WWE aims to increase international media revenue but faces new competitor

WWE aims to increase international media revenue but faces new competitor

Global Wrestling Entertainment

World Wrestling Entertainment hosted their first annual event, SummerSlam, in Las Vegas this month and are now looking to align global activity to achieve historic revenues.

While preserving its media rights in the United States, WWE is seeking global deals for its WWE Network streaming service. Although the largest wrestling company in the world has ended service in the United States, it still serves as an international component. WWE is keen on similar broadcast rights deals with CNBC’s parent company, NBCUniversal, betting that its weekly wrestling content and classic library will attract media companies from around the world.

WWE has made deals with Fox Sports and NBCUniversal, including a billion dollar deal to broadcast American content on NBCUniversal’s Peacock service. The company also offers linear rights and streaming packages internationally with networks such as Virgin Media (Ireland), UK-based BT Sport and Sony India. Additionally, WWE has entered into an agreement with sports streaming service DAZN to broadcast events in Germany, Austria and Switzerland, as well as a streaming agreement in China with online platform iQIYI, which is owned by Baidu technology company. is near.

The combined media deals helped WWE generate $ 475.9 million out of $ 529.1 million in revenue for the first six months of 2021. Last year, WWE earned $ 868.2 million from media rights, excluding revenue from the Peacock deal which began in March. WWE is listed on the New York Stock Exchange and has a market capitalization of $ 3.6 billion. WWE shares opened as low as $ 52 a share on Monday, down from their 52-week high of $ 70.72 last June.

WWE has declared SummerSlam, a full-capacity event in Las Vegas, to be the highest-grossing and most-watched event, with a “seven-figure” global audience consumed primarily on Peacock and WWE Network. Was. But the company did not disclose details surrounding the numbers.

Becky Lynch celebrates her loss to Bianca Belair at SummerSlam 2021.

Global Wrestling Entertainment

It’s unclear how much WWE will benefit from other international deals, but the new deals won’t come close to what NBCUniversal and Fox Sports charge for licensing its content. Fox also has a billion dollar deal with WWE, and USA Network – also owned by NBCUniversal – has a TV rights-only deal.

Eric Handler, managing director and senior research analyst at MKM Partners, said the rights to WWE Day 2 with Hulu, which allows subscribers to watch Raw and SmackDown shows 24 hours after they air, are on the market. media rights. There will also be something to watch out for. Currently, Peacock viewers can watch the show 30 days after the live broadcast.

WWE uses the operating profit before depreciation and amortization formula to break down finances in its earnings report. Although media rights have remained stable since 2017, revenues from advertising, sponsorship and consumer products have fallen sharply.

CFO Christina Saleen told CNBC in April that WWE is looking to add more sponsorships and grow its e-startup business. Additionally, WWE reportedly earned up to $ 40 million per event under a 10-year deal with Saudi Arabia in 2018.

If WWE acquires more global media deals and follows through on its revenue-boosting plan, it could reach $ 1 billion in revenue, the highest in company history. In 2020, WWE generated $ 974.2 million in revenue, up from $ 801 million in 2017, thanks largely to media fees.

“They are very good content creators,” Handler told CNBC. “As the world of media evolves, so does their business. They can sell their product to multiple media players around the world. So for them it’s about finding more ways to monetize the content. “

Will WWE be threatened by a wrestling start-up?

WWE invited CNBC to watch its SummerSlam event, which drew 51,326 people at the National Football League Raiders’ residential complex, Allegiant Stadium. The event made a surprise comeback with popular wrestlers Brock Lesnar and Becky Lynch. SummerSlam also continued to rely on the celebrities of wrestling champion Bobby Lashley and Roman Reigns.

There were moments of excitement in the individual performance overall, but SummerSlam lacked the pyrotechnics. In NFL stadiums, shows such as fireworks are not allowed until the roof is open. Therefore, specific character entries that typically rely on influences – a fan favorite – did not. Plus, some of the never-ending stories have kept the actual wrestling away.

WWE also faces more competition. All Elite Wrestling, started by the family of NFL team owner Shahid Khan, is gaining recognition in professional wrestling circles.

“The theater is good,” Octagon media director Dan Cohen told CNBC in April. “The quality is good. Where AEW falls short is in Star Power.

AEW is trying to fix this after signing one of the most famous figures in wrestling entertainment – Philip Jack Brooks, aka CM Punk. The addition of the former WWE Superstar to the roster drew national and social media attention to AEW. Brooks returned to the scene in 2014 after a sabbatical.

Since World Championship Wrestling, which signed with star Hulk Hogan in 1994 to help him grow his brand, WWE has faced no real threats in its field. WWE eventually bought WCW from WarnerMedia (then AOL Time Warner) in 2001.

AEW has a media rights agreement with the Turner Sports property of WarnerMedia and is related to Sky Sports, a former WWE international rights partner. Turner operates AEW as part of its entertainment division, and internally network executives appreciate the growth of its audience and see it as competition for WWE’s main brand.

AEW still has a way to reach WWE’s market share, but it has caught the attention of die-hard fans. WWE sees him as a contender for their NXT division, but they can’t ignore AEW’s recent spike in speed. Punk’s debut has drawn over a million viewers, and discussions suggest Daniel Bryan, another former WWE Superstar, is also expected to join AEW.

Disclosure: NBCUniversal, CNBC’s parent company, has a content distribution agreement with WWE.

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