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NFL Christmas games on Netflix may initially face resistance from advertisers

Can there ever be too much NFL on TV? Netflix is ​​about to find out.

The streaming giant is likely to face initial resistance in its efforts to land advertisers for two Christmas Day NFL games it has secured for next season, say four people familiar with the current “upfront” market in which U.S. entertainment companies try to sell the bulk of their advertising inventory for their next programming cycles. While Netflix has yet to make a formal offer to potential sponsors for advertising in the games, a discussion on price suggested that a 30-second spot could cost as much as $400,000, one of those people said, and early talks have been underwhelming.

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Netflix declined to make executives available for comment.

The company intends to stream two games on December 25, 2024 – one between the Kansas City Chiefs and Pittsburgh Steelers and another between the Baltimore Ravens and Houston Texans. The deal, announced in May, raised high expectations that Netflix will make bids for more live sports rights in the near future, and reveals its growing interest in creating content that attracts large live audiences while investing in its own ad-supported subscription offering.

Yet those NFL contests won't appear until long after the bulk of holiday shopping, some executives warn, and aren't expected to generate as much demand from advertisers who need to spend money in the fourth quarter. Plus, one of those people says, Netflix seems eager to sell ad packages that would require football advertisers to buy inventory in other areas, including entertainment programming, rather than selling the games individually. “That's not going to work in that market, and not having another NFL will be a problem,” says an executive familiar with Netflix's recent efforts.

The early resistance highlights an interesting debate: In the age of streaming, where sports broadcasts remain the only format consistent enough to attract the large, simultaneous audiences that Madison Avenue and its distributors crave, can they oversaturate the market?

There are signs that this is actually possible.

Major League Baseball struggled to place a package of Sunday games at a new site after NBC rejected the league's efforts to renew its original contract at a higher price, according to people familiar with the matter. MLB eventually struck a deal for the games with Roku, a streamer with little experience producing its own sports broadcasts. ESPN recently sublicensed two College Football Playoff games to Warner Bros. Discovery, believing those rights could be more easily monetized if they were broadcast by a rival network.

The NFL's launch of Thursday Night Football through CBS in 2014 led to a slowdown in the market for Super Bowl commercials. Advertisers realized they could run campaigns in a single season during cheaper Thursday night games rather than spending more than $4 million on a single spot.

The NFL has been one of the biggest supporters of adding new games to the national television schedule. In addition to launching “Thursday Night Football” on its own NFL Network, the league has created a custom “Black Friday” game for Amazon Prime Video and offered postseason games for streaming on NBCUniversal’s Peacock.

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But other leagues may be considering similar ideas, as broadcasters see little alternative but to pay exorbitant licensing fees for sports. In the current season, the NBA has experimented with a tournament it now calls the NBA Cup. Such a maneuver creates additional inventory, although the league is embroiled in negotiations for new rights deals with current rights holders Disney and Warner Bros, Discovery, as well as Amazon and NBCU, which have bid for new packages of games to air on Warner's TNT through next season.

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