings conference call. “It's really as close to our core as you can get in terms of sports storytelling. In terms of the deal itself, it has options and the protections that we look for in our overall licensing agreements, and with economics that we're very happy with.” globally. Therefore, I would not consider this as a sign of any change in our sporting strategy.”
After Netflix and WWE parent company TKO Group announced the deal Tuesday morning, questions were raised about whether Netflix would attempt to purchase the streaming rights to a major sports league. But Sarandos repeatedly tried to end those discussions.
Netflix has had some preliminary talks with the National Basketball Association about potential streaming packages that may emerge as the NBA renews its media rights later this year, CNBC reported in October. Still, given the league's desire to limit itself to three media partners, Netflix likely wouldn't play a major role in the negotiations, CNBC reported at the time.
Sarandos' comments suggest that Netflix will not be involved in those talks or any other over traditional live sports rights anytime soon. Netflix has dipped its toe into “sports-adjacent” programming, creating docuseries on Formula 1 and professional tennis, golf, cycling and soccer.
Netflix paid more than $5 billion for 10 years of WWE Raw and other international programming. The deal has an exit clause for Netflix after five years and includes an option for Netflix to extend for an additional 10 years.
Sarandos called the WWE Raw deal “the opposite of Formula 1,” as WWE is popular in the US and has a relatively small international audience.
“We can build [WWE] like we have done with Formula 1 through our programming,” Sarandos said. “Now, the events themselves are the telling of the story with WWE. So this is a proven formula for us.”
Still, Netflix executives have earned a reputation for changing their minds on key business issues. For years, Netflix stayed away from advertising and cracked down on password sharing. They have reversed course on both issues in recent years.
The decision to pay a huge rights deal is a clear change for Netflix. Getting into traditional sports could eventually be a logical step for the company, no matter what Sarandos said Tuesday.
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