The deal

Last week (January 23), professional wrestling giant World Wrestling Entertainment (WWE) announced that its flagship weekly Monday Night Raw program would leave linear TV for the first time after the company agreed to a deal with streaming service Netflix to broadcast the show in several major global territories.

The agreement, beginning in January 2025, will see Netflix broadcast the weekly three-hour live show both domestically, as well as across Canada, the UK, and Latin America. More regions are due to be added throughout the length of the contract, which has been widely reported as 10 years.

Netflix’s deal for Raw, which at 31 years old is one of the longest-running weekly episodic sports television shows in the world, is reportedly worth $5 billion.

As part of its package, Netflix will also hold rights to WWE’s Friday Night Smackdown and NXT weekly shows in Canada, the UK, and Latin America, as well as its slate of premium live events, including the iconic WrestleMania annual event.

Current domestic rights for Raw are held by the USA Network in a tie-up running through 2024. Once the rights change over to Netflix, USA Network will move to broadcasting the shorter Smackdown on Fridays instead.

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WWE, run by TKO Group, is a consistent viewership draw in the US, with the promotion stating that Monday Night Raw brings in 17.5 million unique viewers a year on USA Network.

NXT is shown by CW Network, while premium live events are broadcast by streaming platform Peacock. Together with its new Netflix deal, from 2025 onwards, the wrestling promotion will rake in as much as $800 million per year for its slate of rights in the US alone.

Why it matters

Netflix has been taking small but significant steps into the live-streaming world, having previously been unwilling to enter the space. Last year, the streaming giant’s co-chief executive Ted Sarandos said at that point it did not see a path to profitability in the sector, preferring to focus on popular behind-the-scenes sports documentaries across motor racing's Formula 1 (F1), tennis, American football, golf, and soccer.

However, since then it has changed its tune, making its live sports coverage debut last November with a celebrity golf tournament.

It then signed an exclusive partnership with international pay-TV operator Setanta Sports in 13 countries. That deal sees a new joint bundle offering that will be called Fan Pack, allowing subscribers to access both Setanta Sports and Netflix content with one subscription fee.

Last month, the service made its next move into live sport by unveiling a high-profile men’s tennis clash, The Netflix Slam, a tournament taking place inside the Mandalay Bay Resort and Casino in Las Vegas in early March.

The live broadcast will stream in both English and Spanish and is being produced by the Full Day Productions firm.

By securing Raw and these other live sports rights, Netflix has opened the door to advertising during intervals not previously available, which will increase its revenue on top of its subscription business.

Conrad Wiacek, head of analysis and consulting at Sporcal (GlobalData Sport), said: “WWE’s new deal with Netflix is potentially a game changer for both WWE and Netflix. With its new ownership structure, WWE moving its flagship show away from network television is significant for several reasons, primarily from a monetization point of view.

“With advertising now no longer a key consideration for RAW, the ability for WWE to innovate in terms of how it presents content is significant. Netflix showing premium live events [PLEs], as well as weekly programming, suggests that the WWE Network, now owned by Peacock in the US but still available in territories such as the UK, will be subsumed into the streaming platform, giving wrestling fans all the content in one place, as well as giving WWE access to a potential new audience.

“Netflix has shown the ability to reach sports fans in unique ways, with the likes of Drive to Survive driving the interest of younger fans to F1. With WWE’s core demographic typically skewing younger, the need to capture this audience isn’t as pressing as it was for Formula 1. Still, it shows a willingness to go where the audience is. With the decline of those younger audiences watching traditional television, many more traditional sports will be watching the development with interest.

“While WWE is not live sport in the traditional sense, scripted reality-based programming fares well on streaming services. The major difference will be the live nature, with RAW and PLE’s demanding a live audience. With Netflix providing new tiers of subscription, with advertising and without, WWE programming will be a testing ground for Netflix in providing live content as opposed to providing on-demand streaming, which may be a proof of concept for other sports.

“In addition, this must be seen as a huge win for Endeavor and TKO Holdings, securing over $6bn for its flagship content within the year of the takeover, suggesting that the company is in robust health despite the departure of long-term chairman Vince McMahon.”

The details

Mark Shapiro, president and chief operating officer of WWE’s parent company TKO Group, described the deal as “transformative,” adding: “It marries the can’t-miss WWE product with Netflix’s extraordinary global reach and locks in significant and predictable economics for many years.

“Our partnership fundamentally alters and strengthens the media landscape, dramatically expands the reach of WWE, and brings weekly live appointment viewing to Netflix.”

The deal comes four months after Endeavor, the international entertainment and sports giant, completed its deal with WWE to merge the organization with mixed-martial arts promotion UFC under the publicly listed TKO Group.

The TKO Group boasts more than 1 billion fans worldwide, reaching viewers in 180 countries and producing more than 350 annual live events.

The deal, first announced in April, saw Endeavor take a 51% controlling interest in the joint venture while existing WWE shareholders have kept the remaining 49% stake on a fully diluted basis.

At the time, the companies said TKO would “leverage Endeavor’s expertise” in areas including domestic and international media rights, ticket sales, yield optimization, event operations, global partnerships, licensing, and premium hospitality “to drive revenue growth.”

The new company was to be led by Endeavor chief executive Ariel Emanuel, with WWE’s former chief executive Vince McMahon becoming the executive chairman. However, on Friday (January 27) McMahon stepped down from TKO Group amid sexual misconduct allegations against him by a former employee.

He has denied the allegations and is still WWE’s controlling shareholder, holding 16.4% of the economic interests in TKO and 16.4% voting power in the new entity.