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Dwayne “The Rock” Johnson and John Cena during their match at WrestleMania XXVIII on April 1, 2012 at Sun Life Stadium in Miami Gardens, Florida.
Ron Elkman | Sports Images | Getty Images Sports | Getty Images
Netflix Co-Chief Executive Officer Ted Sarandos wants to clarify one thing about the company’s deal to license WWE’s RAW for the next 10 years. That is, professional wrestling is not a sport.
“WWE is sports entertainment,” Sarandos declared during Netflix’s fourth quarter earnings call. “This is as close to our core as it is in terms of sports storytelling. In terms of the deal itself, it has the options and protections that you look for in a general licensing agreement, and it’s financially and globally available. I am very satisfied.”Therefore, I do not consider this a sign of a change in sports strategy. ”
After Netflix and WWE’s parent company TKO Group announced the deal on Tuesday morning, questions arose as to whether Netflix would seek to buy the streaming rights to one of the major sports leagues. But Sarandos repeatedly tried to end those discussions.
CNBC reported in October that Netflix had held preliminary discussions with the National Basketball Association about a potential streaming package that could arise when the NBA renews its media rights later this year. Still, given the league’s desire to limit media partners to three, Netflix likely won’t play a major role in negotiations, CNBC reported at the time.
Sarandos’ comments suggest that Netflix will not participate in these or other negotiations regarding traditional live sports rights in the short term. Netflix is moving into “sports-adjacent” programming, building documentary series around Formula 1, professional tennis, golf, cycling and football.
Netflix paid more than $5 billion for WWE’s Raw and other international programming over 10 years. The agreement includes a termination clause for Netflix after five years, with an option for Netflix to extend the agreement for an additional 10 years.
Sarandos called the WWE Raw contract “F1 in reverse” because WWE is popular in the United States and has a relatively small international audience.
“We can build [WWE] Similar to what we experienced in F1 through shoulder programming,” Sarandos said. “Now the event itself is WWE storytelling. So this is a tried-and-true formula for us.”
Still, Netflix executives have a reputation for changing their minds on important business issues. For years, Netflix distanced itself from crackdowns on advertising and password sharing. They have changed tack on both themes in recent years.
The move to pay out a huge rights contract is a clear change for Netflix. Regardless of what Sarandos says on Tuesday, a move into traditional sports could ultimately be the logical step.
WATCH: MNTN’s Mark Douglas talks about Netflix and WWE deal
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