Netflix has reached a multimillion-dollar, 10-year deal for exclusive rights to WWE’s flagship weekly wrestling show, “Raw,” as the streaming giant expands its offering with more live content.
The deal will bring “Raw” to Netflix starting next January, said Netflix and TKO Group, WWE’s parent company. in a sentence on Tuesday. Netflix will also own the rights to stream other WWE shows and specials outside of the United States.
The deal will cost Netflix more than $5 billion and will last 10 years, with the option to extend it for an additional 10 years or opt out after five, TKO Group said in a regulatory filing.
Hours later, Netflix said in an earnings announcement that it had added 13.1 million subscriptions in the fourth quarter, the largest quarterly gain in the company’s history. The service now has 260 million subscribers worldwide.
“By combining our reach, recommendations and fandom with WWE, we will be able to bring more joy and value to their audiences and our members,” Netflix chief content officer Bela Bajaria said in a statement.
With the deal with WWE, Netflix greatly expands its live programming, which also includes the reality show “Love Is Blind.” Streaming shows live can be a particular challenge for Netflix, which experienced technical difficulties during a “Love Is Blind” reunion episode last April. However, a Chris Rock live comedy special went off without a hitch a month earlier. Netflix will livestream the Screen Actors Guild Awards for the first time next month.
Recently, the company has focused on sports documentaries rather than live sports. But adding “Raw” to its programming makes Netflix more competitive against rivals like Peacock, which has made live sporting events a backbone of its service and recently broadcast a National Football League playoff game. Amazon Prime has been streaming NFL games on Thursday nights since 2022; Apple has signed a $250 million-a-year deal with Major League Soccer and an additional pact with Major League Baseball.
Just a few months ago, Ted Sarandos, the company’s co-CEO, told analysts during a third-quarter earnings call that documentaries and behind-the-scenes shows like “Drive to Survive,” “Full Swing” and “Quarterback” They were “the part of the sports business to which we contribute the most value, which is the drama of sport.”
On live sports he added: “We are not anti-sports. We are simply in favor of profits. “We still have to figure out how to do it.”
The deal with WWE, which is sports-adjacent and features live and largely scripted content, may be a step toward resolving that.
“The partnership between WWE and Netflix is very important,” said Forrester analyst Mike Proulx, noting that the company’s change of course in live sports is similar to its change of strategy in advertising. For years, company executives swore that the service would never include advertising. However, last year, Netflix began offering an ad-supported subscription for a lower monthly price.
Netflix now says its advertising plans account for 40 percent of all new subscriptions in markets where the plans are available. Revenue for the latest quarter grew 12 percent from a year earlier, to $8.8 billion, while net income was $938 million.
“Make no mistake, Netflix’s about-face in live sports is all about advertising, as the company redoubles its efforts to court big brands to instead spend its TV budgets on the growing addressable audience. from Netflix,” Proulx said.
As the U.S. streaming business matures, more such deals are likely, said KPMG analyst Scott Purdy.
“Media rights are extremely attractive to streaming companies because you have a guaranteed audience that wants to watch the big game, match or event,” he said. “This will certainly impact the amount of content budget allocated to live sports versus other content options.”
“Raw,” which launched the careers of stars such as Stone Cold Steve Austin, John Cena and Dwayne (The Rock) Johnson, has appeared on linear television since its debut in 1993. It now airs on USA Network, where it draws 17.5 million . Unique viewers per year, according to WWE
TKO, which is controlled by Hollywood power broker Ari Emanuel’s Endeavor and was created by the merger of WWE and Ultimate Fighting Championship last year, said in a separate statement that Mr. Johnson would join its board of directors. TKO shares rose about 16 percent on Tuesday; Netflix shares rose slightly.
WWE’s announcement came a day after Netflix said Scott Stuber, the company’s president of film, who attracted filmmakers including Rian Johnson, Zack Snyder and Greta Gerwig to the streaming service, would leave in March. His film team earned 18 Oscar nominations on Tuesday, second only to Disney.
