➡️ Subscribers have exclusive access to reports like this for 90 days after publishing. SIGNUP NOW.

Estimating the value of AEW’s amended current TV deal

At the press conference after Double or Nothing, Tony Khan confirmed that AEW is getting incremental licensing fees due to the addition of Collision as a new weekly program. As he did on Thursday’s media call, he said the length of AEW’s current deal hasn’t changed.

“We got a new contract, I think it’s fair to say,” Khan said on Sunday night. “It’s more money but it’s the same length of time.”

The current deal will reportedly expire at the end of this year, or if the option is picked up by WBD, at the end of 2024. This indicates there was no renewed deal TV deal made around the time of WBD’s upfront presentation earlier this month, despite at least one report that there would be a new term and despite rumors that such a deal could be worth as much as $1.2 billion over five years.

Khan said he’s optimistic about Collision TV ratings.

“So I think [Collision TV ratings] can do better than the best Dynamites on Saturday,” he said.

“And if we lock in a time slot and say, ‘We’re doing this every week,’ I think we can do those numbers or better.”

Dynamite was on Saturdays with an 8 pm start time exactly three times, and all of those occasions were in 2021. The average P18-49 rating for those three telecasts was 0.24 and an average total viewership of 650,000 viewers.

I believe WBD is likely to pick up the one-year option to extend its deal with AEW through the end of 2024, if that option hasn’t already been executed. Adding Collision to the lineup signals to me that WBD is likely to try to renew AEW, but it makes sense to wait to see what kind of ratings Collision can deliver before agreeing to a new multi-year deal that includes Collision.

Certainly, there will be heightened viewership for the first episode built around the expectation that CM Punk will return to AEW on that show on June 17. The ratings the show averages a few months into the run is what will weigh more greatly into rights fees negotiations. That timeline, a few months after the debut of Collision, lines up with when I expect is a key negotiating period for WBD and AEW, as it’s 18 months in advance of AEW’s current deal expiring, assuming the one-year option is used. In WWE’s last two U.S. TV rights cycles (in 2014 and 2018), new deals were announced about 18 months before the expiration of the then-current deals.

I have lower expectations for Collision TV ratings once it normalizes, say, around August. For one reason, since mid-2021, cable homes are down about 10%, diminishing the reach of TNT. AEW’s fan interest overall has cooled in the last several months. That’s in part, but I don’t think completely, because of the absence of Punk, who will probably return on the first episode.

Ultimately, the star power and creative execution of the show will be the biggest factors determining whether viewers tune in. It’ll be another test of whether Khan has the discipline as a booker to produce a second weekly flagship program, a task he didn’t succeed at with Rampage, despite promising it wasn’t a B-show. That show’s viewership gradually declined, delivering lower numbers for each of its first four months throughout the end of 2021.

That WBD is paying AEW more because of Collision being added isn’t surprising. Running an additional live weekly in-ring show will add tens of millions of dollars in added expense. Khan didn’t say how much WBD is paying AEW in excess of their deal that previously paid AEW a reported average of about $44 million per year, which a tweet from Khan supports. That deal was originally made in January 2020 for Dynamite and another yet-to-be-debuted one-hour show that became Rampage.

Khan said Collision will mean added production costs for AEW.

“And now we’re not producing Dark and Elevation, so there is some cost-savings there, but overall, yeah, there will be increased costs,” he said. “But also it’ll definitely increase revenue through not only the ticket sales on Saturdays and the merch sales and all those things, but also through license fees that we’re making because of an incremental change increase our compensation for Collision.”

I believe cost savings related to no longer producing YouTube shows Dark and Dark Elevation, which were taped in studio sessions or as a part of Dynamite and Rampage tapings, are relatively minor compared to the added cost of another touring wrestling show.

I would put the incremental expenses to produce Collision every week at around $26 million annually (based on an estimate of about $500,000 in costs per week), so I believe the incremental payment has to be at least that much. That puts my belief on the new average annual value of AEW’s current deal at about $70 million.

It’s possible the exclusivity element could’ve pushed the value higher than $70 million. But I think AEW would have a strong incentive to take a mild increase on the remainder of its current deal that explores the value of a new show that could contribute to a much larger increase in fees in the next round. Whether AEW could in its next round, probably going into effect in 2025, get a deal worth as much as the rumored $200 million or $240 million will depend on many factors, including AEW’s continued TV ratings performance and whether other bidders are interested in AEW.

Additional news

WWE’s lawyers, however, defending the company against the ongoing antitrust lawsuit from MLW, are purportedly ready to believe AEW does in fact have a $240 million per year deal. WWE’s latest filing in the case, written by K&L Gates attorneys, tries to undermine MLW’s arguments, states, “As for AEW, far from being a de minimis competitor, it just expanded the sale of its media rights to WarnerBros.-Discovery (‘WBD’) for a reported $240 million per year.” WWE’s source for this “reported” deal is an aggregated story on Cultaholic, which ultimately cites an article by Wade Keller on PWTorch.com in advance of the WBD upfronts that referred to the “expected” value of the deal. WWE’s attorneys also noted that Reelz extended its initial ten-week run for MLW Underground. The deal in fact ran 13 weeks. MLW’s announcement of an agreement with FITE is also used by WWE to argue MLW is actually succeeding in the market that MLW alleges WWE has monopoly power within.
WWE and its employees are being represented by lawyer Molly Lens from the O’Melveny & Myers law firm in Los Angeles in the lawsuit filed against them by former WWE writer Britney Abrahams. Lens has experience representing clients in entertainment including Fox, Marvel, and Activision. As previously reported, Abrahams’ lawyer is Derek Sells from the Cochran Firm out of New York. The WWE side is due to answer the initial complaint by June 26.
WWE Night of Champions had higher viewership than any other Saudi Arabia event to date, 18% higher than Crown Jewel in November, which previously had the record, according to Fightful and Sports Business Journal. The show also set a new record for venue merchandise sales, according to SBJ.

TV ratings: WWE Smackdown and AEW Rampage, May 26

WWE Smackdown Friday at 8 pm on Fox, was watched by 2,158,000 viewers on average, including about 678,000 aged 18 to 49, for a 0.52 P18-49 rating.

AEW Rampage on TNT at 10 pm, was watched by 436,000 viewers on average, including about 143,000 aged 18 to 49, for a 0.11 P18-49 rating.

Smackdown ranked #1 on television overall on the day in P18-49.

Rampage ranked #13 in P18-49 among cable originals for the day, according to Showbuzz Daily. Including broadcast primetime, it ranked #23.

This was Rampage’s first airing in its normal time slot since April 7.

Compared to last week, Smackdown was up 1% in total viewership. Among viewers 18 to 49, viewership was down 2% from last week’s 695,000.

Compared to last week in preemption on Friday at 6:30 pm, Rampage was up 49% in total viewership. Among viewers 18-49, viewership was up 27%.

Viewer counts in thousands, calculated from national ratings, for this week’s episode with difference versus the median of the last 28 days in parentheses:

Smackdown:

P2+: 2158 (+1%)

P18-49: 678 (-5%)

P18-34: 218 (-7%)

P35-49: 461 (-3%)

P25-54: 840 (-5%)

Non-P18-49: 1480 (+3%)

Most-viewed YouTube videos from Smackdown, as of 3pm today:

Jimmy Uso: 1,121,163

Roman Reigns humiliates Jimmy Uso: 744,591

Cracks in The Bloodline lead to brawl with Zayn and Owens: 613,950

Problems in The Bloodline incite major SmackDown bedlam: 309,569