Why Netflix Will Lose in Sports

Netflix shareholders may be a happy bunch right now, after the bonanza year the video-streaming stock has enjoyed. Though its revenue is growing at a decent but unspectacular clip—15% in the third quarter—its shares have so far risen 87% this year to above $900 a share. Since their low point in mid-2022, during a freakout about Netflix’s subscriber stall, the stock has soared more than 440%. Given how badly every other streamer is doing, investors seem to regard Netflix as the only streaming stock worth buying.

Shareholders shouldn’t get too comfortable. Today’s news that Netflix has won the rights to exclusively stream the FIFA Women’s World Cup in 2027 and 2031 is a bearish sign for the stock. It’s further evidence—on top of next week’s NFL games streaming on Netflix—that the company has abandoned the admirable discipline that kept it out of live sports and is charging into that morass. That should worry anyone who owns shares in the company.