One of our 2024 media and advertising predictions (client-only access) that got left on the “cutting room floor” last August was: Netflix will announce a major live sports deal. Yes, now I wish we had published that one, because it would have come true. Today, in advance of its Q4 2023 earnings release, Netflix announced a 10-year, $5 billion exclusive deal to stream WWE’s “Raw” starting next January — an about-face for Netflix, which had been steadily bearish on the ROI of live sports rights.

Netflix Signaled Its Move To Live Sports

Despite Netflix’s public stance, the tells were there. The company previously dipped its toe in the waters of live sports with its “Netflix Cup” event that aired last November. And in March, the streamer will air “The Netflix Slam” — a live tennis event featuring Rafael Nadal and Carlos Alcaraz. It was just a matter of time before the company blew open the doors on a major partnership. The WWE + Netflix deal is big. Live sports (and live news) marks the final foothold of cable TV.

It’s All About Advertising — And It’s All Connected

Ironically, Netflix’s flip flop on live sports mirrors that of its stance on advertising. Now the company’s all in on both — and for good reason: Live sports brings in viewers and ad revenue as Netflix doubles down on wooing big brands to instead spend their “TV” budgets on Netflix’s growing addressable audience. A major sports franchise allows Netflix to offer big-ticket custom sponsorships, something that Amazon recently touted, attributing its 26% growth in ad sales, in part, to “Thursday Night Football” on Prime Video.

Not So Fast: Many Gen Zers Pass On Sports

While there’s no doubt that Netflix will benefit from its WWE deal, it (by itself) isn’t a future-proofing strategy. Live sports doesn’t lure Gen Zers en masse. According to Forrester’s 2023 data, fewer than one in five of US online Gen Z adults (19%) “typically watch” live broadcasts (news, sports, or special events). Gen Z respondents are least likely among all generations to report watching live sports. This holds for most mainstream sports, except for the NBA, although WWE wasn’t a part of our survey. But unlike other franchises, WWE is first and foremost an entertainment product that emulates sports — something that garners more universal appeal. This makes it “on brand” for Netflix, which (at the end of the day) is an entertainment company.

For more data on streaming behavior, check out our report, Data Overview: Streaming Service User Behavior, 2023. Forrester clients: Let’s chat more about this via a Forrester guidance session.