TKO Group Holdings — the merged company with the UFC and WWE — officially locked down its first major broadcast rights deal after taking the company public.
On Thursday, TKO announced that WWE Smackdown would be moving from FOX to the USA Network (part of NBCUniversal) in a new five-year deal that will kick off in October 2024. In addition to the broadcast rights for Smackdown, WWE will produce four primetime specials per year that will air on the main NBC network.
The five-year deal is reportedly worth $287 million per year with a total value at over $1.4 billion, according to CNBC.
The move for Smackdown will also apparently mark the end of a long run for WWE’s flagship program Monday Night Raw on USA Network. According to The Hollywood Reporter, TKO will shop Raw and NXT — a feeder promotion also operated by WWE — to a new network under a different broadcast rights deal.
It’s been expected that WWE would announce new broadcast rights deals sooner rather than later after the merger with UFC to become TKO Group Holdings was made official in September. TKO and Endeavor president Mark Shapiro previously addressed the importance of the broadcast rights deals as they prepared to merge WWE and UFC under one banner with the new company.
“Your goal is to maximize price, let’s be clear about that,” Shapiro said in May. “In any renegotiation that [WWE president] Nick Khan is doing in WWE, his goal is to maximize price. Our goal with UFC is to maximize price.”
Negotiations for WWE Raw and NXT are reportedly “extremely active” with several interested parties including both linear television networks as well as potential streaming partners.
Once that deal gets locked down, TKO will then shift gears to focus on the UFC broadcast rights deal, which currently sits with ESPN through 2025. Typically negotiations for broadcast rights deals start approximately one year before the current contract expires so it’s likely TKO will finalize a deal for the UFC sometime in 2024.
ESPN inked a lucrative multi-year deal to bring the UFC over from FOX before eventually adding pay-per-view broadcasts as part of an extended contract. UFC PPV’s now air exclusively through ESPN+, which is ESPN’s premium subscription streaming service.
TKO and Endeavor CEO Ari Emanuel praised the relationship the UFC has built with ESPN since that partnership was first struck but he also maintained that the company will explore all options when it comes to a new broadcast rights deal.
“We have a great relationship with ESPN, love our relationship with them, and we have a year left until we can start our renewal,” Emanuel said in March. “I think it’s going to be a positive outcome for both parties but there’s a lot of buyers out there.”
Of course, ESPN also faces uncertainty with the company’s owners at Disney currently seeking “strategic partners” to buy into the business. Disney CEO Bob Iger previously stated that linear TV “may not be core” to the company’s objectives in the future while adding that he expects to shift solely to “direct-to-consumer,” which means streaming — likely via ESPN+.
The UFC has been a massive part of the growth of ESPN+ since moving to the network while building up to 25.2 million subscribers as of the most recent fiscal disclosure in August.
Despite the announcement of the new broadcast rights deal for WWE, TKO Group Holdings stock actually dropped 12 percent on Thursday at $88.76 in early trading. The stock opened at $102 per share when TKO officially went public on Sept. 12.
