There has been much speculation that WWE could move to a new network or, at least, start a bidding war to get the most profitable deal. Its current agreement with NBC Universal expires in 2019, however, WWE has declared that they are seeking to finalize a new television agreement this year. At this time, FOX seems to be one of the best options if WWE decides to leave USA Network with Raw on FOX and SmackDown Live moving to FS1.
For WWE, two key selling points of this bidding war are TV rights ratings and agreements.
” The company’s negotiating position with the upcoming television rights agreements remains solid and should provide the biggest catalyst of the year,” reads a recent report by equity research firm MKM Partners.
” The value of television rights for Raw and Smackdown in the US. The United Kingdom, India, and the next four major markets are approximately $ 213mn for 2017 which represents almost 80% of the revenues of the WWE television segment for the year, “added MKM. “By 2019, the value of these seven contracts should amount to $ 250mn. In 2020, the first full year of the new contracts anticipate an increase in the value of at least 25% to $ 312mn of these transactions and then increase to 10% average annual rate until 2024. ”
The personal financial investment and advisory news site Barron’s Next illustrated a table of WWE ratings compared to other networks as well as its viewer hourly rates created by Guggenheim analysts.
As shown, WWE has a higher average hourly rating for Raw and SmackDown Live than other sports shows such as MLB on Broadcast, NBA on TNT, NHL on NBC / SN and UFC (its main card).
It is said that WWE and UFC are negotiating with FOX. UFC currently has a $ 200 million deal. however, Deadline recently noted that 2017 showed a big decrease in interest in the world’s largest MMA promotion since average UFC users fell 22% on FOX and an 18% in FS1. Deadline added that one important reason why the interest has diminished is that big projects like Brock Lesnar, Conor McGregor or Ronda Rousey are now hired with WWE or are struggling in other companies like McGregor exploring the world of boxing when competing against Floyd. Mayweather last August.
WWE also has a significant advantage over those other sports when it comes to hourly rates of viewer fees.
Along with sharing these two graphs Guggenheim analysts also commented on how WWE undervaluation compares to other major sports broadcasts.
“Our estimate for the new domestic contract would still be significantly lower than the rate of all other professional sports contracts based on the time of the viewer,” the analysts said. “While we do not expect the WWE to completely close the audience monetization gap with professional sports. we do believe that our estimate of contract duplication is not irrational, given the degree to which it is currently underestimated.”