Netflix’s sports spending spree faces a Wall Street gut check
Netflix says live events boost signups and ads, but weak engagement growth and costly rights have analysts questioning the playbook.
By Frankie Delgado · News Reporter
4 min read
Netflix is putting serious cash behind live sports, and Wall Street is already checking the scoreboard.
The streaming giant told investors that live programming is becoming a bigger part of its plan, even though the company expects those events to account for a small slice of total viewing. On Netflix’s Thursday earnings call, co-Chief Executive Greg Peters said live events help generate advertising revenue, build fan interest and serve as a promotional platform.
According to Netflix’s shareholder letter, six of its 10 busiest days for new-member signups over the past five years were connected to live events. Peters also said the company may spend 5% of its content budget on live events in 2026, while expecting that programming to make up 1% of viewing hours.
That math is getting attention because sports rights are pricey, and Netflix’s broader engagement trends have become a sore spot for investors.
Sports rights are getting expensive
Netflix now has rights to show live events across football, baseball, boxing and wrestling, according to MarketWatch. Its Christmas Day NFL games cost a reported $150 million a year, according to The Athletic. MarketWatch reported that the costs tied to boxing and MMA matches have not been publicly disclosed.
Robert Fishman, an analyst at MoffettNathanson, wrote Friday that Netflix has a chance to push harder into advertising by growing in sports, which he said could support higher ad prices.
Still, the spending comes as Netflix’s free cash flow fell 33% in the second quarter from a year earlier. The company expects content costs to rise 10% for the full year, while revenue is projected to grow faster, at 13% to 14%.
Investors did not greet the update warmly. Netflix shares were down more than 11% in premarket trading Friday after mixed results, according to MarketWatch. Through Thursday’s close, the stock had dropped 46% over the past year, while the S&P 500 had gained 20%.
Bernstein analyst Laurent Yoon wrote after the report that Netflix, as a major content distribution platform, needs to expand what it offers in order to hold its position over time.
One live test underwhelmed
Netflix’s debut with the MLB Home Run Derby drew 5.3 million viewers on Monday, according to Austin Karp of Sports Business Journal. ESPN and ESPN2 drew 5.7 million viewers for last year’s event, and Karp reported that this year’s derby was the least watched since 2003.
Jacqueline Corbelli, CEO of TV advertising technology company BrightLine, told MarketWatch that sports rights may be highly sought after, but individual sports events vary widely in public awareness. Speaking about the Home Run Derby, she asked why viewers would know it was being shown on Netflix.
Tyler Aquilina, a media analyst at Luminate Intelligence, told MarketWatch that the purpose of these events is not only to attract viewers for the event itself, but to bring people onto Netflix so they keep watching afterward. He said that, by that measure, the strategy does not appear to be working especially well.
Aquilina added that he would be surprised if Netflix did not keep adding NFL rights, noting that the company has already added three more games for the upcoming 2026 season.
The next big bet is soccer
Netflix may also be looking beyond sports. The Wall Street Journal reported earlier this month that the company was weighing the addition of TV channels. MarketWatch said Netflix did not immediately respond to a request for comment.
The company’s engagement report showed viewers watched more than 97 billion hours of Netflix content in the first half of the year, up 2% from more than 95 billion hours in the same period a year earlier. MarketWatch reported that slow engagement growth has worried investors.
One looming sports deal could give Netflix a cleaner shot at a global audience. The 2027 FIFA Women’s World Cup will stream exclusively on Netflix, according to the company’s Tudum site. MarketWatch noted that the 2026 FIFA World Cup has already shown strong global demand for elite soccer, with the U.S. men’s team drawing record ratings for several matches.
This story draws on original reporting from MarketWatch.