Saturday, February 8, 2020

Rumor Killer On WWE Partnership With Top Streaming Service

Rumor Killer On WWE Partnership With Top Streaming Service
There is said to be no truth to the rumors of Amazon being interested in purchasing WWE content rights, the WWE Network as a whole, or the WWE company as a whole.


As noted earlier this week, WWE announced in their Q4 & Full-Year 2019 earnings report that the company is evaluating "strategic alternatives" for the WWE Network. Vince McMahon later stated that WWE is considering a sale of the rights to their major pay-per-view events to another streaming events. McMahon said they could continue with the current model, by adding new tiers to the Network, or they can exercise the selling of their rights to all "the majors" to increase revenue. The "majors" being streaming services such as ESPN+ or Amazon. Vince said there is "no more better time" to exercise the selling of those rights to all the "major players" who are said to be "clamoring" for WWE content. Vince said this would bring a significant increase in company revenue, and would be "transformative" for WWE.

There's no official word on WWE moving in this direction, but Vince did say it's an option and that they are in talks for potential WWE Network deals. Vince also said that if a deal is finalized, it would be announced in the first quarter of the year. "That's how far along we are," he added.

Regarding the WWE - Amazon rumors, they began after CNBC published an article with analyst Lauren Martin of the Needham investment firm, who was on the call this week. Needham believes Amazon could buy the streaming rights to WWE content, and potentially buy the whole company one day, to help them in the streaming wars.

"We believe that such a licensing deal would put Amazon in the best spot to purchase all of WWE, whenever the family is ready to exit," Martin said. "Vince McMahon is currently 74 years old, going on 50."

Needham pointed to how WWE's OTT (Over-The-Top) streaming service would be attractive to Amazon or other streaming services because it brings in a loyal fanbase, unlike the shows the companies are developing. They are hoping WWE could help one of these services, as Bellator did for DZN and UFC did for ESPN+.

"WWE's live programming is highly differentiated and its Raw, Smackdown and NXT brands are worth more than being any one of 500 series that have no builtin audience or brand," Martin said.

However, Meltzer noted on Wrestling Observer Radio that Amazon is not interested in WWE because they are looking for content that is a little cheaper. Amazon already has a deal with the NFL.

While Amazon might not be interested in WWE, they are talking with potential partners, including DAZN, ESPN+ and NBC's Peacock service, which launches later this year.

The Observer noted how a deal like this could make the WWE Network a second priority, much like UFC's deal with ESPN+ did for the UFC Fight Pass service. Fight Pass was originally to be the home of preliminary matches before major events, as well as several full shows per year, the entire UFC fight library and other libraries from major promotions, and eventually live events from other promotions, plus other Muay Thai, Boxing, Kickboxing, and other fight-related content. However, as of this year, Fight Pass no longer has any exclusive UFC live events, and any events that aren't on broadcast TV or pay-per-view, are airing on ESPN+. UFC has become key programming there as ESPN+ has shown huge growth, according to the Observer. We could see a situation where the main content on the WWE Network is the archives, maybe some digital series here and there, replays and things like that, but none of the major shows. Depending on whether or not the deal is for just the 12 or more WWE pay-per-view events, or if it will include the WWE NXT Takeover events, which is likely, is still up in the air. This could also lead to the long-awaited debut of non-WWE content on the Network with some indie promotions such as EVOLVE, wXw, PROGRESS Wrestling, and others, which has been discussed for a few years now. WWE has had plans to introduce a more expensive tier, which would include this non-WWE content, but the launch has been delayed until everything else is sorted out. There's no word on what's happened to the roll-out of the tiered Network, or what the hold up is, but that was a key project that former Co-Presidents George Barrios and Michelle Wilson had put work into.

TV industry sources reported to the Observer that Peacock would look at WWE to be its key initial programming to draw subscribers from the launch, very similar to how ESPN+ did with UFC. WWE would be able to get significantly guaranteed money for their big money events, instead of being forced to rely on declining WWE Network subscription money. The would be that WWE can sell the rights to their pay-per-view events, to a streaming service, for $12 million to $13 million per monthly event. This would be higher than the value of that programming for themselves, but these streaming services have been offering up big money to begin with just to get things off the ground.

WWE would give up the access to data that it has previously touted as a key component of the big events on the Network, and another company would have that data, just as ESPN has all the date of exactly who buys UFC events on their service, who watches them as free subscribers, how many total watch, who they are, and then be able to target the customers directly. WWE has previously indicated that this type of data is big for the company. Vince, during the investors call, was asked about the value of that data, and said he felt like it was a misplaced priority. Barrios and Wilson have previously championed this data many times.

"I think it's misplaced," Vince said during the investors call. "It was one of our goals, still continues to be, but when you're playing with some of the majors, it depends on whether or not we can negotiate holding on to things of that nature. Sometimes, you know the big boys who want all of that for themselves, so it's a matter of really negotiating if we keep it, we could keep it absolutely."

"Nothing is a must have," McMahon said in regards to the data. "You know we would deal with what's available and again, it's going to fluctuate somewhat with what the majors want to have."

Regarding WWE potentially selling their rights to NBC's Peacock service, that platform is reportedly scheduled to launch on Wednesday, April 15, and would likely have around a $10 per month price point, similar to the WWE Network now. This launch date means they would miss WrestleMania 36 by less than two weeks. WrestleMania is clearly WWE's most valuable event of the year, and the one that they give up tens of millions of dollars for by making it part of their own WWE Network package.

ESPN+ seems unlikely for a WWE partner as they have lost a ton of money, despite the growth. Parent company Disney has announced losses of $693 million for the year, which includes ESPN+, Hulu and start-up costs for Disney Plus. DAZN also seems unlikely as their situation has changed because of how much money they have lost so far with so many large deals, mainly when it comes to boxing content that doesn't come close to being covered with subscription revenue. However, as noted, these "major players" are willing to lose a lot of money with the idea that it's a start-up, and it'll bring growth in the long-term. WWE's premium content could draw a pretty penny as just about all major sports events are already locked up with other platforms.

Amazon is reportedly not interested in WWE because they are looking for lower-priced content. ESPN+ is also unlikely because they have UFC and other properties. NBC's Peacock service seems to be a top contender and the favorite right now, but that hasn't been confirmed as who WWE is in talks with. Peacock also already has a relationship with NBCUniversal, which owns the USA Network. Meltzer did state that he's heard ESPN+ isn't interested in the WWE rights, but if they were looking to repeat the success they've had with UFC, then WWE would be the obvious answer.

The Observer noted that if Peacock were to announce a $9.99 price, Vince and WWE can push this as being the same price that they were already charging for the content. DAZN at $20 per month would not allow for that, but Vince could sell the ESPN+ price of $4.99 at being a savings to consumers. This would ultimately sacrifice the value of the WWE Network, as UFC did with Fight Pass, but it would be much more financially successful, says the Observer. UFC has had many fans keep Fight Pass while adding ESPN+ as well. Meltzer noted that details of the discussions are being kept a secret, but it looks like the $9.99 price point that WWE fans are paying now, will still be.

Based on the various prices and directions going around, any of these many options Vince touted would be a great deal for WWE. The Observer notes that eventually there would be a market correction as at some point realism will come into play with these deals and people would see that they are overpaying based on streaming revenue generated, and that not being nearly what is paid for. However, right now nobody really knows what the future will hold and all decisions are based on the short-term.

The bottom line is that these start-up streaming services are looking for reliable content providers like WWE and UFC, and the WWE Network would be more valuable to the services than it would to WWE itself. It's believed that more "major players" are expected to get into the streaming game, and these services are looking for a franchise brand like ESPN did with UFC.

As noted, Vince stated that a deal could be reached in the first quarter on this year as they are that far along in talks. The Observer noted that WWE reportedly wants the equivalent of, or actually a little less, of what they would gross on the WWE Network and pay-per-view.

This has been described as a major story to watch for WWE. Stay tuned for updates.

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