A Look At How Much New WWE Deals For RAW And SmackDown Might Be Worth
WWE RAW appears to be staying on the USA Network, as The Hollywood Reporter revealed this week that WWE and NBC Universal are close to finalizing a new deal for the show. The deal would only be for RAW, and Variety reported that FOX, Facebook and Amazon are the frontrunners for securing the rights for SmackDown. FOX would likely air the show on FS1, so in each case it would be far less exposure for the show than it currently receives on USA. However, as the new ESPN – UFC deal showed, networks are looking to spend a lot of money to boost their services.
It was noted in The Hollywood Reporter story that NBCU was looking to keep RAW at three times its current value. Our own Brandon Howard Thurston, who co-hosts the WrestleNomics podcast, has analysis from JPMorgan from December 6, 2017 estimating that NBCU is paying an annual average of $150 million per year for Raw and Smackdown. The excerpt from JPMorgan read:
"The largest of these contracts is a domestic rights agreement with NBCUniversal, which airs Raw and SmackDown on the USA Network on Monday and Tuesday nights, respectively. We estimate the average annual value of this deal at approximately $150 million, which is roughly equal to what we believe the payment is in 2017 at the halfway point of the contract (runs from Oct 2014 to Oct 2019)."
Assuming that the $150 million per year is just for RAW and SmackDown (WWE does air other special programming on the USA Network like Tribute to the Troops), that would put each hour of programming at $30 million per year, or the average annual value of RAW at $90 million and SmackDown at $60 million. However, RAW has higher viewership than SmackDown, so it's a fair to assume that RAW is close to 2/3 of the value of the deal, since RAW averaged 64% of total viewership in 2017, with SmackDown at 36%.
Using these numbers, with RAW getting three times its current value, that would mean the new deal for RAW is in the $270 million – $300 million range. If it's at $300 million, that's twice the amount they are currently averaging for RAW and SmackDown combined. If WWE is able to secure a deal with the same raise for SmackDown, that would put it in the $150 million – $180 million range. At that rate, the combined value for RAW and SmackDown would be between $420 million – $480 million, or about triple what they are currently earning.
Based on the graph from Thurston below, on the lower end, if the annual average of the current WWE TV deal is $140 million, RAW only made up 60% of the deal and NBC renewed the show at three times its value, that would put the new RAW deal at $252 million. On the upper end, some reports have the current WWE television contract at $160 million. Using that figure, and if RAW made up 67% of the current deal with NBC paying three times its current value, that would put the new RAW deal at $321.6 million.
A range of possibilities on the AAV (average annual value) of a 2.5x to 3.0x raise in rights for $WWE RAW pic.twitter.com/z2NRnKAwoX
— Brandon Howard Thurston (@BrandonThurston) May 17, 2018