US Markets
Tuesday, January 23rd, 2024 6:26 pm EDT
Key Points
Netflix Secures 10-Year Deal to Air WWE’s “Raw”:
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- Netflix and TKO Group Holdings announced a landmark 10-year deal, valued at over $5 billion, for Netflix to broadcast WWE’s flagship program “Raw” starting next year. This marks Netflix’s significant entry into live sports streaming.
- The deal grants Netflix the option to exit after five years or extend it for another decade. Initially, the streaming platform will have exclusive rights to stream “Raw” in the U.S., Canada, U.K., and Latin America. It will also become the global home for all WWE shows and specials outside the U.S., including “SmackDown,” “NXT,” “WrestleMania,” “SummerSlam,” and “Royal Rumble.”
Market Response and Strategic Significance:
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- Following the announcement, TKO shares surged over 20%, boosted further by the news that actor and former wrestling superstar Dwayne Johnson would join its board of directors. Netflix shares saw a modest increase before reporting earnings.
- TKO President and COO Mark Shapiro emphasized the strategic importance of the deal, calling it a “super game changer” and likening it to historic shifts in sports media, such as ESPN bringing NFL to cable in 1987 and Rupert Murdoch introducing football to Fox in 1994. The agreement positions Netflix as a major player in live sports content delivery.
Netflix’s Move into Live Sports and WWE’s Strategic Decision:
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- Netflix, aiming to drive revenue by reducing subscription sharing and promoting its ad-tier membership, has made limited attempts at live programming. The addition of “Raw,” a three-hour live program airing year-round on USA Network, represents a significant historical shift for Netflix.
- TKO, the parent company of WWE, strategically chose Netflix over other media companies for its global footprint, surpassing other streaming services. WWE President Nick Khan had Netflix on his radar for several years, noting the streamer’s openness to changing stances, such as rejecting advertising and cracking down on password sharing. The deal opens opportunities for Netflix to tap into WWE intellectual property for future projects, including movies or series around WWE characters.
Netflix and TKO Group Holdings have announced a groundbreaking 10-year deal, valued at over $5 billion, for Netflix to air WWE’s flagship program “Raw” starting next year. This marks Netflix’s first major venture into live sports, and the streaming platform will have the option to exit the deal after five years and extend it for another decade. The exclusive rights to stream “Raw” will begin in the U.S., Canada, U.K., and Latin America, with global streaming rights later. In addition to “Raw,” Netflix will become the global home for all WWE shows and specials outside the U.S., including “SmackDown,” “NXT,” “WrestleMania,” “SummerSlam,” and “Royal Rumble.” TKO Group Holdings saw a spike of over 20% in its shares following the announcement. Actor and former wrestling superstar Dwayne Johnson joining TKO’s board of directors further contributed to the positive market response. Netflix shares rose slightly before reporting earnings. The deal represents a significant shift for Netflix, which has made few attempts at live programming historically. TKO President Mark Shapiro described the agreement as a “super game changer” and a historic chapter starter in sports media history. Netflix’s global reach and marketing capabilities were key factors in TKO’s decision to choose the streaming giant over other media companies. WWE President Nick Khan had Netflix on his radar for several years, citing the streamer’s flexibility and willingness to change long-held stances. Netflix’s global footprint, unparalleled marketing, and positioning were instrumental in sealing the deal. “Raw” is a top-rated program on the USA cable network, drawing 17.5 million unique viewers annually. Netflix’s previous forays into sports include documentary-type series, and this deal opens opportunities for leveraging WWE intellectual property for future projects, including movies or series. The move aligns with Netflix’s efforts to drive revenue through subscription management and ad-tier memberships. Matches will be scripted around commercial breaks to cater to ad-free subscribers. TKO remains confident in Netflix’s technological capabilities, citing successful streaming experiences by other platforms with live sports content. The deal signifies a significant shift in the streaming landscape, positioning Netflix as a major player in live sports content delivery.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/23/netflix-to-stream-wwes-raw-starting-next-year.html
