Will the “loser” actually be the winner? Likely, Netflix will pay a large premium, and take on considerable debt, to acquire most of Warner Bros.’ roughly $100 billion in entertainment assets, though Paramount may yet make other moves. Seven years ago, Disney took a similar step (which it likely regrets) with its $71 billion acquisition of 21st Century Fox’s film and TV library portfolio, its studio operations and cable networks (including RSNs resold to Sinclair and then put into bankruptcy).

Asset purchases are obviously different than operating expenses, but we argue that both companies might be better off spending a significant portion of that on sports rights instead!

Indeed, in a streaming world, sports is the growth opportunity:

1. Sports stands out on streaming services — entertainment content does not. Over the holidays, we spent several evenings trying to find compelling new movies and TV shows on multiple streaming services. It wasn’t easy. Every service features endless rows of colorful tiles with the title and some art, none particularly effective in informing you about the content nor convincing you to watch. Trailers help, but still don’t do the job well — mostly “best-of” spin. Meanwhile, when Prime Video prominently promotes a Spurs-Lakers game on its sign-in page, everyone knows what that is because …

2. Sports brands matter — instant personalization! With exceptions (e.g., Disney), few choose a film based upon the particular studio producing it. In contrast, the NFL, NBA, MLB, NHL, NASCAR, SEC and Big Ten are all significant........

© Sports Business Journal