World Wrestling Entertainment held its annual top event SummerSlam in Las Vegas this month and is now looking to global operations to generate historic revenue.
With its US media rights secured, WWE is looking to close global deals for its WWE Network streaming service. Although the world’s largest wrestling company has dismantled the service in the US, it still serves as an international component. WWE wants to bet similar streaming rights deals like the one with CNBC parent company NBCUniversal that the weekly wrestling content and classic library will lure media companies around the world.
WWE has agreements with Fox Sports and NBCUniversal, including a $1 billion agreement to stream US content on NBCUniversal’s Peacock service. The company also has linear and streaming rights packages internationally with networks such as Virgin Media (Ireland), UK-based BT Sport and Sony India. In addition, WWE has signed a deal with sports streaming service DAZN to show events in Germany, Austria and Switzerland, along with a streaming deal in China with online platform iQIYI, which is owned by tech company Baidu.
The combined media deals helped WWE bring in $475.9 million of its $529.1 million in revenue for the first six months of 2021. Last year, WWE earned $868.2 million in media rights, excluding revenue from the Peacock- deal, which started in March. WWE is traded on the New York Stock Exchange and has a market capitalization of $3.6 billion. On Monday, shares of WWE opened at $52 a share, still lower than the 52-week high of $70.72 last June.
WWE said SummerSlam, a full-capacity event in Las Vegas, was the highest-grossing and most-watched event, with a “seven-figure” global viewership consumed primarily on Peacock and WWE Network. But the company did not disclose any details about the figures.
It’s not clear how much WWE would gain from other international deals, but new agreements to license its content won’t come close to the fees from NBCUniversal and Fox Sports. Fox also has a $1 billion deal with WWE, and the USA Network — also owned by NBCUniversal — has a TV rights-only deal.
Eric Handler, director of MKM Partners and senior research analyst, said WWE’s Day 2 rights with Hulu, which allow subscribers to watch Raw and Smackdown shows 24 hours after they air, will also be something to keep an eye on on the media rights market. Currently, Peacock viewers can watch the shows 30 days after the live broadcasts.
WWE uses the formula for operating income before depreciation and amortization in its earnings report to break down its finances. While media rights have been stable since 2017, there were noticeable revenue declines in advertising, sponsorship and consumer products.
Chief Financial Officer Kristina Salen told CNBC in April that WWE wants to add more sponsorship and grow its e-commence business. In addition, WWE is reportedly making up to $40 million per event in a 10-year deal with Saudi Arabia signed in 2018.
If WWE were to get more global media deals and push through its plan to increase sales, it could hit $1 billion in revenue, which would be the highest in the company’s history. In 2020, WWE generated $974.2 million in revenue, up from $801 million in 2017, largely due to media fees.
“They are very good content creators,” Handler told CNBC. “As the media world evolves, so does their business. They can sell their product to a number of media players around the world. So for them, it’s finding more ways to monetize the content.”
Will a struggling start-up pose a threat to WWE?
WWE invited CNBC to watch the SummerSlam event, which drew 51,326 people to Allegiant Stadium, the Raiders home complex of the National Football League. The event drew surprising results with popular wrestlers Brock Lesnar and Becky Lynch. SummerSlam also built on the stardom of wrestling champions Bobby Lashley and Roman Reigns.
The overall personal presentation had its moments of excitement, but SummerSlam lacked fireworks. No fireworks are allowed in NFL stadiums unless the roof is open. Hence, specific character inputs mostly dependent on the effects – a fan favorite – didn’t have them. Also, some of the drawn-out storylines took away from the actual wrestling.
WWE also faces increased competition. Founded by the family of NFL team owner Shahid Khan, All Elite Wrestling is gaining more and more recognition in professional wrestling circles.
“The theater is good,” Octagon media director Dan Cohen told CNBC in April. “The quality is good. However, where AEW is missing, there is strength.”
AEW tries to fix this after drawing one of the most famous figures in wrestling entertainment – Phillip Jack Brooks aka CM Punk. The addition of the former WWE superstar to the roster gained national and social media attention for AEW. Brooks returned to the scene after a sabbatical in 2014.
WWE hasn’t had a real threat to its space since World Championship Wrestling signed star Hulk Hogan in 1994 to help grow its brand. WWE eventually bought WCW from WarnerMedia (then AOL Time Warner) in 2001.
AEW has a media rights agreement with WarnerMedia’s Turner Sports property and is affiliated with a former WWE international rights partner Sky Sports. Turner operates AEW under its entertainment division and internally, the network’s executives value the viewership growth and view it as competition for WWE’s main brand.
AEW still has some way to go to achieve WWE’s market share, but it has caught the attention of hardcore fans. WWE considers it a competitor to its NXT division, but it cannot ignore AEW’s recent momentum spike. Punk’s debut drew more than 1 million viewers, and chatter suggests that another former WWE superstar in Daniel Bryan will also join AEW.
Disclosure: CNBC parent company NBCUniversal has a content distribution agreement with WWE.