Shares in WWE shot up 6% to close at $70.86 after the company late yesterday announced two lucrative new rights deals with Fox and USA Network for SmackDown Live and Monday Night Raw.
The company didn’t disclose precise financials, but initial indications of Fox paying about $200 million a year over five years for SmackDown proved to be on target. The WWE said it expects total revenue from new and existing content agreements, including the new U.S. deals, will grow from $270 million this year to $462 million in 2021.
Looking at the full five-year span of the deals, a new research report from Guggenheim Securities said the average annual value of the deals was $524 million, ahead of its estimate of $500 million. The firm raised its price target for WWE stock to $82 a share from $68.
In a conference call with Wall Street investors this morning, WWE co-president George Barrios said the rights deals are the latest indication that the pro wrestling circuit has turned a corner in terms of perception.
“I think you saw a lot of different players that had previously not attached themselves to WWE come closer,” Barrios said, citing ESPN’s unprecedented addition of wrestling to its regular coverage areas on SportsCenter. “The success we have had in social, digital and direct-to-consumer repositions the WWE as a business brand and as a business partner. We went from being viewed as a live-event business to more of a social, digital, direct-to-consumer media business with proven expertise around it. … All of that worked in our favor.”
Barrios and co-president Michelle Wilson said the splitting up of two prime-time nights of wrestling would amplify cross-promotional opportunities, though they declined to offer any specifics.
Shares in WWE have gained about 20% since word emerged in mid-May that it would be shifting SmackDown from USA to Fox for a reported $1 billion over five years.
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