It’s hard to believe that Netflix (NASDAQ:NFLX) stock was in a historic funk just two years ago after shedding nearly two-thirds of its value in a hurry. With shares gaining rapidly since then, questions linger as to what the next stop for the stock could be as it looks to land a KO blow in video gaming or even live sports.
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Netflix has been making headlines lately with its partnership with Most Valuable Promotions (MVP) to stream one of the biggest heavyweight boxing bouts in recent memory: Jake Paul vs. Mike Tyson.
Yes, the match may be more for the show than to determine who’s the baddest man on the planet (a title that will always go to Tyson, in my humble opinion). That said, the big bout could mark the first of many live sporting events with knockout potential for Netflix. The big event happens on July 20th, and if the streaming experience goes smoothly, Netflix may be in a spot to disrupt the sporting world at large. As Netflix makes a bigger move into live sports, I can’t help but stay bullish on the stock.
This may not be the first live-event streaming push (Netflix streamed the live-sporting event Netflix Cup just last year), but it’s sure to be one of the biggest to date, given that YouTube influencer and boxer Jake Paul knows how to get bums in seats. In any case, it will certainly be interesting to see how Netflix holds up to a potentially record-breaking number of viewers who will be tuning in to watch Jake Paul take on the legendary heavyweight boxer, who will be 58 years of age come the event.
Netflix: Live Sports Could Drive Netflix Stock Higher Over the Long Haul
If Paul vs. Tyson smashes records (could it be the biggest live-streaming event in history?) and the stream doesn’t go awry, my guess is that Netflix could find itself on the cusp of an expansion in live sports. Undoubtedly, it’s difficult to ignore the growing number of sports streaming deals happening in the tech scene these days.
From Apple (NASDAQ:AAPL) and its exclusive deal to stream Major League Soccer (MLS) matches live on Apple TV+ to Youtube — owned by Alphabet (NASDAQ:GOOGL) — and its $2.5 billion per-season deal to become an exclusive distributor of NFL Sunday Ticket, it’s clear there’s a sort of “gold rush” going on in the sporting world as the last mainstay of cable TV finally looks to shift into the streaming world.
Personally, I view Apple’s MLS deal as offering plenty of bang for its buck. Why? Because of Lionel Messi’s landing in Inter Miami. By setting foot on North American soil, the soccer legend is drawing a world of viewers. And though MLS may not be as “hot” as the NFL in the U.S. market, there’s no denying the magnitude of growth the soccer league has enjoyed in recent years.
By riding on the incredible popularity of Messi, I guess you could say Apple has spotted value in the competitive sports streaming landscape. As other tech titans duke it out for rights to distribute, I think staying out of bidding wars and driving value from every partnership makes the most sense. Apart from the right to stream all the live MLS matches, Apple is also able to garner hype with a documentary series following in the footsteps of Messi and his journey to the World Cup.
Undoubtedly, the series isn’t just a must-see for soccer fanatics; it’s a potential onramp toward an annual MLS subscription. Indeed, one man can really make all the difference. As Messi puts the finishing touches on his career (perhaps with a MLS title for Inter Miami), the world will be watching. And Apple will be ready to rake in the cash flow. Should Netflix look to make a big splash in combat sports, it may wish to follow a similar roadmap to the iPhone maker by going above and beyond just streaming live sports.
A Boxing Push Could Give Netflix More Growth
Netflix may be taking a page out of Apple’s playbook with boxing by exploring opportunities in the sports streaming space that could offer a great return on investment. Undoubtedly, boxing has lost a bit of its luster to mixed martial arts (MMA) in recent decades. However, the rise of YouTube influencers like Jake Paul, lacing up the gloves to duke it out with others they have beef with, has been a major reason why boxing is making a bit of a comeback, so to speak, especially among younger audiences.
Dismiss Paul’s boxing abilities, if you will, but he’s done a great deal for the sport. And if his bout with Mike Tyson hits the spot, you can bet that Netflix may be in the running to host even more boxing events on its platform, perhaps striking deals with various boxing promotions. Personally, I think there’s an opportunity for Netflix to get bang for its buck in the realm of boxing.
In boxing, there isn’t any singular professional league to rule them all. Rather, the scene seems more fragmented, with numerous events across a number of promotions. If Netflix subscribers want more boxing, perhaps there may be an opportunity to make a few exclusive deals and consolidate promotions in the boxing world.
Though the financial details of the Paul vs. Tyson fight have not been disclosed, my bet is that it’s a massive sum. However, it’s one that may be more than worth paying as it looks to draw in massive crowds to their television sets this July.
Additionally, it may be a gauge of whether there’s potential to grow by streaming boxing or combat sports as a whole as the firm looks to supplement its impressive $5 billion World Wrestling Entertainment (WWE) deal with TKO Group Holdings (NASDAQ:TKO). Though vastly different sports, WWE and boxing make for an intriguing combo.
If Paul vs. Tyson ends up being the first of many Netflix-streamed bouts, the streamer may have cable television on the ropes.
Is NFLX Stock a Buy, According to Analysts?
On TipRanks, NFLX stock comes in as a Moderate Buy. Out of 41 analyst ratings, there are 27 Buys, 13 Holds, and one Sell recommendation. The average Netflix stock price target is $581.98, implying downside potential of 7.3%. Analyst price targets range from a low of $375.00 per share to a high of $700.00 per share.
The Bottom Line on Netflix and its Foray Into Sports
Only time will tell where Netflix goes after its historic Paul vs. Tyson mega-fight. In any case, I view the boxing scene as having the potential to pave the way for another sports-focused Netflix tier that I’m sure many folks would be more than willing to pay up for. This is especially true if it means putting an end to the pricy cable TV sports packages or the absurdly-priced pay-per-view (PPV) events in the world of combat sports.
Arguably, Paul vs. Tyson is the type of fight that I’m sure many would be more than willing to pay a great deal to watch.
