Reality Check On WWE Televison Rights Fees

As noted earlier, the negotiating period between WWE and NBCUniversal to keep RAW and SmackDown on the USA Network and SyFy expired late last week. WWE and NBCU were unable to reach a deal, and WWE will now be shopping their programming to other distributors.

Shares of WWE are up over 150% over the past year, as investors obviously see a major windfall with the company's television rights fees for RAW and SmackDown. Chris Bevilacqua recently referred to WWE as "a hidden gem" on Forbes SportsMoney, and said that the television landscape was completely different from the last time that WWE negotiated their rights fees with companies now paying huge sums for sports content. Bevilacqua noted that the company has a very loyal audience with a strong social media following.

In terms of "gross ratings points," Bevilacqua noted that WWE is triple the size of NASCAR, which recently inked a deal with NBC worth $4.5 billion over ten years. It was noted that the only sports property larger than WWE - in terms of viewership - is the NFL. However, Ad Age has an article today here dumping a bucket of ice water on Bevilacqua's argument. The story noted that while WWE garners big ratings, their shows aren't major revenue generators. Havas Media Executive VP/Head of Strategic Investments Jason Kanefsky noted that WWE has too much history to now be considered live sports as opposed to entertainment.

"It misses some critical things that make live sports. At the end of a season there is a winner and loser and they are real," Kanefsky said. "WWE won't be able to make the leap from entertainment to live sports."

"In other live sports they have the ability when something unexpected happens to have a halo effect and reach beyond core team fans."

Wrestling has always had difficulty generating ad revenue that correlates to the number of viewers being drawn. The fact that WWE and NBCUniversal were unable to reach a deal during their exclusive negotiating window could be a telling sign as NBCU would know better than any other company as to the amount of revenue that WWE programming brings in.

Follow Raj Giri on Twitter at @RajGiri_303. Got a news tip or correction? Send it to us by clicking here.

Short URL: http://winc.cc/CwW4wH

« Previous Headline | Comment | Main | Next Headline »

WrestlingInc.com is the largest independently owned wrestling website in the world (Source: Alexa). Become a fan on Facebook, follow us (@WrestlingInc) on Twitter:

MOST POPULAR

Will Michael Sam accepts WWE's invitation and appear on RAW next Monday?
Yes, he will appear live on the show
Yes, he will appear via satellite or taped segment
No