Sports entertainment and media company World Wrestling Entertainment (wwe) (WWE -1.23%) has had an exclusive streaming relationship with Peacock, part of Comcast‘s (CMCSA -1.01%) NBCUniversal Segment: Since Spring 2020. This deal has given Peacock premium subscribers access to WWE’s extensive back catalog of classic wrestling matches and the ability to watch live events such as Royal Rumble, WrestleManiai SummerSlam. However, WWE’s weekly live shows, raw i Slap, are still debuting on linear TV and will only arrive on Peacock a day later.
During WWE’s Q2 investor call, co-CEO Nick Khan suggested that the company is open to the idea of transferring the live broadcast rights of raw i Slap to streaming. Here’s why forging an even closer relationship could be a smart move for both WWE and Peacock.
The linear television landscape is changing
WWE negotiated for the last time raw i Slap offers in 2018. raw it airs on the USA Network, also owned by NBCUniversal, in a deal worth $1.3 billion over five years. Fox Corporation Broadcasts from the FOX network Slap in a deal worth about one billion dollars, also over five years.
raw draws approximately 2 million live viewers per week during its three-hour duration, while Slap attracts around 2 million during its weekly two-hour broadcasts. For comparison, those numbers are in the range of the average audience for a National Basketball Association game. However, with cord-cutting on the rise and some experts predicting a decline in live TV ad spending over the next few years, this could be an opportune time for WWE to move its flagship weekly shows to the Peacock.
WWE is not new to the streaming space
WWE first entered the US streaming market with WWE Network, which it launched in February 2014. Within a year, WWE Network had over 1 million subscribers. But despite that promising start, it struggled to grow. Its subscriber base in the United States peaked at 1.9 million in 2017.
When WWE signed its deal with Peacock in early 2020, the WWE Network had just 1.1 million subscribers. An estimated 1 million of them later moved to Peacock. However, a year after the deal went into effect, Khan revealed that more than a third of Peacock’s premium subscribers had watched WWE content.
Streaming services are incorporating live content
As Khan noted on WWE’s investor call, streaming companies are “hungry” for premium live content. The executive cited apple$2.5 billion contract with Major League Soccer and Amazonthe $11 billion deal with the National Football League. As a provider of live programming, Khan suggested WWE is in a unique position because it attracts massive audiences and operates year-round.
For NBCUniversal, its ongoing relationship as a partner of WWE Networks and Raw certainly puts it in a strong position should WWE decide the time is right to jump into streaming entirely. As Khan stated on the earnings call, “We always talk to [NBCUniversal] first about anything that happens.”
Peacock operates on a relatively small budget
Comcast reported that Peacock had 13 million premium customers at the end of the second quarter of 2022, the same number it had three months earlier. The potential to attract millions of additional viewers with live WWE weekly programming is certainly an attractive prospect for Comcast, depending on how much such a deal would cost.
NBCUniversal reportedly spent more than $1 billion to secure Peacock’s WWE Network rights through 2025. Considering WWE made more than $2.3 billion the last time it sold the television rights to Raw and SmackDown, it’s reasonable to wonder if NBCUniversal is willing to splurge. much to make both shows exclusive to Peacock. But as Khan pointed out, Peacock’s main streaming competitors are already shelling out billions of dollars a year for premium live content.
If WWE decides to change raw i Slap for streaming only, Peacock would do well to secure the rights. By its very nature, pro wrestling is scripted, meaning viewers are presented with feuds and storylines that often continue for months, if not years. In a world where subscribers can cancel and add streaming services on a monthly basis, live WWE content could bolster Peacock’s membership and growth.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Tom Wilton has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Amazon and Apple. The Motley Fool recommends Comcast and World Wrestling Entertainment and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.