Earlier today, WWE and NBC/Universal announced a new multi-year
deal for RAW and SmackDown to continue airing on USA Network and SyFy. The press
release did not note the length of the contract, the terms of the deal or
whether SmackDown will stay on Fridays or go live. It is worth mentioning that
SmackDown is referred to as “Friday Night Smackdown” although that is the full
name of the show on SyFy, so it doesn’t preclude the possibility of it going
live.
The agreement also notes that Total Divas will continue to air on
E!, which isn’t a surprise.
Vince McMahon said of the deal, “We are proud to continue
our long-standing partnership with NBC/Universal given their premiere position
in the marketplace and vast promotional platforms. We are excited about our
future as we further the reach and popularity of our live, family-friendly
entertainment programming 52 weeks a year.”
The press release was light on details and doesn’t answer whether
RAW and SmackDown will get earlier debuts on the WWE Network, which was one of
the last sticking points in negotiations.
More information will surely filter out, but as of now WWE is
officially set to continue on their current networks for the next several
years.
With that being said, WWE’s stock PLUNGED
following the announcement of their deal with NBC/Universal. The stock closed at
$19.93, which was up 3%, but was down $4.24 (down a HUGE 21%)
in after-hours trading. The reason for this is the announcement that the new
deal will be for $200 million, which is contrary to Vince McMahon’s statement on
last year’s earnings call that they expected to at least double the value of
their TV deal. Last year’s numbers were about $160 million.
You can see the full financial details in a press release here. The company is using a bit
of wordsmithing (which may be perfectly reasonable) in the release, noting that
the $200 million number is “representing an increase of more than $90
million, that is nearly three times the increase achieved in the previous round
of negotiations.”
The release also notes that there are about 77 million broadband
homes between the US and certain international markets that “have an affinity”
for WWE content and that based on the percentage of homes who have signed up for
the WWE Network, they should have between 2.5 million and 3.8 million
subscribers. They estimate that 1.3 million to 1.4 million subscribes will be
required for the network to offset the “complete cannibalization of the
company’s Pay-Per-View and SVOD businesses” as it would generate about $40
million, on par with the company’s Pay-Per-View and SVOD businesses in 2012.
