Netflix-WWE deal is a big deal

I’m old enough to remember when the WWE was the WWF and the territory was from Maine to D.C. We’d watch weekly shows of squash matches with the WWF’s hope that we’d see the big matches at Madison Square Garden. The weekly shows were on a local independent station where WWF paid to air and received the ad revenue. The WWF’s money was in the house shows, whether it was the Madison Square Garden, Spectrum, or the Boston Garden.

In 2024, the WWE is a worldwide promotion, part of TKO, which includes UFC. Their flagship show will move from cable to Netflix in a 10-year, $5 billion deal. For the first time, Netflix will air live, consistent programming. This is a game-changer for so many reasons. While critics will claim that WWE will lose its audience, Netflix has as many subscribers as most cable channels like USA and ESPN. Netflix’s outlay also shows the possibility that they will become a huge player when it comes to sports rights of leagues like the NBA (which is open, soon). Cord cutting and the loss of carriage fees from cable companies will negatively impact channels like ESPN and TNT. There is a flush of cash from streaming channels such as Peacock shelling $110 million for an exclusive NFL playoff game, but Netflix is the only streaming service actually making money. The WWE Raw rights deals have their pitfalls, Netflix can exit the 10-year deal in the mid-term and the assumption is at close to $10 million a weekly episode, they’re going to run commercials in a 3-hour episode. It will also put pressure on Peacock, whose streaming deal with the WWE for $250 million a year for pay-per-views and archives ends in a year or two, and looks like a bargain. The biggest pitfall I see is that there is too much money spent on sports rights fees and the unlimited checkbooks for these rights, will end. That’s why I suspect WWE went to Netflix because it was unlikely any cable channel could offer the Raw rights increase that they promised shareholders.

It should be interesting how this all plays out.

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