In a groundbreaking move, TKO Group Holdings, the newly merged entity of UFC and WWE, has sealed its maiden major broadcast rights agreement following its recent public debut.
On Thursday, TKO made waves by revealing that WWE Smackdown would be making a switch from FOX to the USA Network, a part of the NBCUniversal family, in a fresh five-year deal set to commence in October 2024. This deal not only encompasses the broadcast rights for Smackdown but also includes the production of four prime-time specials annually, scheduled to air on the main NBC network.
This colossal five-year deal reportedly boasts an annual value of $287 million, accumulating to an impressive total exceeding $1.4 billion, according to CNBC reports.
The relocation of Smackdown also signals the end of an era for WWE’s flagship program, Monday Night Raw, which has enjoyed a long run on the USA Network. As reported by The Hollywood Reporter, TKO is actively exploring options for Raw and NXT, a developmental promotion also under WWE’s banner, in pursuit of a different broadcast rights agreement with a new network.
This announcement comes as no surprise after the official merger of WWE and UFC into TKO Group Holdings last September. Mark Shapiro, TKO and Endeavor President, had previously emphasized the importance of these broadcast rights agreements as they united both WWE and UFC under a single entity.
He stated, “Your goal is to maximize price, let’s be clear about that… In any renegotiation that [WWE president] Nick Khan is doing in WWE, his goal is to maximize price. Our goal with UFC is to maximize price.”
Reports suggest that negotiations for WWE Raw and NXT are currently in full swing, with multiple interested parties, including linear television networks and potential streaming partners, in the mix. Once these deals are finalized, TKO will then shift its focus toward securing the UFC broadcast rights deal, currently held by ESPN through 2025. Typically, negotiations for broadcast rights deals begin approximately a year before the current contract expires, suggesting that TKO is poised to ink a UFC deal sometime in 2024.
ESPN had previously signed a lucrative multi-year deal to bring the UFC over from FOX, subsequently adding pay-per-view broadcasts as part of an extended contract. These UFC PPV events are now exclusively available through ESPN+, the network’s premium subscription streaming service.
Ari Emanuel, TKO and Endeavor CEO, expressed his appreciation for the relationship UFC has cultivated with ESPN. He also emphasized the company’s willingness to explore all options when it comes to a new broadcast rights agreement. Emanuel stated, “We have a great relationship with ESPN, love our relationship with them, and we have a year left until we can start our renewal… I think it’s going to be a positive outcome for both parties, but there’s a lot of buyers out there.”
It’s worth noting that ESPN is currently undergoing a period of uncertainty, with Disney, its parent company, actively seeking “strategic partners” to invest in the business. Disney CEO Bob Iger previously hinted at a potential shift away from linear TV, emphasizing a focus on “direct-to-consumer” models, likely through ESPN+.
The UFC’s presence on ESPN+ has been instrumental in the streaming service’s growth, with up to 25.2 million subscribers reported in the most recent fiscal disclosure in August.
Despite the exciting news of the new broadcast rights deal for WWE, TKO Group Holdings’ stock experienced a 12 percent drop on Thursday, trading at $88.76 in early trading. The stock had initially opened at $102 per share when TKO officially went public on September 12.
Frequently Asked Questions (FAQs) about Broadcast Rights
What is the significance of TKO Group Holdings’ broadcast rights deal for WWE?
TKO Group Holdings’ broadcast rights deal for WWE, particularly the move of WWE Smackdown to the USA Network, marks a significant milestone. It signifies the company’s ability to secure major broadcasting agreements after merging WWE and UFC into a single entity. This deal is valued at over $1.4 billion, underlining the immense financial scope of the agreement.
What changes can we expect for WWE programming due to this deal?
With this deal, WWE Smackdown will transition from FOX to the USA Network in October 2024. Additionally, WWE will produce four prime-time specials annually, which will be broadcast on the main NBC network. This shift in networks for Smackdown implies changes in the viewing landscape for WWE fans.
What about WWE’s flagship program, Monday Night Raw?
The move of Smackdown to the USA Network suggests that Monday Night Raw, WWE’s flagship program, will come to an end on the same network. TKO is actively exploring options for both Raw and NXT (a feeder promotion for WWE) under different broadcast rights deals with new networks.
Are negotiations for WWE Raw and NXT ongoing?
Yes, negotiations for the broadcast rights of WWE Raw and NXT are “extremely active” at the moment. Several interested parties, including linear television networks and potential streaming partners, are currently involved in discussions to secure these rights.
When can we expect TKO to focus on the UFC broadcast rights deal?
TKO’s priority at the moment is to finalize the deals for WWE Raw and NXT. Once these deals are locked down, TKO will shift its focus to the UFC broadcast rights deal. Negotiations for UFC broadcast rights typically start approximately one year before the current contract expires, so it’s likely that TKO will work on securing the UFC deal in 2024.
What is the current status of UFC’s broadcast rights?
The UFC’s broadcast rights are currently held by ESPN through 2025. While there is a positive relationship between the UFC and ESPN, TKO and Endeavor CEO Ari Emanuel has emphasized that they will explore all options when negotiating a new broadcast rights agreement for the UFC.
How has the UFC’s presence impacted ESPN?
The UFC’s presence on ESPN, particularly on ESPN+, has been instrumental in the growth of the streaming service. As of the most recent disclosure in August, ESPN+ had accumulated up to 25.2 million subscribers, showcasing the significant role the UFC plays in ESPN’s streaming success.
What’s the significance of the drop in TKO Group Holdings’ stock price?
Despite the positive news of securing the WWE broadcast rights deal, TKO Group Holdings’ stock experienced a 12 percent drop. This market reaction indicates that investors may have had different expectations or concerns about the company’s performance, possibly related to the broader dynamics of the sports and entertainment industry.