WWE SmackDown Moving To Three Hours Appears To Be Likely

There may be more changes to WWE programming this fall once SmackDown moves to Friday nights on FOX starting October 4th.

During today's WWE earnings call, WWE Co-President George Barrios was asked about the direction that they would be going with SmackDown. Barrios stated that the company has been used to monetizing six hours of content for a long time, however now the sixth hour is being used on the Network (presumably referring to 205 Live). He said that they will decide in the next several months how to use the sixth hour, which could mean a third hour of SmackDown.

"We've been monetizing some way, shape or form six hours of content for a long time," Barrios said (h/t to The Motley Fool for the transcription). "Today, that sixth hour is primarily being used on the network and we'll figure out here over the next several months, what we think the best use of, nothing to update now."

There have been rumors of SmackDown moving to three hours when it moves to FOX, with the first two hours on the FOX network and the third on FS1. The show would not be able to be three hours on FOX alone due to scheduling conflicts with local news.

Earlier this week, JPMorgan analyst David Karnovsky raised his target price on WWE stock from $95 to $105. Karnovsky estimated that in addition to WWE's current deal with FOX and USA Network, they will generate an additional $25 million per year in 2020 from a third hour of SmackDown on FS1. WWE currently will pull in an estimated $205 million per year with the FOX deal ($102.5 million per hour of SmackDown), as well as $265 million per year with their new deal for RAW with NBC Universal (about $88.3 million per hour of RAW).

RAW and SmackDown domestic ratings declined 14% and 13%, respectively, for the first quarter of 2019 from the prior year quarter while the ratings for the top 25 cable networks were only down 5% during that same period. Vince McMahon blamed talent absences due to injury and illness for the drop and said that all of their talent is back now. As we noted on Twitter earlier today, ratings are down even more since the talent have returned. While RAW was down 14% in the first quarter, the audience is down 28% so far this month from the same period in 2018. Regardless, McMahon feels that the company will have "a whole new beginning" this fall.

"In coming latter part of September, we're going to have, it's almost like, it's not quite a metamorphosis, but we're going to have a whole new beginning," McMahon said. "The promotional value alone notwithstanding rights fees and what have you, promotional value alone in terms of Fox, in terms of commitments from NBCU is something we've never seen before, not even close, it's extraordinary. It's going to kick us into again an element we've never seen before in terms of promotion with everything, WWE talent, story lines, you name it! So it's a rising tide situation that we're really looking forward to and having that carry on throughout the year."

Barrios added, "As Vince mentioned, we remain excited about the debut of SmackDown live on Fox on October 4. The debut will mark the first time WWE will be available live 52 weeks a year on a 120 million homes on a premier broadcast platform. Finally, as we said before, in addition to absolute performance, we believe relative performance is critically important as it illuminates the value of WWE within the PayTV ecosystem. In Q1, when excluding NASCAR's premier event the Daytona 500, WWE delivered greater average viewership then any professional sports league, other than the NFL."

While WWE stock hit $100 earlier this week, it dropped 13.35% today following the earnings call, closing at $85.38 per share.