People have been predicting for a while now that it was only a matter of time before the big streaming platforms got serious about disrupting the lucrative live sports market. Until fairly recently, they seemed more interested in one-off marquee events than in longer-term licences. That’s now changing.
Last week, Netflix announced it had bought the rights to all 104 matches of the 2030 World Cup in Spain, which co-hosts the tournament with Portugal and Morocco. The price wasn’t disclosed. RTVE, the Spanish public broadcaster, reportedly paid €55 million for this summer’s tournament. Netflix already holds the North American rights to the next two women’s World Cups, and it is among a group of streamers preparing to take on Fox for the US rights to the 2030 and 2034 men’s tournaments, a bundle Fifa hopes might fetch as much as $4 billion.
Netflix executives spent years explaining why they didn’t need sport. Their first live forays were deliberately eye-catching: a Mike Tyson comeback fight here, a couple of NFL games on Christmas Day there. Then came a 10-year $5 billion deal for WWE wrestling, a slice of Major League Baseball and now the biggest football tournament on the planet in one of its main markets (Spain holds both the men’s and women’s World Cup titles).
Why the change of heart? Partly because Netflix and its rivals have run out of easy growth in mature markets. Keeping existing subscribers is just as important as finding new ones, and sport is the most reliable antidote for churn. People who binge a drama often cancel when it ends, but people who follow a team tend to stay for the whole season.
Then there’s advertising. Every big streamer now offers a cheaper tier carrying ads, and advertisers will pay a premium for audiences watching live in large numbers simultaneously. Sport is almost the only programming that delivers that any more. The irony is that the streamers did more than anyone to break the habit of collective, scheduled viewing. Now they are spending heavily to buy it back.
[ Watching the Premier League in Ireland is a strikingly costly businessOpens in new window ]
The economics of sports rights explains why the price keeps rising inexorably. A league or federation sells something that cannot be replicated by a new entrant (no matter how hard the Saudis try). Rights are carved up by territory, by package and by platform to maximise the number of bidders. Those bidders need the property so badly that they overpay for it. The pay-TV model that Sky built around the Premier League in the 1990s established the principle of sport as the anchor holding an expensive bundle together.
Now the bundle is fraying. According to Ampere Analysis, streaming services will spend about $14.2 billion on sports rights this year. Amazon has overtaken DAZN as the biggest spender, and general entertainment platforms like Amazon, Netflix, Disney+, Apple and Paramount+ now account for 44 per cent of the total, up from 31 per cent last year. Their advantage over a specialist like DAZN, which has lost billions acquiring and distributing rights across Europe and Japan, is that sport doesn’t have to pay for itself. It only has to make the wider subscription more sticky. And a global platform can spread the cost across hundreds of millions of customers.
But the Spanish deal also shows the limits of exclusivity. Netflix will make one match each day free to watch, and will sub-licence a package to a free-to-air channel that includes every Spain game, both semi-finals and the final. This year’s final in New Jersey drew an average Spanish audience of more than 15 million. No sponsor wants to give up an audience on that scale, and neither does Fifa.
Nor does the law permit it. Under the EU’s audiovisual media rules, member states can draw up lists of events considered so important to society that they must be available on free television. Spain’s 2022 audiovisual law includes the World Cup semi-finals and final. So the Netflix deal recognises that obligation.
Ireland has its own version of these rules. Under section 162 of the Broadcasting Act 2009, designated events include the All-Ireland football and hurling finals, Ireland’s games at the World Cup and European Championship along with the opening games, semi-finals and finals of both tournaments. To qualify, a broadcaster must offer a free service reaching more than 90 per cent of the population. These lists were designed to stop Rupert Murdoch putting national shared moments behind a paywall. Whether they are fit for an era when the bidder is a global streamer, possibly one with a free tier of its own, is a question that can’t be avoided forever.
Irish soccer fans are already feeling the effects of fragmentation. From next year, anyone who wants to follow every Champions League game will need RTÉ, Premier Sports, Sky, Amazon Prime Video and Paramount+, which has taken the bulk of the British rights from TNT Sports. RTÉ has held on to its Wednesday night first pick, but it is now one tenant among many. In Gaelic games, GAAGO has shown how quickly matches viewers once took for granted can migrate behind a paywall and how vociferously the public objects when they do. All of this, of course, is welcome news for dodgy box vendors.
Free-to-air sport in Ireland is not going away. The designated list remains a protection, and RTÉ still has the reach that rights holders and sponsors value. But the new bidding war is changing the calculus. The streamers are bigger, richer and more strategically focused than the satellite companies ever were, and they’re no longer content to view live sport as an optional extra.