Netflix Scores Knockout Deal with TKO Group, Bringing WWE's "Raw" to Streaming
In a surprising move, Netflix has ventured into the world of live sports entertainment by securing a groundbreaking deal with TKO Group, the holding company for both UFC and WWE. The highlight of this collaboration is the inclusion of WWE's flagship program, "Raw," on the streaming service, marking Netflix's entry into the realm of live sports content.
The monumental deal, valued at $5 billion over the next ten years, was disclosed in a recent TKO Group SEC filing. As part of the agreement, Netflix will also become the exclusive international home for all WWE shows and specials outside the United States. This includes popular programs such as SmackDown, NXT, WrestleMania, SummerSlam, and Royal Rumble. WWE will retain control over event production, contributing approximately 150 hours of content annually to Netflix.
This strategic move has already had a profound impact on TKO Group's financial standing. The announcement, coupled with the high-profile appointment of Dwayne "The Rock" Johnson to the company's board of directors, led to a surge in TKO shares, opening up more than 20 percent on Tuesday and adding around $1 billion to its market capitalization.
The significance of this collaboration lies in its unexpected nature. While Netflix has previously made a name for itself in the sports content arena with original documentaries like "F1 Drive to Survive," the Untold series, "The Last Dance," and more, the streaming giant had consistently expressed reservations about the high costs associated with live sports rights.
However, the current landscape has evidently prompted a change in approach for both parties involved. Netflix, boasting 80.1 million subscribers in the United States and Canada, now provides WWE with a broader distribution reach than traditional cable television (77.87 million subscribers). Additionally, the partnership grants WWE access to a massive international audience of 180 million subscribers on Netflix.
The $500 million annual deal represents a substantial increase in payment, approximately 30%, depending on calculations involving international rights. Netflix has also retained the flexibility to either cancel the deal after five years or extend it for an additional decade upon completion.
This unexpected collaboration between Netflix and TKO Group signifies a major shift in the streaming giant's strategy, breaking into the live sports entertainment market in a big way. As fans eagerly await the streaming debut of WWE's "Raw" and other popular shows, the impact of this deal is poised to reshape the dynamics of sports content consumption on streaming platforms.
