There is no sign of change in Netflix’s sports approach; David Ellison tells CNBC that Paramount anticipates continuing NFL relationship without commenting on “the ongoing negotiation;” and FIFA will reportedly permit World Cup broadcasters to cut away to commercials during “hydration breaks.” Plus news on Lou Holtz, Formula 1, Tennis Channel and Cumulus Media.
No sign of change in Netflix sports approach
Netflix co-CEO Ted Sarandos said last week that the company would use the $2.8 billion termination fee it received as part of its failed Warner Bros. Discovery deal to continue “investing in the business,” per Lucas Shaw of Bloomberg, but it was not clear what if any impact that would have on the streamer’s sports ambitions. Netflix remains committed to an ‘event’ strategy, with CFO Spence Neumann telling investors at the Morgan Stanley Technology, Media and Telecom Conference Wednesday that the company sees sports as “a nice complement” to its business and has no interest in “being in the business of big seasons of big sports.”
“We think that’s a pretty tough business to be in, and we don’t think we need it to deliver that improving member value,” Neumann added. The NFL is reportedly considering creating what would likely be five-game packages for Netflix, as well as Amazon and YouTube, according to John Ourand of Puck. It should be noted that Netflix CCO Bela Bajaria expressed interest in rights for NFL Sunday afternoon games if they hypothetically became available while appearing on “The Town” podcast in February of last year.
Sarandos discussed “big live events” on a recent earnings call, explaining that they “typically have outsized positive impacts on the business around conversation and acquisition.” Even so, it is still a small part of the content spend, which is expected to reach $20 billion this year.
Netflix is entering the final season of a three-year deal with the NFL to televise Christmas Day games. The streamer, which has more than 325 million subscribers globally, has steadily expanded its footprint through new deals with WWE, Major League Baseball and FIFA in recent years. Netflix is also going to simulcast the Formula 1 Canadian Grand Prix in May under a collaboration with Apple.
Ellison: Paramount has “planned accordingly” to continue NFL relationship
Paramount chairman/CEO David Ellison said on CNBC Thursday that the company has “planned accordingly” to continue its relationship with the National Football League but did not comment on what he called an “ongoing negotiation.” Ellison added that Paramount has “a phenomenal relationship” with the league that he anticipates to continue “for the foreseeable future.” The NFL is widely expected to explore renegotiating its media rights deals this year, years earlier than the opt-out provisions in those contracts. CBS is scheduled to air the Super Bowl in 2028 and 2032 under its existing deal.
Ellison’s comments echo those of Paramount president Jeff Shell, who on an earnings call last week expressed confidence that the company will maintain its relationship with the league. The NFL holds an equity stake in Paramount through its Skydance Sports joint venture, although it is “significantly less” than its 10% stake in ESPN. Paramount reported its earnings before announcing its signed merger agreement to acquire Warner Bros. Discovery.
The Ellison Family Trust and RedBird Capital agreed to provide $47 billion in equity as part of the WBD transaction. The new, combined company will hold $79 billion of debt that it looks to deleverage while continuing to invest in content. While appearing on “The Town” podcast this week, RedBird Capital founder/managing partner Gerry Cardinale said the money that would go towards those initiatives is “fungible” and touted the company’s sports portfolio.
“Sports rights, like all other content spend, are continuing to go up, and we’ve got to be able to run this whole pro forma entity very efficiently to be able to continue to compete and reinvest in the business, and so I like the fact that we’re buying the whole company,” Cardinale said. “It gives us real foundations for synergies, both on the revenue side, on the cost realization side. CBS is the crown jewel in the linear portfolio, and that is why we’re different than what Warners and Discovery had to deal with when they did their deal.”
FIFA to reportedly allow TV commercials during World Cup hydration breaks
FIFA will allow broadcasters to cut away to commercials during World Cup “hydration breaks” this summer, according to a report by Henry Bushnell of The Athletic. Per the report, only FIFA sponsors are allowed split-screen inventory. Networks can sell ads to anyone of their choosing if they opt to cut away entirely.
FIFA written guidelines obtained in the report indicate that breaks should not begin “within 20 seconds” of the referee blowing the whistle for the break, and that the match feed needs to be back “more than 30 seconds before play resumes.” The “hydration breaks” will occur at the middle of each 45-minute half throughout the tournament.
Fox has not revealed how it will handle hydration breaks, which are being implemented to account for high temperatures in North America. Sources briefed on the plans cited in the report said there will be “some advertising during the breaks” and that plans on its display are unknown. The company is entering the final year of its media rights contract with FIFA to air World Cup games.
Telemundo EVP/sports Joaquin Duro told The Athletic that he wants to see what is taking place during the breaks but also assured that the network’s “sponsors will be present.” Whether Telemundo will decide to fully cutaway to advertisements or utilize a split-screen feed remains to be seen, but the network has added banner advertising in previous games with heat-related breaks.
Plus: Lou Holtz, Formula 1, Tennis Channel, Cumulus Media
- Former Notre Dame football coach Lou Holtz has passed away at the age of 89, it was announced by his family on Wednesday. Holtz formerly served as an analyst at ESPN for 11 years where he worked on the “Saturday College Football Final” show with Rece Davis and Mark May and also made appearances on “SportsCenter.” Holtz worked as a college football analyst for CBS Sports in his first retirement before returning to coaching in the 1999 season with South Carolina.
- Ahead of its debut broadcasting Formula 1 races in the United States, Apple said Thursday the Fox-owned streaming service Tubi will carry alt-casts for races to be announced during the season. In addition, Formula 1 practice and qualifying sessions will be available to stream through Yahoo Sports under “a new streaming collaboration.” Univision is also going to simulcast one Formula 1 race this season with accompanying “pre- and post-race programming.”
- Users can now subscribe to Sinclair-owned Tennis Channel through Amazon’s Prime Video for $12/month, Sports Media Watch has confirmed. Tennis Channel CEO Jeff Blackburn said that the network “is the perfect add to a bundle,” per Lucas Shaw of Bloomberg, who was first to report the news.
- Cumulus Media has filed to enter prepackaged Chapter 11 bankruptcy proceedings as it seeks to “eliminate approximately $600 million in debt” through a restructuring support agreement, it was announced Thursday. Cumulus, which owns and operates nearly 400 radio stations in the United States and also syndicates content through Westwood One, said it will continue operating as normal as it tries to reduce debt. The company’s reorganization plan would cancel its “existing funded indebtedness,” and grant debt-holders all of its reorganized equity plus “$50 million of new convertible notes.” Cumulus previously filed for Chapter 11 bankruptcy in 2017 and emerged the next year with debt reduced by $1.04 billion.
