Netflix Strikes $5 Billion Deal to Air WWE’s “Raw” in Groundbreaking Move

Netflix and TKO Group Holdings announced on Tuesday a groundbreaking 10-year deal valued at over $5 billion, marking Netflix’s first major foray into live sports. The streaming platform will start airing WWE’s flagship program “Raw” from the next year onwards, with the flexibility to exit the deal after five years or extend it for an additional decade.

Deal Details and Geographic Reach

Under this transformative agreement, Netflix will initially have exclusive streaming rights to “Raw” in the U.S., Canada, U.K., and Latin America. The streaming giant will also gain global streaming capabilities for “Raw” and become the home for all WWE shows and specials outside the U.S., encompassing popular events such as “SmackDown,” “NXT,” “WrestleMania,” “SummerSlam,” and “Royal Rumble.”

Market Reaction and Share Movement

Following this announcement, TKO shares surged over 15%, bolstered further by the news that Dwayne Johnson, the actor and former wrestling superstar, would join its board of directors. Meanwhile, Netflix shares experienced a 1% increase ahead of its fourth-quarter earnings report.

Netflix’s Strategic Shift and Revenue Goals

Netflix, aiming to boost revenue by curbing subscription sharing and promoting its ad-tier membership, historically made few attempts at live programming. Adding “Raw,” a three-hour live program per week currently airing on the USA Network, marks a significant shift in Netflix’s content strategy.

TKO’s Perspective and Potential Impact

TKO President and COO Mark Shapiro hailed the deal as a “super game changer,” comparing it to pivotal moments in sports media history. This partnership brings WWE wrestling, a global phenomenon, to approximately 250 million Netflix subscribers.

Netflix’s Exploration of Sports Content

While Netflix has ventured into sports with documentary-style series covering Formula One and professional golf, tennis, and football, this deal opens up avenues for Netflix to explore WWE intellectual property for similar projects. With WWE’s permission, Netflix could even produce movies or series centered around WWE characters.

Strategic Decision and Netflix’s Global Appeal

TKO considered various media companies but ultimately chose Netflix in December due to its unparalleled global footprint, surpassing all other streaming services. Netflix’s reach, marketing capabilities, and positioning were highlighted as key draws by TKO President Mark Shapiro.

Addressing Ad-Tier Challenges

With Netflix’s recent introduction of an advertising tier boasting 23 million monthly active users, matches on “Raw” will be strategically scripted around commercial breaks to cater to both ad-free customers and those opting for the ad-supported tier.

Technological Confidence and Industry Precedents

Despite Netflix’s limited history in live sports, Shapiro expressed confidence in Netflix’s technological capabilities, citing Amazon’s seamless streaming of “Thursday Night Football” and Peacock’s success with NFL playoff games. This move signals Netflix’s willingness to adapt and explore new content horizons.

In conclusion, Netflix’s groundbreaking deal to air WWE’s “Raw” signifies a pivotal moment in the streaming landscape. The collaboration opens up new opportunities for both Netflix and WWE, marking a strategic shift for the streaming giant as it delves into the world of live sports, with “Raw” poised to become a cornerstone of Netflix’s diverse content portfolio.