Analysis: Thursday Night Football ratings are good news for WWE TV rights value

Multi-plot column chart figure, showing viewership for NFL Week 2 through Week 9, comparing Thursday Night Football, Monday Night Football, and Sunday Night Football.

More young adults are sometimes watching Thursday Night Football on Amazon Prime Video than Monday Night Football and ESPN and ESPN2. 

In total viewership, MNF has been ahead of TNF every week of the NFL season so far, but TNF beat MNF in P18-49 in Weeks 4 and 8, and they virtually tied for Week 9. 

Younger viewers are presumably a leading indicator of future television trends. This should give WWE, and other content providers considering selling live sports rights to Amazon or possibly other streaming platforms, some reassurance that Prime Video provides substantial reach value which should only improve over time. The first Nielsen measurements of live sports of this size on a streaming platform show streaming need not be merely the home for scripted and unscripted programming that can be watched at any time, but it can be a medium for huge live audiences as well.

Based on comments on last week’s earnings call, WWE I believe took a low revenue renewal with Hulu for next-day rights to Raw so that those rights will expire at the same time as live rights in the U.S. Next-day rights to Smackdown, which are sublicensed by Fox to Hulu, I believe also expire in line with live rights, in September 2024. This should allow WWE to more favorably negotiate with streamers like Amazon who would naturally want next-day rights when considering live rights.

The viability of Amazon buying Raw or Smackdown should better allow WWE to leverage a favorable TV rights upgrade. I expect at least one of the shows to stay on traditional TV, most likely Raw because of the depth of WWE’s relationship with NBCU. Smackdown going to Amazon is a real possibility. Even if it doesn’t happen, the notion makes enough sense to cause NBCU, Fox, and possibly others to bid more aggressively. I believe WWE has an exclusive negotiating period with both NBCU and Fox for Raw and Smackdown, respectively. Even if neither show goes to the open market, the prospect of Amazon may encourage either network to make WWE a good enough offer to finalize a deal in the exclusive window.

Given the less lengthy relationship between WWE and Fox and rumblings that Fox may not be satisfied with ratings for Smackdown, I believe Smackdown is more likely to go to the open market. I believe WWE will start serious negotiations for its live rights just after Wrestlemania in April. Deals could be completed within months of that start time.

I see NBCU, Fox, and Amazon as the most serious potential bidders. I don’t believe Apple will make an aggressive attempt to associate its brand with pro wrestling and the stigma that comes with it. I rule out Warner Brothers Discovery based on the assumption they’ll retain AEW content in at least some form.

It’s plausible Paramount could make a bid if either property reaches the open market, but a network fit isn’t obvious; MTV and the Paramount Network would be the two likeliest fits. Paramount+ isn’t proven with live sports beyond as a streaming supplement for CBS.

Raw or Smackdown couldn’t possibly take priority on the ESPN mothership. ESPN2 is more plausible but would be a step down in reach and profile. If Disney is willing to pay to offset reach in the short term, ESPN+ could make sense. Still, it’s been decades since ESPN regularly aired in-ring pro wrestling content. There may be unhealed wounds too from WWE choosing Peacock over ESPN+ in 2021.

I don’t believe macroeconomic headwinds, including recession, will precipitate an unprecedented reduction in value for live sports rights.

The exponential growth of sports rights fees in trailing decades is largely the result of — not Vince McMahon’s creative genius, but — the proliferation and evolution of media, which is indifferent to economic cycles, and continues to increase entertainment options while fragmenting audience sizes. That exacerbates the value between the haves and have-nots of content. Suitors compete for a few reliable, highly-popular sports properties, which are exponentially more highly viewed than other content further down the strata.

Economic hardship may well provide potential buyers with a sad sap story about why they should pay a lower upgrade rather than a higher upgrade, but I believe someone will still be paying a sizable upgrade when the agreement is made, as multiple suitors need those rare highly-viewed programs to justify their business models. And if their business models are in decline (traditional TV), they need the best content to invest consumer behavior on their new platforms (streaming) if their businesses will thrive in the future. Though I readily anticipate consolidation or acquisition of traditional players Fox, Paramount, NBCU, and WBD seems inevitable.

The entrance into the market of companies that don’t originally rely on content, for whom content is a pivot into a new venture (Amazon and Apple), have greater businesses that can subsidize their investments. A reduction in suitors because of further consolidation I expect to be offset by tech companies’ increasing participation in this market.

Disclosure: I’m long on Amazon (NASDAQ: AMZN) and Apple (NASDAQ: AAPL). I have no positions in WWE (NYSE: WWE) and have no plans to initiate any such positions.

Brandon Thurston has written about wrestling business since 2015. He’s also worked as an independent wrestler and trainer.

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