Netflix And Involvement of TKO group announced on Tuesday that the streaming platform will begin airing WWE's flagship program Raw starting next year, Netflix's first foray into live sports.
The 10-year deal is valued at more than $5 billion, according to company filings. Netflix will have the option to end the deal after five years and extend it for another decade. The streaming platform will be able to broadcast Raw worldwide and will launch a deal with exclusive rights to it in the US, Canada, UK and Latin America. Netflix will also be home to all WWE shows and specials outside the US, including SmackDown and NXT, as well as WrestleMania, SummerSlam and Royal Rumble.
TKO shares rose more than 15% following the news and a separate announcement that actor and former wrestling superstar Dwayne Johnson would join its board of directors. Shares of Netflix rose about 1% ahead of the company's fourth-quarter earnings report on Tuesday.
Netflix, which tries to generate revenue by reducing subscription sharing and encouraging viewers to switch to ad-based memberships, has made little attempt at streaming live programming in its history. The addition of Raw, which currently airs on the USA network and produces three hours of live programming per week year-round, will be a boon to the platform and a significant historic shift for Netflix.
“It's a game changer,” Mark Shapiro, TKO's president and chief operating officer, said in an interview. “When you look at the chapters in sports media history, the new chapters are driven by extraordinary new paradigms. ESPN and Turner in 1987 brought the NFL to cable. in 1994 Rupert Murdoch brought football to Fox. As the new stories are written, Raw on Netflix will be the true beginning of the chapter. “
Netflix recently got into sports with documentary-style series about Formula 1 and professional golf, tennis and soccer. The deal will allow Netflix to use WWE's intellectual property for similar projects. With WWE's permission, Netflix could even develop movies or series about WWE characters, a person familiar with the matter said.
TKO, WWE's parent company, has a deal with Netflix that brings WWE wrestling to an estimated 250 million subscribers worldwide. WWE Chairman Nick Khan has had Netflix on his radar for several years as a potential landing spot for Raw.
He discussed the biggest broadcaster in the world during WWE 2022. first-quarter earnings call, citing how Netflix has shown openness to changing its long-held positions, such as ditching advertising and cracking down on password sharing. Until recently in 2022 DecemberNetflix CEO Ted Sarandos said at the UBS Global TMT conference that Netflix did not see a “profitable path in the big sports rental space.”
“Netflix is willing to adjust and change its position when it identifies a problem,” Khan said in 2022.
TKO has been in discussions with other media companies, but focused on Netflix in December, according to people familiar with the matter.
Netflix's global footprint, which exceeds that of any other streaming service, was a major draw for WWE, Shapiro said.
“It's one of the biggest entertainment platforms in the world,” Shapiro said of Netflix. “He has marketing that you can't even understand. It has an unprecedented position in terms of what they do on the front page.
Earlier this month, Netflix announced that its ad tier, which the company launched in 2022. as of November, has 23 million monthly active users. Matches will be produced during commercial breaks to accommodate ad-free customers who will see continued action from live matches that are not broadcast. It's not important to the outcome, for example, of a wrestler with a sustained head trap, according to a person familiar with the matter.
Raw is the flagship program of the US cable network, drawing 17.5 million viewers annually. unique viewers, the companies reported. Shapiro said that Amazon's ability to air Thursday Night Football this season without a problem and the Peacock's recent success in broadcasting NFL playoff games gave him confidence that Netflix would carry Raw even if technologically won't do anything like that. again consistently.
Disclosure: Comcast NBCUniversal, the parent company of CNBC, is owned by USA Network.
Clarification: This story has been updated to reflect that Netflix reported 23 million monthly active users in its advertising tier.
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