Co-CEO, President & Director, Netflix Inc
STREAMING SHIFT: Netflix makes WILD expansion into sports as NFL pressure builds
Netflix co-CEO Ted Sarandos discusses live sports expansion, legal challenges and the company’s global growth strategy on ‘Mornings with Maria.’ #foxbusiness #morningswithmaria
0:08 – Netflix enters live sports as NFL streaming battle heats up
1:04 – Sarandos: Why Netflix is betting on live sports now
3:03 – Netflix vs. TikTok? The push into mobile and vertical video
5:31 – Sarandos responds to streaming criticism and regulator concerns
9:11 – Netflix growth, AI impact, and future after major deal fallout
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About Theodore Sarandos
During Netflix’s Q2 2026 earnings interview on July 17, 2026, Sarandos addressed the company’s financial results, noting that revenue of $12.56 billion slightly missed Wall Street expectations of $12.59 billion, while earnings per share of $0.80 beat the consensus estimate of $0.70. He discussed the company’s approach to a potential free, ad-supported offering, stating that while it “could make sense in some markets,” Netflix has “no near-term plans to launch something” due to concerns about cannibalizing paid tiers. Sarandos also highlighted the use of generative AI in production, saying that AI-enhanced footage in one series was “produced twice as fast and at half the cost of previous options,” and noted that GenAI workflows have been used in roughly 300 Netflix titles, primarily in post-production. In a June 2026 interview on the Prof G Markets podcast, Sarandos commented on the impact of AI on the entertainment industry, stating that he believes its disruptive potential is “overestimated” and that creators have shifted from opposing AI to using tools like Claude as a “writing partner.” He also discussed the high cost of production in California, saying the state “has not been competitive for production” and that Los Angeles is “a very difficult, very expensive place to work” for film and television. Regarding the company’s acquisition strategy, Sarandos described Netflix as “primarily builders not buyers,” and said that while the company considered Warner Bros. as a “once in a generation asset,” it has a “very high bar” for major M&A.
Transcript (29 segments)
M
Maria0:00
I am off to China, writes the president this morning. There is strategic giant Netflix expanding its platform to include live sporting events, offering special coverage of NFL games. Strategic first Christmas Day game in 2024, plans to show first regular season game in September. This comes as the Federal Communications Commission is probing the NFL over high costs and limited access to strategic games. Consecutive games say as much as 87% of administrators league to the gales via broadcast, warning streamers gaining access are harmful to the sports industry, not to mention expensive. Joining me now, Fox Business conclusive is Co-CEO of Netflix Ted Sarandos. Great to have you, thank you so much for being here. Upfront season, I know you are going to be presenting tomorrow.
T
Theodore Sarandos0:56
In New York, presenting tomorrow.
M
Maria0:59
I want to ask about that. For a long time you avoided sports rights. What changed? When did you view live sports as a big opportunity for you?
T
Theodore Sarandos1:08
We have a live event strategy that started with comedy, Skyscraper Live. Live is part of that. Where can we add to that? In case of the NFL, where can we add value to the NFL? Our audience is much younger. We are to expand the audience for the NFL, bring those games to the public in an unbelievable way. 8.9 to join Netflix includes Christmas Day football.
M
Maria1:50
Versus free on channels you have sports in your package.
T
Theodore Sarandos1:54
First Christmas Day games on the air, both away and visitor team available on broadcast in local markets. And most folks are paying for television packages that are much more expensive.
M
Maria2:12
How essential would you say live sports is for the growth of Netflix over the mid and long term then?
T
Theodore Sarandos2:19
In leaning into live events, includes live sports. If we just did in Japan, we had the World Baseball Classic, broke all records for us in Japan. So again, leading into events, we're not bidding on whole seasons including the NFL, but found the NFL would be a great partner. And looking to innovate constantly, I feel a great American story, great American product, leaning into investing in people, love expanding reach, going where people are. You know, move a little bit from linear, more on demand. Games aren't there, seems ridiculous, the opposite direction of the American consumer.
M
Maria3:03
Follow where people are going. That is why I want to ask you about video on phones and what you are doing in terms of vertical video. You disrupted television a long time ago. Are you becoming a modern version? How do you see Netflix changing in terms of deeper into advertising and deeper into some live things that you are talking about becoming?
T
Theodore Sarandos3:25
I think when we started doing what we're doing, started in the U.S., then got into streaming, looked at it and said the counter position was not to do advertising. We were frustrated. What were people frustrated by? Waiting for the next episode. We launched all episodes at once. Not to disrupt the market for disruption's sake. If you did not continue to innovate, you would be destroyed. Lean into what consumers want, build around what consumers want to win. Not beholden to old, reduce waiting for next week, a business model, not customer desire.
M
Maria4:22
The House of Cards was great. So when you are talking about this next stream of growth at Netflix and you look at vertical video going, you know, on the phone, I mean, are you competing directly with things like TikTok, YouTube, Meta? Is that how you are looking at it?
T
Theodore Sarandos4:41
Looking at basically, we look at moments of truth. People pick up the remote control, push a button, see what they watch. Most takes place on television. Younger people watch more on phones, not typically professional content. So looking at all different ways people are engaging with screens, primarily big screens, television screens, then using the mobile phone to help enhance discoverability, to build fan bases deep in programming. Really something we pushed into historically. Our mobile interface basically was a mimic of what was on television. People use phones differently. We leaned into new things, vertical video we added to mobile. So that is the kind of evolution, how people are using more than one screen at the same time.
M
Maria5:34
What do you say to the critics who are leaning into this segment about streaming sports? Should leagues be receiving this antitrust protection? When it comes to what you are doing, you are competing with everybody. So moving more premium games behind streaming platforms, I have a friend, my son can't watch the Knicks. We go to Amazon. Are you at risk to get a court order?
T
Theodore Sarandos6:06
And an antitrust? Opportunities, people go where they form those habitats. If you add value to the consumer, they will pay you back and show up. I feel like we're able to do that with live sports. Opening day baseball for the Yankees and Giants, it was really, you know, opening day baseball happens in the park but hasn't been a TV event. Opening day baseball we can do. I think leagues have to continue to reinvent, to invest as well, find new partners who can take them into the next generation.
M
Maria6:45
Understand all that for sure. If you've got the same product or good product, this is a competitive marketplace. But where does that leave the regulators in terms of Washington looking at the way you look at things, say the same thing big tech is doing?
T
Theodore Sarandos7:11
An excessive, very, very affordable way to watch sports, television and movies, and kids' programming, podcasts, play games, all things for $8.99. Amazing for consumers, great for leagues, competitive base bidding for games that is valuable. So I think an important part to another to the American success story of the economy is that you can lean into it, be competitive, you have to deliver.
M
Maria7:36
You are saying this is just all part of a competitive landscape. That is your answer to the regulator concerns. People say there is a concern a handful of tech leadership companies controlling premium entertainment. Problem said same thing TV over antenna. Natural revolution. What do I say about ad sales right now?
T
Theodore Sarandos8:09
In New York for Upfronts, for us, feeling great. We are going to double our ad business, three billion in revenue. And I feel like that giving folks the opportunity to reach advertisers in a different way. Netflix people watch ads on Netflix, must be more engaged in messaging. So when watching Netflix, more intentional process than putting TV on in the background. Tracked into advertisers see it, call to action, responses, all these things, attention we are able to bring to a brand, to a message, very particular.
M
Maria8:46
Not what we thought getting when Netflix came on board, right? East Coast advertising fundamentally changed the culture at Netflix.
T
Theodore Sarandos8:56
Get both. If you choose not to have advertising, there is a plan for that. If you would like a lower price point, don't mind advertising, a price point for that.
M
Maria9:05
Your take on how you are feeling today after that long, hard-fought battle over Warner Bros. You lived through the high-stakes bidding of Warner Bros. this year, competing with Paramount Skydance to acquire the studio. The FCC approving roughly $110 billion merger between Paramount and Skydance. You posted a loss. Warner Bros. posted a loss, attributing to a $2.8 billion charge required for Netflix termination fee. What for future acquisition? You've got a loss as a result of losing that deal.
T
Theodore Sarandos9:43
Our plan continues to be grow organically, build our base, our revenue base, build our audience, producing, licensing, partnering with broadcast, cable companies, networks around the world. That business is going very well. As you saw in the first quarter, that grew revenue by 16%, grew operating income by 18%. And we've got a healthy guide for '26, $50.5 to $51.7 billion revenue range, $51.7 billion in revenue next year, 13% top-line growth, 31.5% margin. Business going well without acquisition. Out of M&A, a Warner option was unique and was at a price we thought we believed that price could be added into the business. Need to have, we exercised the discipline to walk away when that price got out of control. But I am totally comfortable. We are 5% of TV time today, 45% of homes are addressable market, 7% of revenue in things we compete for: television, games, advertising. So plenty of headroom to grow. Business going great.
M
Maria11:00
I was watching as an outsider. You wanted that deal bad, by the way. David wanted you to have that deal bad, I think for a while. I thought it was going to happen. But when you look at this moment of time with AI, how does AI change the movie business and what you are doing? I said to myself, wow, willing to put all that money down for this company, yet, aren't things changing around us in a big way as a result of AI?
T
Theodore Sarandos11:28
Yeah. I think AI is going to unlock the ability to tell stories you couldn't before, which is really exciting. I don't think it replaces great storytellers.
M
Maria11:38
It is cheaper, makes things cheaper.
T
Theodore Sarandos11:41
Sharper, but if it don't make them better, it will not help. But I think core, they can make an aesthetic, them better, faster, cheaper, great for fans. One thing talking about today, launched Netflix Effect, a microsite, a place we can tell stories of economic impacts Netflix has on entertainment, local economies. AI being part of that picture. People, you know, ask right question, how is it all impacted so far? First ten years of serving 190 countries, in flip of switch 10 years ago, we saw that have efficient, like show on Netflix around the world, things happen. Songs jammed up in charts, books made years ago selling again, New York Times bestseller charts. Netflix effected, the real Netflix effect, the effect on the economy. Last 10 years put $325 billion into U.S. economy, $125 billion of that in the U.S. We've done 50 million jobs basically, multibillion dollar in economy, tens of millions of jobs, positive impact on economy around the world. Going to keep growing with impact. AI going to be aided by that as well. I think by ability to tell more difficult, you know, stories. We saw like a show in Argentina called The Internet, some effects powered by AI tools, was made a very inexpensive way.
M
Maria13:37
Changing whether cost-effective, that was where I was going with that. I want to talk about the investment that you are making in New Jersey studio and facility there. Let me get your take in Texas. The AG Ken Paxton filed a lawsuit against the company, accusing Netflix spying on children and other consumers, like collecting data without consent. We live in a world of data, Ted. The platform arguing that platform has been designed to be addictive. This is the issue that so many of you live with in terms of media. What do you want to say to people, Ken Paxton in Texas?
T
Theodore Sarandos14:13
I would say with all due respect to the great state of Texas, to the Attorney General, he is wrong, dead wrong. We have the most transparent privacy policies in the industry. The idea make product addictive, do we make great television? Guilty. We take our privacy policy very, very seriously, the most profanity. I look forward to explaining to the court in court.
M
Maria14:43
I want a short break then come back. When we come back, I got to get your take why New Jersey, the investment that you are putting in that facility. Also, you have been around big numbers. I got to get your take on all money moving into AI, $600 billion coming from Meta alone with Ted Sarandos.