Megabucks deal for WWE's 'SmackDown Live' would accelerate a big shift at Fox

Fox and the WWE have hammered out the framework of an expansive rights deal that will bring "SmackDown Live" back to the broadcast airwaves after a nine-year stint on cable. Insiders with an understanding of the proposed terms of the deal say that upon completion of the necessary legal maneuvering, the "SmackDown Live" showcase will be set to take up residence on Fox's Friday night broadcast schedule starting October 2019. Sources with insight into both camps confirmed that the deal was in the works but could not speak to the amount of cash that would trade hands if the contract is signed. The Hollywood Reporter on Monday published an account that valued the transaction at a little north of $1 billion for five years, or $205 million per year. If those numbers hold up, the "SmackDown" fee will mark a threefold increase over what NBCUniversal is currently paying to carry the package on USA Network. Fox and the WWE declined to comment on the matter. The agreement-in-principle comes on the heels of Fox's five-year, $3 billion deal to snap up the rights to "Thursday Night Football." Fox is also said to be mulling over a renewal of its $840 million UFC contract, which expires at the end of the year. An official announcement of the "SmackDown" deal may be delayed until Fox has made a decision on the available UFC package. One person familiar with the network's thinking suggests that should Fox fail to re-up with UFC, it's likely to hold off on making an official proclamation about "SmackDown" until after that particular bit of news makes the rounds. If Fox agrees to continue its partnership with the William Morris Endeavor-owned UFC, it will share the spotlight with another sports powerhouse in ESPN. Earlier this month, ESPN announced it had closed on a five-year deal for the rights to stream 15 annual "Fight Night" cards on its new direct-to-consumer service ESPN+. While ESPN did not disclose the financial terms, a source with insight into the negotiations says that deal would cost $750 million over the life of the contract. Broadcast and cable networks spending megabucks on DVR-proof live sports content is nothing new, but Fox is particularly eager to snap up as many rights packages as possible given the prospect of being spun off after Disney's pending $52.4 billion acquisition of the 21st Century Fox studios and select cable properties. A shift from a roster of scripted entertainment content to one that depends primarily on sports, news and live "event" programming would only be accelerated by the introduction of a new franchise such as "SmackDown," which in moving to Friday nights would be sandwiched in the fall by "Thursday Night Football" and Fox's college football broadcasts. In many ways, the various rights-sharing deals and other higher-level intrigues (if Comcast has its way, it will knock Disney out of the running for the Fox assets with a higher bid) may be seen as a sort of meta-commentary on the rapid devolution of TV's legacy advertising model. Sports content is particularly attractive inasmuch as it tends to draw the biggest number of eyeballs—while scripted broadcast shows are now lucky to scratch out a 1.0 in the key 18-to-49-year-old demographic, even the lowest-rated NFL package quadruples that delivery—while serving up the most ad impressions. Given the dwindling number of gross ratings points in play, the path to profitability has shifted from a slavish dependence on generating ad revenue to a scheme that places increasing emphasis on in-house production/ownership and making money on the backend. Thus, with its studio holdings up for sale, Fox is going all-in on the scale and immediacy of live TV. (Of course, that the WWE and UFC are such compelling properties at this particular moment in time also has something to do with the relative dearth of available rights deals that are currently up for grabs. Timing is everything.) Another less remarked-upon feature of the increasing desirability of WWE and UFC content is that both assets are being managed by the same power broker. Super-agent Ari Emanuel is not only shopping the TV rights for the UFC (the aforementioned William Morris Endeavor in 2016 acquired the mixed martial arts organization for $4 billion), but his firm also represents the WWE. (Clarification: While the WWE remains a client of William Morris Endeavor, the company earlier this spring tapped CAA to represent it in negotiations over U.S. media rights to the WWE. Beyond the somewhat disorienting alphabet soup of acronyms at play here, this arrangement is particularly unconventional, given that CAA and William Morris Endeavor are rivals and competitors in the Hollywood talent agency space.) WWE shares on Monday closed up 12.52 percent to $57.86 after word of the "SmackDown" deal began circulating. The WWE's Monday night franchise, "Raw," is expected to remain in the NBC Universal family. The Comcast subsidiary is said to be working to continue its decades-long relationship with the WWE's signature program, which currently averages north of 3 million viewers and a 1.1 rating on USA Network. By comparison, the Tuesday night "SmackDown" draws just shy of 2.6 million viewers per episode and a 0.8 in the demo. NBCU's "Raw" deal expires on Sept. 30. Back in January, the three-hour "Raw" block delivered its highest ratings since 2015, as the show's 25th anniversary celebration scared up a staggering 4.53 million viewers and a 1.7 rating, good for some 2.2 million adults 18 to 49.

Megabucks deal for WWE's 'SmackDown Live' would accelerate a big shift at Fox

Featured Stories

Latest News

See More in Media