The Feb. 14 deadline for NBCUniversal to respond to WWE regarding their broadcast contract has come and gone without any news, likely meaning that WWE is now free to negotiate with other broadcast networks for its future home.
WWE was reportedly seeking a hefty increase from its $140 million broadcast rights contract with NBCUniversal, which analysts see as significantly undervalued given the numbers that Monday Night Raw and Friday Night SmackDown bring to USA and SyFy.
Is WWE pushing its luck on this, considering the big league roll of the dice that Vince McMahon is throwing down with the launch of the WWE Network on Feb. 24? You take $140 million from TV, and another $82 million from pay-per-view, and you offer wall-to-wall programming on WWE Network for $9.99 a month, and something doesn’t seem to add up.
McMahon’s gamble with WWE Network is a calculated one. WWE projects 2-3 million subscribers by the end of the first year, translating to roughly $250 million-$300 million a year in new revenues for the company. Sure, those dollars will one day soon consume what WWE makes from pay-per-view, but since $250 million-$300 million is three to four times what the company is currently making annually from pay-per-view, that’s a more than fair tradeoff.
With TV, there is not going to be a shortage of suitors for WWE if McMahon does look for a new dance partner. SpikeTV, for instance, which was home to WWE programming from 2003-2005, and is now home to TNA, is currently getting about 1.4 million viewers a week for TNA Impact Wrestling. SmackDown, WWE’s second-highest-rated show, more than doubles that every week, and Raw gets three times that many viewers. More viewers, obviously, leads to more advertising dollars, and that’s the bottom line for any TV network.
Turner Broadcasting also may have interest, and knows the business well, from its Ted Turner days all the way through the 2001 sale to WWE that ended the Monday Night Wars.
If nothing else, the possible interest of Viacom, SpikeTV’s corporate parent, Turner Broadcasting and Fox (wouldn’t Raw and Smackdown make a nice fit on FX?) drives up the dollars that come into WWE’s coffers from TV.
The pending debut of WWE Network doesn’t add pressure to WWE to settle for what it can get for, then; it actually gives McMahon some leverage to seek the deal that he really wants.
– Column by Chris Graham
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