NXT’s TV rights value: Then, Now, on The CW

The current value of WWE’s deal with NBCUniversal to broadcast NXT live each week on the USA Network has an average annual value of $15 million, a source tells Wrestlenomics, confirming earlier reports from Deadline and PWInsider.

TKO CEO Ari Emanuel said on the company’s earnings conference call last Tuesday, Nov. 7, that the new five-year deal, which will put NXT on The CW in October 2024, represents a 70% increase in the value of NXT live rights. This implies that the average annual value of the deal with The CW is about $25 million.

What’s previously been reported about the value of NXT’s TV deal

PWInsider reported that “internally, the belief” was that the current value is $15 million, though, the outlet also referenced a “broadcast source” that “believed” the deal was worth a much higher $35 million to $37 million.

Deadline reported last week that the current annual value of NXT was $15 million. Writing before Emanuel revealed the rate of increase for the CW deal was 70%, Deadline said it heard the new deal was worth “more than double” $15 million, which doesn’t seem to be the case

Sports Business Journal wrote last week that “NXT makes somewhere between $30 million and $50 million per year, per source”. It seems possible NXT has a global revenue contribution of $30 million to $50 million when counting up domestic and international media values and other revenues, which could explain that figure.

Going back further, there were many reports and financial estimates from stock analysts in 2019 that put the value of the NXT deal a lot higher than $15 million. The Wrestling Observer Newsletter reported at that time that the value was $30 million to $50 million, as SBJ did last week. Eric Handler at MKM Partners estimated the value at $50 million to $100 million when the move to USA happened. Guggenheim’s Curry Baker estimated $30 million. David Karnovsky from JP Morgan estimated $70 million.

When analyzing WWE’s reported finances over the years, I regularly tried to estimate the value of all revenue sources the company included under its “Core content rights fees” sub-segment — rights fees domestically and internationally — and found it difficult to fit annualized fees for NXT in the neighborhood of $30 million or higher beginning in late 2019. In other words, $15 million per year makes a lot more sense mathematically.

Why $15 million or an amount close to it was probably the value each year for NXT on USA and not just the value for the final year

The move to USA didn’t seem to come with greatly increased expenses that would offset a major increase in revenue. Before and after, NXT was produced at one location at Full Sail University and, later, at the Performance Center, which minimizes production expenses. Minimal increases to expenses and possibly significant increases to revenues — going from no direct revenue on the WWE Network to some revenue on USA — was the cause of stock analyst questions about whether the NXT TV deal was a profit contributor that needed to be considered in analysts’ estimates.

In October 2019, soon after NXT made the move, then-WWE co-president George Barrios was asked on an earnings call.

“We haven’t talked about the economics of NXT,” Barrios said. “I think if you remember the [press] release when we announced [the deal], we said that we were doing this for the long term.”

The comment Barrios probably referred to from the August 2019 press release was a quote from Vince McMahon.

“The move to USA Network provides an opportunity to deepen our relationship with NBCUniversal and further build the NXT brand,” Vince said in the announcement. “Over the long term our goal is to develop a following that can be monetized to the same level as our flagship programs, Raw and Smackdown.”

Barrios’ evasive response emphasizing the move was being done “for the long term” didn’t sound like language consistent with a licensing deal that meant significant incremental profitability, or one that had an average annual value much greater than $15 million.

Consider WWE reported $960 million in revenue for 2019. Annually, $15 million is less than 2% of $960 million, so it seems possible a deal with that value didn’t mean analysts needed to be nudged to make major changes to their financial models.

But, wait, NXT was subsequently renewed by NBCUniversal in 2021. Did that renewal coincide with an increase in fees? I doubt it.

On the next earnings call after the extension was announced in the spring of 2021, WWE’s chief financial officer at the time, Kristina Salen, was asked about the value of the NXT deal.

“With regards to NXT, yes, NXT was expected, obviously because the contract was up and it is within our guidance range that we provided,” Salen said. “So there’s no, there’s — we’re really pleased with that result. But there’s nothing to update with regard to guidance on that front.”

The guidance Salen was talking about was WWE’s estimates about its profitability in future reporting periods. The new deal didn’t change what the company was projecting about those expectations concerning its overall financial results. So it sounds like the NXT deal didn’t receive much, if any, upgrade in compensation in 2021.

A few months later, in September, was the “2.0” revamp of NXT, coinciding with many of Paul Levesque’s associates who worked with him on NXT being removed from the company. It was almost as if NXT had been a disappointment or otherwise needed remedy, moves inconsistent with a show that might’ve just earned a better TV deal.

NXT was apparently renewed again this year, in 2023, extending the show’s stay on USA Network through next September. There’s less information to support the notion that NXT didn’t get an increase for this final one-year term, though it’s hard to see what the incentive would be for NBCU to do so. The extension is apparently for one year, not a longer-term agreement, and allows WWE the strategic advantage of having NXT’s term expire at the same time as the more valuable Raw and Smackdown rights.

How does the NXT deal compare to other rights deals for wrestling programs?

The current deal with NBCU for Raw is worth $265 million. That deal expires in October next year also. The new Smackdown deal putting that show back on USA Network next year is valued at a reported $287 million. Fox has been paying $205 million per year for Smackdown since 2019. The rights to WWE’s premium live events and library content on Peacock are worth $200 million per year.

AEW’s four-year deal with Warner Bros. Discovery for Dynamite and Rampage is worth about $44 million per year, according to a tweet from Tony Khan, when he said the deal was worth $175 million over the entire term. With a one-year option likely being picked up by WBD, the deal will expire in late 2024. Khan said at a press conference in May that the addition of Collision to AEW’s weekly schedule coincided with an increase in payment from WBD. I believe it would cost around $500,000 per week to produce an additional touring show or about $26 million per year. So I estimate the current annual compensation from WBD for all AEW content to be around $70 million domestically.

WWE doesn’t historically disclose the value of its TV deals on the record, as the company didn’t in the case of the new NXT deal. The value of the Raw and Smackdown in the prior rights cycle was reported by The Hollywood Reporter in 2018. The Wall Street Journal and Sports Business Journal reported the value of the Peacock deal. CNBC and The Wall Street Journal reported the value of the latest Smackdown agreement.

It’s worth noting these values account for domestic compensation only and don’t include payment for various international media deals that distribute WWE and AEW programs in numerous countries around the world. WWE also licenses next-day rights domestically, currently held by Hulu.

We discussed NXT’s new deal and more on the latest episode of Wrestlenomics Radio.

Brandon Thurston


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

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