Netflix-WWE $5 Billion Deal Cools ‘Rights Bubble’ Fears
Nearly 31 years to the day after debuting on USA Network, WWE’s Raw juggernaut is ditching pay-TV for Netflix in a deal valued at $5 billion. On an annualized basis, the 10-year pact between the three-hour wrestling production and the streaming giant effectively doubles the $250 million fee NBCUniversal pays for the rights to Raw under its legacy contract.
The deal kicks in as of January 2025, and marks Netflix’s biggest investment to date in sports—or, given the scripted nature of WWE—sports-related content. Netflix will preserve the 180-minute Monday night format, which has been a mainstay of the cable outlet’s programming lineup since it returned to USA in 2005, following a five-year stint at TNN/Spike TV.
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Always USA’s top draw among the key adults 18-49 demo, Raw has also been the network’s most-watched series since it began transitioning out of the scripted-drama space in 2016. The last 10 installments of the show averaged 1.55 million viewers on USA, which reaches 71.1 million U.S. TV households, making it WWE’s second-biggest weekly draw behind Fox’s SmackDown.
As of its latest quarterly filing with the Securities and Exchange Commission, Netflix boasts 247.2 million global subscribers, of whom 77.3 million are based in the U.S. and Canada. As part of the deal, Netflix will serve as the exclusive home to Raw throughout the Western hemisphere and the U.K., with other overseas regions expected to be added to its lineup over the course of the agreement.
The deal comes in the wake of NBCU’s move to take SmackDown off Fox’s hands in a five-year, $1.4 billion pact that kicks in this October. SmackDown’s return to USA coincides with the formal conclusion of the network’s contract with Raw, which creates a three-month gap in which the former will have no official distribution partner. Details as to how SmackDown will bridge that gap are still to be determined.
The lag between the signing of the new Raw deal and the start of its Netflix run gives the streamer nearly two years in which to prepare for the technical challenges of staging a live weekly wrestling showcase. As a digital multiplexer, Netflix has delivered billions of hours of canned programming to its global end-users, but as was evidenced by the grounding of one of its first attempts at livestreaming last spring—after a 75-minute delay, the service was forced to scrap a Love Is Blind reunion special before it ever got off the ground—there’s a world of difference between the on-demand model and broadcasting live events at scale.
A month before the Love Is Blind stream failed, Netflix tried its hand at its very first livestream with a Chris Rock standup special. Since then, the service has streamed the Netflix Cup, a niche offering featuring drivers from its original series Formula 1: Drive to Survive squaring off on the links against the stars of its golf doc strip, Full Swing. Netflix has not disclosed the audience figures for the 18-hole golf outing.
Next up for the streamer is the Netflix Slam, a live tennis match pairing off Rafael Nadal and Carlos Alcaraz. The event is set to take place on March 3. During the company’s October earnings call, Netflix Co-CEO Ted Sarandos qualified its investment in sports, saying, “We are in the sports business, but we’re in the part of the sports business that we bring the most value to, which is the drama of sport.” Sarandos went on to tell investors that the recent spate of sports-related offerings did not signal a “core change” to Netflix’s programming strategy.
While Netflix’s big leap into the ring doesn’t necessarily suggest that the company is about to make a serious run at any top-tier traditional sports packages, the deal should put to rest at least some of the speculation about whether or not the rights bubble has burst. Traditional TV outlets may be cutting back on their programming budgets, but given the demonstrated willingness of tech biggies like Amazon, Apple and YouTube to get in on the livestreaming action, the leagues that can drum up millions of fans at the drop of a hat are now flush with distribution options.
Shares of TKO Group Holdings this morning were trading up 18.4% at $91.71 shortly after the deal was announced. TKO stock debuted at $102 a share in September 2023, when WWE merged with UFC owner Endeavor under the new banner.
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