According to recent media reports, Netflix (NASDAQ:NFLX) is set to acquire exclusive rights to two NFL Christmas Day games. With the NFL set to release its 2024-25 schedule on Wednesday, analysts provided an update on the likely cost as well as the audience and revenue implications of the two games.
According to Guggenheim’s estimates, the two games are estimated to cost around $200-$250 million combined. Initial reports had indicated that NFL was going to auction the two Christmas Day games with the bidding to begin at around $50M. But the analysts arrived at their estimate based on the success of last year’s Christmas Day slate, the reported rights fees paid by Amazon and Comcast for exclusive streaming games, and the firm’s belief that demand from multiple parties will be strong.
On what exclusive rights to these two games would mean for Netflix, the analysts wrote, “NFL games are the most impactful live content in the U.S. and exclusive game rights would be a powerful leap forward in Netflix’s live sports ambitions.”
“The audience size for NFL games dwarfs all other live programming, and a small slate would sit at the steep part of the curve for viewership, advertising, and content promotion opportunities,” they added.
Guggenheim also projects that these games will generate direct advertising revenue alone of around $185M in addition to any incremental subscriber growth, engagement or promotional impact. This would represent a 15.7% lift to the firm’s current 2024 advertising forecast of 1.18B.
Based on the firm’s analysis of the viewership of past games and other factors, the analysts estimate the games will garner an audience of around 22M viewers, or around 75% of an average broadcast audience.
Guggenheim currently has a Buy rating on Netflix stock and a price target of $700. Netflix stock was trading at $616.80 in Tuesday’s premarket session.