Netflix could be set to expand into live sports streaming, and its chosen sport appears to be Formula 1 racing — an increasingly popular sport around the world, which has made inroads in the U.S. in the last years, on Netflix itself. The streamer is reportedly in the race to secure the rights for F1 live streaming from next season but faces stiff competition from rival networks.
Business Insider (opens in new tab) reports that Netflix has entered a bidding war with NBCUniversal and ESPN to land the rights to stream F1 races from 2023. ESPN obtained the U.S. rights to F1 streaming in 2017, whereas NBCUniversal held them for the five years prior.
Netflix’s competitors having an established history with F1 might suggest that the streamer is at a disadvantage in these negotiations, but the streamer has done a remarkable job raising the profile of the sport in recent years.
Netflix’s Formula 1: Drive to Survive documentary series has been a mega-hit, and just aired its fourth season earlier this year. Marrying up this popular doc-show and live streams of the sport itself on a single platform would make a lot of commercial sense.
If Netflix does want to become the new home of F1, it’s going to need to fight hard for the rights as ESPN is keen to renew its current deal. In a statement, ESPN executive John Suchenski said: “We are aggressively pursuing a renewal – we feel that we have a distribution package and event presentation that can’t be matched in the industry … It has been a mutually beneficial relationship.” However, he did add that Formula 1 bosses are currently looking at other options, so a renewal is far from secure.
The price needs to be right
The rights to live stream F1 won’t come cheap to whichever party does eventually win. Business Insider suggests that F1 bosses are hoping to strike a deal worth in the region of $100 million. Of course, Netflix recently spent more than double that making Stranger Things season 4, so presumable would have the capital to make a compelling offer.
Netflix has been eyeing up getting into the lucrative live sports streaming market for a while now and F1 seems to be its preferred pick. Back in 2021, CEO Ted Sarandos said: “A few years ago, the rights to Formula 1 were sold. At that time, we were not among the bidders. Today, we would think about it.” So it doesn't come as a big surprise that Netflix is jumping into a bidding war at the first opportunity.
However, the streamer, who has endured a tough 2022 so far courting controversy for canceling multiple well-received shows and confirming its first-ever quarter-over-quarter subscriber decline, will not pursue a deal at any cost. During an earnings call earlier this year Sarandos explained that the company would “have to see a path to growing a big revenue stream and a big profit stream” if it did opt to offer sports coverage to its subscribers.
Facing tough competition
It makes sense that Netflix would be keen to enter the sporting arena, as the majority of its biggest streaming rival currently offer live sports in some form.
Apple TV Plus has the rights to Friday Night Baseball (and is rumored to be hunting NFL rights), whereas Amazon Prime Video offers Thursday Night Football as well as tennis and Premier League soccer coverage. Plus, NBCUniverseal’s Peacock streaming service offers a load of sporting action including both Premier League soccer and select MLB games (as well as WWE live events, which aren't quite sport).
While Disney Plus doesn’t directly offer live sports, Disney is still in the sports game via EPSN and Hulu — and Disney Plus will be offering live events with Dancing with The Stars. All three services are available in a Disney Plus bundle for $13.99 a month (opens in new tab).
Factoring all of this in, it makes a lot of sense that Netflix is actively looking to plug this clear gap in its own content portfolio, and Formula 1 racing really does seem the perfect first step into live sports streaming for the service. Now, it just has a win a bidding war against two very serious opponents, otherwise, it could soon lose its ranking as the best streaming service currently available.