As WWE continues to negotiate and secure television deals, the market has been upended by an announcement from TKO and Netflix that the streamer has acquired the air rights to Monday Night Raw beginning in 2025. Raw had been a staple of Monday Night television for over three decades, though the seemingly abrupt move is indicative of an ever-evolving television market.
While Raw continues to perform well in the ratings box relative to the time, the viewership continually sees a stark decrease from its peak. Yet, the company makes more money than ever. As the market changes metrics change, and WWE’s strong online presence, booming revenue, and ahead-of-the-curve marketplace thinking have made them one of the hottest commodities in a streaming-dominant market.
What We Know About The Deal
CNBC reports that the deal WWE announced today with Netflix is set for ten years at a massive price tag of at least $5B. Furthermore, a public filing with the SEC from WWE’s parent stock, TKO, notes that Netflix has different options that could cut the deal to five years or expand it to 20. Whether the option is a vesting option based on performance or is at the discretion of Netflix remains to be seen, though WWE seems to have found a long-term home for its flagship program.
With this deal, WWE will still call NBCU’s Peacock service home in terms of its premium live events and content library domestically. However, Netflix will become the international provider of the WWE Network, beginning with Latin America, Canada, and the United Kingdom. This further solidifies the WWE Network from being its own entity as an entity that was likely operating in the red on its own.
As WWE comes set for Raw to leave the USA Network for the first time since its homecoming in late-2005, NXT will be joining it next year when it heads to the CW. SmackDown, however, will go to USA for the first time since its 2019 departure from the network. This will maintain WWE’s longstanding relationship with NBC’s traditional television networks that date back four decades.
Why This Makes Sense For Netflix and WWE
Heading into the year, I published an article on the streaming market for Distortion Media. To put it succinctly with further explanation in the previously mentioned article, studios are putting anywhere up to $20M per episode for its original programming. As budgets balloon, paying WWE per episode significantly less on average for 52 episodes of TV per year of high-quality, well-produced, live television gives Netflix a major market edge while saving them money.
The primary cable allure is live sports. As MAX, Peacock, Apple TV, and Paramount reach deals with different leagues, Netflix now joins the party in a major way at a cost-effective amount. Yet, for WWE, 2.5B over five years is more than they’d have received from any cable network, even if it comes as a surprise that they’re leaving television altogether with their main product. The odds that WWE had an offer on the table that was closer to $3B than it was $2B over a five year window from a television network is, well, to quote WWE Hall of Famer Gorilla Monsoon, ‘highly unlikely.’ The deal, from a fiscal perspective, makes sense for both Netflix and WWE.
Whether this changes how Netflix operates their subscription tiers and how this impacts how WWE runs television remains to be seen and will be for a couple of years, but for now, the deal is a market changer with a focus for the future of how consumers watch television. WWE’s Nick Khan will be on ESPN’s Pat McAfee Show at noon EST to discuss the deal.
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