WWE’s New ‘Raw’ Deal Propels Stock, Sets Stage for ‘Smackdown’ Move

World Wrestling Entertainment stock skyrocketed 15.4% on Thursday on reports the company is closing in on an eye-popping new deal with NBC Universal for the rights to air “Monday Night Raw” on the USA Network for three times what it currently gets.

Analysts are projecting the new deal to be worth well north of $400 million a year. It’ll also be too rich for NBCU to maintain a monopoly on WWE’s linear business; the conglomerate elected not to renew a deal for a second program, “SmackDown Live,” which has aired on USA since 2016. WWE is now free to shop those rights around to a host of parties said to be kicking the tires.

“We think ‘SmackDown’ is due for a big raise as well, and likely still viewed as a bargain for several players reportedly interested,” said Eric Katz, senior analyst for Wells Fargo.

“SmackDown” has often been viewed as the “B” show in WWE’s arsenal, but ever since moving to a live format similar to that of “Raw,” and on the backs of fan-favorite superstars like Daniel Bryan, A.J. Styles and Shinsuke Nakamura, it has grown in popularity.

Frontrunning contenders for “SmackDown” rights include Fox, Facebook and Amazon. With the recent news that Fox will be sharing Ultimate Fighting Championship rights with ESPN, a few holes could open up in its scheduling that would present a great fit for WWE’s programming.

WWE also recently partnered with Facebook to air a live in-ring series called “Mixed Match Challenge” on the Facebook Watch platform, which reportedly generated more than 35 million total engagements during its Jan. 16 debut episode. However, WWE officials were said to be unhappy with declining viewership thereafter.

Always lurking is the possibility for WWE to finally move “SmackDown” to its own WWE Network. On April 9, the day after WrestleMania 34, the company announced that its streaming service had reached a record 2.12 million total subscribers. But when WWE chief branding officer Stephanie McMahon spoke to Variety in January, she stressed the importance of linear distribution for the company at this stage.

But perhaps with such a rich “Raw” deal now is the time to pull the trigger for “SmackDown?”

Outside of a five-year stint between 2000 and 2005 on Paramount’s TNN/Spike TV network, “Raw” has largely remained a flagship fixed at USA since its 1993 debut. The series lavishly celebrated its 25th anniversary in January at multiple venues in New York. “SmackDown,” however, has been something of a vagabond ever since its 1999 debut, originally airing on Paramount’s now-defunct UPN network before moving to CBS/Warner Bros.’ The CW in 2006, Fox’s MyNetworkTV in 2008 and NBCU’s Syfy in 2010, before finally landing at USA two years ago.

One option open to “SmackDown” is moving from a two- to three-hour format akin to “Raw.” That would obviously inflate the show’s advertising potential, which might even be an enticing lure for suitors. The smaller two-hour bite is more appealing to fans, but a deeper breath would allow the brand to broaden its storytelling spotlight to include some of its underutilized talents. (This always appears to be in flux, however. For instance, when Fox was circling the “Raw” rights package, there was speculation that the program would drop to two hours to account for 10pm local newscasts on Fox stations.)

Wherever “SmackDown” ultimately lands, WWE is obviously moving into this period with more leverage than ever.

“The company sits in a much stronger financial and negotiating position now than in 2014 (having just launched the WWE Network while PPV was winding down),” reads a Guggenheim analysis of WWE’s current television renewals landscape. “We believe that WWE stands to make significant headway during its coming television contract negotiations due to an enhanced brand, new [business-to-business] relationships, more potential bidders than ever, and a contract that under-indexes other live premium programming.”

WWE stock closed at $50.31, a record high. News of the “Raw” deal was first reported by The Hollywood Reporter.

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