Netflix was nearly an owner of a pro sports league, and it’s not backing down from the thought of buying other leagues — for the right price. 

The streaming giant was in discussions to purchase the World Surf League late last year, according to The Wall Street Journal, but those discussions fell apart when the sides couldn’t agree on a price tag. 

Netflix executives have reportedly also held discussions about buying other lower-profile sports leagues to dodge the high costs of rights.

• The company bid for U.S. Formula 1 streaming rights, but ESPN was awarded the deal.
• Netflix was in the running for streaming rights to the ATP tennis tour for countries including France and the U.K., but dropped out of the race.
• The company reportedly considered bidding for U.K. rights to the Women’s Tennis Association.

Netflix co-Chief Reed Hastings has said he doesn’t want to get caught in consistent bidding wars, and that’s reportedly partly why some executives are leaning toward buying leagues.

In April, Netflix co-CEO Ted Sarandos said the company would “have to see a path to growing a big revenue stream and a great profit stream with it” before it could add live sports.

Sports Streams

Netflix would join other major streamers diving into sports this year.

Apple signed a media rights deal with MLS for at least $2.5 billion and a deal with MLB for “Friday Night Baseball.” Amazon began its $11 billion NFL deal for “Thursday Night Football.”

Disney continues to build toward profitability, with ESPN+ acting as a stabilizing force.

The media giant brought in $20.15 billion in revenue for the fiscal fourth quarter ending Oct. 1, a 9% increase from the same period last year.

• ESPN+ led among the companies streaming services with 42% year-over-year subscriber growth, reaching 24.3 million as of Oct. 1.
• ESPN+’s subscriber growth helped offset lower income from a drop in pay-per-view buys on UFC events.
• Disney+ grew 39% to hit 164.2 million.

Fiscal year revenue showed substantial recovery from the pandemic: Disney banked $82.72 billion, a 23% increase from the previous year.

While streaming growth was better than expected, the company missed revenue expectations in both its parks and media segments. Disney’s stock was down around 6.4% in early after-market trading.

Gaining Stream

Total streaming revenue rose 8% to $4.9 billion, but the segment’s operating loss nearly doubled to $1.5 billion. 

“The increase in operating loss was due to a higher loss at Disney+ and a decrease in results at Hulu, partially offset by improved results at ESPN+,” the company wrote.

CEO Bob Chapek said he expects “DTC operating losses to narrow going forward and that Disney+ will still achieve profitability in fiscal 2024.”

The company has been enjoying its return to NHL broadcasting, banking $90 million in ad sales for the 2022-23 season, sources told Front Office Sports.

Disney could rake in more than $700 million in college football ads on ESPN and ABC.

The Chicago Bears have a ways to go before moving to Arlington Heights but they completed an important step in the process.

On Monday, Arlington Heights trustees unanimously approved a pre-development agreement regarding the team’s plan to build a $5 billion stadium and mixed-use area on the Arlington International Racecourse site.

• The agreement does not commit the village or team to a particular project or funding arrangement, but does lay out a series of steps. Arlington Heights mayor Tom Hayes has said that the Bears ending up there is not a foregone conclusion.
• The Bears agreed to buy the 326-acre property last year for $197.2 million.
• The team’s lease at Soldier Field extends through 2033, and the Bears would have to pay Chicago $84 million if they broke it in 2026, with decreasing penalties thereafter.

The city of Chicago has been looking into investments such as adding a roof to Soldier Field in the hopes of keeping the Bears at their home since 1971.

Taxing Question

Bears owner Ted McCaskey has said the team will need public assistance to build the project.

The team has said it will not ask for government money to build the stadium itself, but will likely seek to recover tax revenue related to the project. Under one proposal, the team would collect property tax revenue over a certain set level for a specified area and length of time.

Arlington Heights leadership rejected a proposal by a libertarian group to block public funds from going to new businesses.

Nintendo slashed its full-year sales forecast for its best-selling home gaming console ever following the release of its latest earnings report.

The Japanese video game giant reported $4.5 billion in sales for the six months ending Sept. 30, a 5% increase year-over-year. Its ordinary profit reached $2.2 billion during the period, compared to $1.6 billion for the six months ending Sept. 30, 2021. Despite the growth in revenue and profit, Nintendo has been hampered by the ongoing chip shortage plaguing the tech industry. 

• Switch sales reached 6.68 million units during the period, down 19% year-over-year.
• Full-year sales are projected hit 19 million units by the end of March 2023.
• Switch sales were previously projected to reach 21 million units during the same span. 

Nintendo has seen its Switch output improve since September and is “continually working to front-load production” to prepare for the holiday season.

As of Sept. 30, Nintendo has sold 114.3 million units of the Switch since its 2017 release. 

New Faces 

The Public Investment Fund — Saudi Arabia’s sovereign wealth fund — acquired a 5% stake in Nintendo in May for $3 billion, making the fund Nintendo’s fifth largest shareholder.

On Tuesday, Nintendo announced a joint venture with mobile gaming company and “Animal Crossing” co-developer DeNA.

The venture will establish a new company — Nintendo Systems Co., Ltd. — that will launch in April 2023 and work to “strengthen the digitalization of Nintendo’s business.”