21st Century Fox (FOXA) has agreed to a 5-year deal worth more than $1 billion for exclusive broadcast rights to WWE’s SmackDown Live show. Effective October 2019, the 6th highest rated original show on cable television will move from USA Network to FOX’s over-the-air TV network. FOXA plans to move the Tuesday night staple to Friday evenings and will continue to broadcast the 2-hour show live. WWE reportedly chose the FOXA bid despite a larger offer, as “new Fox” committed to promoting the show during tentpole sports broadcasts (think: NFL on Sun, NFL on Thurs, MLB, CFB). NBCUniversal, the show’s current rights holder, declined their right to first refusal to negotiate a new contract after deciding to retain WWE Monday Night RAW with a deal worth $240 million annually; that show will continue to air on USA Network. Combined the new deals are worth +/- $445 million annually, a +/- 145% increase on the $180 million/year that the company currently brings in for the 2 prime-time shows.
Howie Long-Short: We noted in yesterday’s newsletter that Fox was among the favorites to land the WWE franchise and should it do so, was likely to air SmackDown Live on its Big 4 network; so, we weren’t exactly shocked by Monday’s news. The deal’s total value had us doing a double-take though, as earlier reports pegged the show’s value at +/-$110 million/year (up from $30 million/year on deal signed in 2010). WWE shares rose again on Monday, closing +12.5% (at $57.86); the stock is up 33% since last Wednesday’s close (RAW deal broke Thurs.) and a whopping 192% over the last 12 months (from $19.80).
The next shoe to drop is likely to be UFC’s linear cable broadcast package, with 20+ live events. FOXA currently pays $165 million annually for exclusive broadcast rights, but that deal expires in December. While earlier reports indicated that FOXA would let the UFC walk if it successfully acquired WWE rights, it now appears as though the company wants to retain the rights and is willing pay an extra $10 million/year ($175 million) to do so. Of course, it’s no guarantee that will be enough, as industry experts have been expecting the UFC’s deal to fetch $200 million+.
Fan Marino: There is the possibility (if not high probability) that SmackDown Live will outdraw RAW during the deal’s duration. While RAW currently draws 3 million viewers (compared to SmackDown Live’s 2.59 million), SmackDown Live’s pending move to FOX will put the show in 30 million additional homes on a night with far less competition in terms of programming.
For those who don’t follow the WWE, SmackDown Live was historically an inferior product to RAW (even taped at one point). However, a 2016 draft split the company’s talent roster, requiring fans to watch both shows to see all their favorite superstars. Should SmackDown Live begin to outdraw RAW (as we expect), look for some of the promotion’s biggest names (think: Roman Reigns, Ronda Rousey) to join Miz and AJ Styles on the SmackDown Live roster; the WWE will want the opportunity to put forward its best product on its biggest stage (i.e. broadcast television).
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