Netflix has officially entered the live sports arena by securing a deal to stream National Football League (NFL) games on Christmas Day for the next three years. This move represents Netflix's most significant venture into live sports broadcasting, underscoring the platform's ambition to diversify its content offerings and capture a broader audience. The NFL announced on Wednesday that Netflix will stream two games on Christmas Day this year, followed by at least one matchup in both 2025 and 2026. These games will also be broadcast on traditional television in local markets and available via the NFL+ mobile app.

Although the financial terms of the deal were not disclosed, sources familiar with the agreement estimate that Netflix will pay around $75 million per game. Neither the NFL nor Netflix representatives commented on the financial specifics. This substantial investment indicates Netflix’s commitment to expanding its content portfolio to include live sports, a sector it has previously approached with caution.

Netflix will produce these broadcasts using its own announcers and will collaborate with existing production companies to ensure high-quality coverage. Ted Sarandos, Netflix’s co-CEO, expressed confidence in the partnership with the NFL, emphasizing that it fits well with the company’s strategy of becoming a go-to destination for major events. "We believe the NFL aligns perfectly with our event strategy, allowing us to effectively own Christmas Day," Sarandos told CNBC.

Historically, Netflix has focused on sports documentaries and series, gaining significant traction with productions like “Formula 1: Drive to Survive” and the “Quarterback” series, which follows NFL quarterbacks. Despite these successes, the company had previously hesitated to dive into live sports broadcasting, citing profitability concerns. In December 2022, Sarandos remarked, “We have not seen a profit path to renting big sports,” and added, “We’re not anti-sports, we’re just pro-profit.”

However, streaming NFL games presents a lucrative opportunity for Netflix, especially as it seeks to boost profitability through various strategies, including raising subscription prices, promoting ad-tier memberships, and cracking down on password sharing. NFL games are among the most-watched broadcasts in the U.S., with the three Christmas Day NFL games averaging 28.68 million viewers last year, according to Sports Media Watch. This high viewership could attract significant advertising revenue for Netflix, enhancing its financial performance.

The Christmas Day NFL games could also serve as a strategic promotional tool for Netflix, particularly as it prepares to begin airing WWE’s “Raw” in January. Despite some past challenges with live events, such as the technical glitch that delayed the “Love Is Blind” live reunion event in April 2023, Netflix is moving forward with its live sports strategy, confident in its ability to deliver high-quality broadcasts.

This announcement comes at a time when streaming platforms are increasingly investing in live sports programming, particularly NFL content. In January, NBCUniversal’s Peacock streamed an NFL Wild Card game exclusively, and Amazon’s Prime Video has secured exclusive rights to an NFL playoff game next season. Amazon also struck a deal with the NFL in 2021, agreeing to pay approximately $1 billion per year for exclusive Thursday Night Football rights over a 10-year period, starting with the 2023 season. This agreement marked the first time a streaming service carried a full package of NFL games exclusively.

Netflix may also be exploring opportunities in other sports. CNBC reported last year that Netflix, along with Amazon, Apple, YouTube TV, and Comcast’s NBCUniversal/Peacock, engaged in preliminary discussions with the National Basketball Association (NBA) regarding potential media rights deals. The NBA’s current contract with Walt Disney and Warner Bros. Discovery is set to expire after the next season, presenting a potential opportunity for Netflix to expand its live sports offerings further.

The decision to invest in live NFL games reflects Netflix’s broader strategy to diversify its content and appeal to a wider audience. By securing the rights to stream some of the most-watched sports events in the U.S., Netflix aims to enhance its value proposition to subscribers and advertisers alike. As the streaming landscape becomes increasingly competitive, Netflix’s move into live sports could help it maintain its leadership position and drive long-term growth.

In conclusion, Netflix's foray into live sports broadcasting with the NFL Christmas Day games is a strategic move designed to capitalize on the immense popularity of the NFL and attract a broader audience. With the potential for significant advertising revenue and increased subscriber engagement, this partnership marks a pivotal moment in Netflix's evolution as a content provider. As the company continues to explore additional live sports opportunities, it positions itself to remain a dominant force in the streaming industry.