The UFC and WWE may be joining forces to create a $21.4 billion sports-entertainment colossus, but both sides in the near term will continue to hash out their own standalone linear-TV rights deals. That said, conditions favor a scenario in which the mixed martial arts brand and its 70-year-old pro-wrestling counterpart conspire to forge a joint streaming deal.
WWE’s TV deals with NBCUniversal’s USA Network and the Fox broadcast network expire in October 2024, but the networks’ right-of-first-refusal window is now open. Endeavor CEO Ari Emanuel earlier today said talks between the WWE and NBCU/Fox have yet to begin, although the latter partner has expressed eagerness to renew its deal.
Speaking last month at the Morgan Stanley Technology, Media & Telecom Conference, Fox Corp. CEO Lachlan Murdoch confirmed that his team was “ready to engage with [the WWE] when they ask and they’re ready,” before adding that Fox’s “appetite for renewal depends on what happens with the rest of our sports portfolio.”
It’s little surprise that the legacy TV partners seem eager to re-up with the WWE, given the state of the Raw and SmackDown ratings. Season-to-date, both shows are up significantly in the dollar demo—this despite a 16% TV-wide decline in the number of adults 18-49 sitting down in front of the set every night.
As Emanuel said during a morning hit with CNBC’s Scott Wapner, while the WWE’s ratings are thriving in the face of the wholesale erosion of the traditional TV audience, “the rate card is way below market, [and] by a significant amount.”
Media buyers support that assessment, noting that the average cost of a 30-second unit in SmackDown worked out to just under $50,000 a pop during last year’s upfront market, making it about 30% cheaper than the rest of the Friday night broadcast lineup.
Given the average unit cost and assuming a standard ad load across SmackDown’s 104 hours of annual airtime, the show’s revenue haul is somewhere between $40 million and $60 million shy of the $205 million Fox pays each year in rights fees. And the cost of those rights is expected to soar in the next round of negotiations; during an investor conference this morning, Endeavor president Mark Shapiro said that maximizing the value of the WWE/UFC media package will be the primary means through which the company fast tracks future growth.
Or as Emanuel said of the WWE today on CNBC: “Content’s king. There’s linear players, there’s cable players, there’s SVOD players—everybody wants the young demographic, the social. I think they’re gonna get a proper price.”
While the media renewals get underway, Endeavor also will create more content for both entities, an effort that will include ramping up the number of live events and beefing up sponsorship and licensing opportunities. Shapiro said Endeavor is also looking at exploring “unique direct-to-consumer, go-to-market possibilities.”
In the meantime, UFC’s $1.5 billion deal with Disney/ESPN, which includes an exclusive streaming pay-per-view pact with ESPN+, isn’t set to expire until 2025. As such, the two brands will forge their own separate TV paths, at least for this one last time. (At an RBC Capital Markets confab last fall, Shapiro hinted that Endeavor would be “open to a renewal conversation sooner rather than later,” but Disney thus far hasn’t demonstrated an inclination to accelerate the process.)
WWE’s streaming deal with NBCU’s Peacock service expires in 2026. WWE president Nick Khan is said to be pleased with how his product has fared on the direct-to-consumer platform, and he appears to be equally enthused with the state of the linear-TV partnerships. If Khan or anyone on the Endeavor team can book some early meetings with Peacock and ESPN+, it’s possible that a new UFC/WWE streaming deal may be worked out to the satisfaction of all parties well before the clock runs out on the legacy contracts.
