Netflix enters the $150 million NFL Christmas test with shares up 91% year-to-date

Topline

Netflix’s first appearance as a major sports channel is sure to attract Wall Street’s attention, although the company has already given investors a great year as the streaming leader rapidly increases profits.

An airship advertises Netflix’s NFL games.

Getty Images

Important facts

Netflix has national broadcast rights to two NFL games on Wednesday – the Kansas City Chiefs vs. the Pittsburgh Steelers at 1:00 p.m. EST and the Baltimore Ravens vs. the Houston Texans at 4:30 p.m. EST – featuring performances by pop stars Mariah Carey and Beyoncé Accompaniment of football.

The soccer games are a “major live advertising event” with the potential to drive “scaling and monetization through 2025” for the streamer’s ad-supported subscription tier, JPMorgan analyst Doug Anmuth wrote in a note to clients earlier this month.

Netflix’s splashy Christmas performance comes as the company enjoyed a strong year on the stock market, thanks in large part to its record-breaking financial performance.

Up 91% year-to-date through Tuesday, Netflix stock is well on track for its best year since 2015.

This 91% rally makes Netflix the 13th best-performing stock in the S&P 500 index. Among American companies worth at least $200 billion, it trails only artificial intelligence darlings Nvidia and Broadcom, and significantly dwarfs the returns of entertainment companies like Disney (26%). , NBC and Peacock parent Comcast (-7%), Max parent Warner Bros. Discovery (-7%) and CBS parent Paramount (-28%).

The robust returns follow a banner year for Netflix, which reported strong profits while many of its streaming rivals have struggled to match: 2024 forecast revenue of $39 billion and forecast net income of $8.7 billion Dollars are 15% and 60% higher, respectively, than record 2023 results, according to FactSet data showing the company’s first three quarter results and consensus forecasts of analysts for the last quarter.

Important background

According to the Wall Street Journal, Netflix paid the NFL $150 million for the rights to Wednesday’s games. This high total followed high ratings for the three nationally televised Christmas games in 2023, each ranking among the top 20 broadcasts of the year in the United States. The NFL Christmas games will be the first mainstream American team sports events on Netflix, which has made waves with its foray into live sports. Last month, Netflix aired a boxing match between influencer Jake Paul and 58-year-old former heavyweight champion Mike Tyson and later picked up the rights to the next two FIFA Women’s World Cup tournaments. The company announced in January that it would air WWE’s weekly wrestling program “Raw” for a reported $5 billion over the next decade.

Big number

7%. That’s the share of NFL games this season that are available exclusively on streaming services, according to boutique equity research firm MoffettNathanson.

Surprising fact

Netflix stock has significantly outperformed other traditional media and streaming services in the NFL broadcasting business over the past five years, delivering an annual return of 36%.

Breaking News

Dellupodisabato