Netflix is just like any other business. As time goes by, changes happen. The platform knows a thing or two about evolution. Remember when Netflix was a DVD rental service? I do, because I was a customer. Today, it’s a giant in the streaming industry, with 325 million subscribers and counting. But despite that success, Netflix announced layoffs affecting approximately 6% of its workforce on Wednesday.
No network, distributor, talent or platform is immune to workforce reductions. Cost-cutting has become part of the business landscape. More than 1,000 employees are losing their jobs, while Netflix shares have struggled this year. Growth has slowed, and spending on content continues to rise. But could these cuts be part of a bigger strategy for Netflix in the sports arena?
Without a doubt, Netflix wants a bigger presence in live events. They draw audiences, attract subscribers and generate engagement. There’s a reason Netflix invested in the 2027 and 2031 FIFA Women’s World Cup and secured exclusive rights in Spain and Andorra to the 2030 FIFA Men’s World Cup earlier this week.
Netflix has expanded its NFL portfolio this year with games beyond Christmas Day, including a Thanksgiving Eve matchup and the season opener in Australia. The company also secured a three-year agreement with Major League Baseball that began this season, bringing Opening Night, the Home Run Derby and the Field of Dreams Game to the platform.
What about the NHL? The league’s national media rights agreements with ESPN and Warner Bros. Discovery run through the 2027-28 season, with exclusive negotiations reportedly underway.
The NBA’s national media rights are locked in for years to come. However, could the league create another package of games to sell to Netflix? Perhaps it could offer an in-season tournament or the All-Star festivities. As the NBA considers a centralized hub for its regional media rights, could Netflix emerge as an alternative to DAZN and its evolving approach to sports distribution?
Live Sports Is The Rocket Fuel
Netflix co-CEO Ted Sarandos acknowledged last week that he isn’t satisfied with the platform’s growth.
“Overall, we’re not growing as fast as I want us to, and we’re working on making that move faster,” Sarandos said at the Bloomberg Screentime conference in Los Angeles. “We are, though, also doing things that create a lot of headwind to that number.”
According to CNBC, Netflix continues to expand beyond its core business of films and television series. Approximately 5% of its $20 billion content budget goes toward live programming, including live events.
Could this week’s layoffs be part of an effort to redirect resources toward live sports rights? Is Netflix looking to make room in its budget to pursue more major events?
If you don’t think Netflix has become a destination for live sports, you’re fooling yourself. The NFL season opener in Australia drew an average U.S. audience of 18.5 million viewers, peaking at 21.3 million. Through the first three weeks of this season, NFL games across all networks were averaging approximately 20 million viewers per game.
Netflix has only been in the NFL business for three years, and its schedule remains relatively limited. Add more games, expand the audience and create more opportunities to attract subscribers and viewership on par with any network. That’s a formula Netflix could pursue as it looks to strengthen its position in live sports.
Sure, MLB’s early returns on Netflix weren’t spectacular. This was the streaming platform’s first season carrying major league baseball events, a sport with an older audience profile than some of its major competitors. Still, Opening Night drew just under 3 million viewers, making it the most-watched Opening Day audience since 2020.
When Opportunity Knocks
With uncertainty surrounding the future of TNT Sports amid the Skydance merger, would it be out of the question for Netflix to add NHL events to its slate? Imagine the Winter Classic on Netflix, bringing the game to a global audience. There could be significant benefits for the NHL in reaching viewers beyond its traditional markets on a platform like Netflix.
More broadly, the way Skydance combines CBS Sports and TNT Sports could reshape the sports rights landscape. As companies reassess their portfolios and distribution strategies, opportunities could emerge for Netflix to invest in properties that reach new audiences.
Netflix’s decision to lay off more than 1,000 employees is a reminder that even successful companies continually evaluate where to invest and where to cut costs. But what if these layoffs are about more than slowing growth, rising content expenses or improving the bottom line?
What if Netflix is positioning itself for an aggressive push into live sports?
The company has demonstrated that it can draw substantial audiences for the NFL and is establishing a presence in MLB. With potential opportunities across the NHL, NBA and other major sports properties, Netflix could be preparing to spend considerably more on the rights that bring fans together in real time.
The streaming wars are no longer just about who has the best original series or the biggest library of movies. Those offerings remain important, but the competition increasingly centers on who controls the live moments audiences don’t want to miss.
Netflix has the subscriber base, global reach and financial resources to become a serious player in that fight. Perhaps the company’s layoffs are simply about controlling costs. However, if they’re part of a larger strategy to redirect resources toward premium live sports, the next chapter of Netflix’s evolution could be its most significant yet.
The company that once mailed DVDs to your doorstep may be preparing to redefine what it means to be a sports media destination.
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