WWE TV Rights Deal

[mookeighana]

In my WhatCulture piece about hypothetically who'd want to buy WWE if they somehow were able to be acquired (Vince controls class B shares so hostile takeover is impossible) I threw in a couple charts about what stations are owned by each : http://whatculture.com/wwe/5-companies-want-buy-wwe.php

 

Someone on Bloomberg had a similar idea: http://www.bloomberg.com/news/2014-03-16/wwe-free-for-all-awaits-if-found-sets-sale-real-m-a.html

Includes some Analyst quotes.

[jdw]

It's highly unlikely that Vince is going to sell the company, but some reference points on recent Disney purchases of "content providers":

 

Marvel - $4.64B - Aug 2009
$676M 2008 Revenue
$205M 2008 Net Income

 

Pixar: $7.4B - May 2006
$289M 2005 Revenue
$153M 2005 Net Income

 

LucasFilms: $4.06B - Oct 2012

$1.5B 2011 Estimated Revenue

 

The WWE's 2013 revenue was $508M with a net income of $2.7M, though that down from the $31M they did the year before. The WWE does pay out a decent amount in dividends, but it's not like people weren't finding ways to suck money out of Marvel and Pixar in various ways (which is a large point of the dividends giving Vince a way to suck money out).

 

Point: WWE revenues are pretty good, and of course would go up with the Network and the new TV deals. But... Pixar and Marvel were cash cows with rather rich Revenue/Profit ratios. In turn, a massive amount of Pixar's revenue was actually coming out of Disney's pockets as the distributor of the movies: buying Pixar let Disney keep money.

 

LucasFilm's revenues and profits... who knows. That 2011 number could be high as it was from a firm that estimates revenue of private firms. It's worth noting it was at a time when LucasFilm had no movies out in the year, though various reports indicated the they were still making a killing on licensing in 2011 without it. LucasFilm also has units like ILM that do a ton of work in films, and when you look at skyrocketing costs of films, SFX and other stuff like what they do at LF is one of the reasons. My guess is that revenue number is likely a bit too high, but that LF was also a rather profitable little company and of course Disney saw *easy* was to pull in revenue to pay off that purchases (i.e. instantly announcing they will regularly be making new movies).

 

WWE is a slightly different beast from those.

[Guest The Jiz]

http://seekingalpha.com/article/2093303-the-short-case-for-world-wrestling-entertainment?isDirectRoadblock=false&source=email_rtarticle_readmore@uprof=53

 

Interesting article

[jdw]

Th

 

http://seekingalpha.com/article/2093303-the-short-case-for-world-wrestling-entertainment?isDirectRoadblock=false&source=email_rtarticle_readmore@uprof=53

 

Interesting article

 

That is fucking brutal.

[mookeighana]

This morning, I wrote up my thoughts on the five alleged contenders for the WWE TV contract (NBCU, Viacom, Fox, AMC and Turner) in this new WhatCulture article: http://whatculture.com/wwe/wwe-analysing-5-networks-wwe-negotiating-tv-rights.php

[jdw]

This morning, I wrote up my thoughts on the five alleged contenders for the WWE TV contract (NBCU, Viacom, Fox, AMC and Turner) in this new WhatCulture article: http://whatculture.com/wwe/wwe-analysing-5-networks-wwe-negotiating-tv-rights.php

 

Chris - you might want to add to this one section:

 

Additionally, Fox may be saving their money so they can bid heavily on the upcoming NBA rights, and are particularly hopeful they can yank them away from Turner (TNT).

 

 

The other major sports contract out there after the NBA is the Big 10:

 

http://espn.go.com/blog/playbook/dollars/post/_/id/3163/a-comparison-conference-television-deals

 

BIG TEN

First-tier rights: $1 billion, ESPN, 10 years through 2016-17

Second-tier rights: $2.8 billion, Big Ten Network, 25 years through 2031-32

Select basketball rights: (minimum of 24 games, men’s tournament semifinal and championship games): $72 million, CBS, six years through 2016-17

Football championship game: $145 million, FOX, six years through 2016

Per-year average: $248.2 million

Per-school, per-pear average: $20.7 million

 

 

The rights to the SEC, PAC, ACC and Big 12 are all locked up into the next decade. This is the last major prize out there after the NBA is off the table.

 

It's also worth noting that ESPN has their hands in everyone else. Fox has pieces of the PAC and B12, so it doesn't "have" to get this like say NBCU does if they bomb out on the NBA. But since ESPN has a piece of *everyone*, and some of them exclusive (ACC) or major-in-bed (SEC), this is one that either Fox or NBC badly want.

 

In addition, always keep in mind who the partners of the Big 10 are in the Big 10 Network, along with the Big 10's past annoyance at ESPN and their negotiating tactics.

 

The other increasing-in-cost rights that Fox will likely chase when they come up is the next EPL contract. The current one covers the 2013/14 - 2015/16 seasons. NBC won them in Oct 2012, stealing them from Fox. The next deal will likely be finalized in late 2015. Why might Fox want to get back in the EPL business?

 

* NBC appears to be doing good business with the new deal

* non-conflicting scheduling (most games are early before other Fox sports)

* World Cup lead in

 

Remember that Fox stole the World Cup from ESPN. No, not the one this summer but the 2018 & 2022 ones. Next EPL deal is likely to be 2016/17 - 2018/19. How does that work?

 

2016/17 EPL Season

2017/18 EPL Season

2018 World Cup

2018/19 EPL Season

 

Pretty much the perfect way to lead into the World Cup in 2018 is to have the EPL in the two seasons leading into it.

 

So anyway...

 

You might want to amend it to say that Fox might be saving their money to grab a pieces of one or more of the up coming sports right packages: the NBA, the Big 10 and/or next EPL contract leading into the 2018 World Cup.

[jdw]

Also - you're using the TWC logo rather than Time Warner's (TBS/TNT).

 

http://www.timewarner.com

 

[Kronos]

 

This morning, I wrote up my thoughts on the five alleged contenders for the WWE TV contract (NBCU, Viacom, Fox, AMC and Turner) in this new WhatCulture article: http://whatculture.com/wwe/wwe-analysing-5-networks-wwe-negotiating-tv-rights.php

 

Chris - you might want to add to this one section:

 

Additionally, Fox may be saving their money so they can bid heavily on the upcoming NBA rights, and are particularly hopeful they can yank them away from Turner (TNT).

 

 

The other major sports contract out there after the NBA is the Big 10:

 

http://espn.go.com/blog/playbook/dollars/post/_/id/3163/a-comparison-conference-television-deals

 

BIG TEN

First-tier rights: $1 billion, ESPN, 10 years through 2016-17

Second-tier rights: $2.8 billion, Big Ten Network, 25 years through 2031-32

Select basketball rights: (minimum of 24 games, men’s tournament semifinal and championship games): $72 million, CBS, six years through 2016-17

Football championship game: $145 million, FOX, six years through 2016

Per-year average: $248.2 million

Per-school, per-pear average: $20.7 million

 

 

The rights to the SEC, PAC, ACC and Big 12 are all locked up into the next decade. This is the last major prize out there after the NBA is off the table.

 

It's also worth noting that ESPN has their hands in everyone else. Fox has pieces of the PAC and B12, so it doesn't "have" to get this like say NBCU does if they bomb out on the NBA. But since ESPN has a piece of *everyone*, and some of them exclusive (ACC) or major-in-bed (SEC), this is one that either Fox or NBC badly want.

 

In addition, always keep in mind who the partners of the Big 10 are in the Big 10 Network, along with the Big 10's past annoyance at ESPN and their negotiating tactics.

 

The other increasing-in-cost rights that Fox will likely chase when they come up is the next EPL contract. The current one covers the 2013/14 - 2015/16 seasons. NBC won them in Oct 2012, stealing them from Fox. The next deal will likely be finalized in late 2015. Why might Fox want to get back in the EPL business?

 

* NBC appears to be doing good business with the new deal

* non-conflicting scheduling (most games are early before other Fox sports)

* World Cup lead in

 

Remember that Fox stole the World Cup from ESPN. No, not the one this summer but the 2018 & 2022 ones. Next EPL deal is likely to be 2016/17 - 2018/19. How does that work?

 

2016/17 EPL Season

2017/18 EPL Season

2018 World Cup

2018/19 EPL Season

 

Pretty much the perfect way to lead into the World Cup in 2018 is to have the EPL in the two seasons leading into it.

 

So anyway...

 

You might want to amend it to say that Fox might be saving their money to grab a pieces of one or more of the up coming sports right packages: the NBA, the Big 10 and/or next EPL contract leading into the 2018 World Cup.

 

 

 

John, this response feels like a TOA post.

[mookeighana]

You're right on with those points!

 

The pictures were added by my editor after the fact. I emailed him to explain that TWC and TW are different companies and asked him to update the Fox with a more general blurb including points about EPL and Big Ten. We'll see if anything happens with that. Sadly, after it gets "published", I can't adjust it anymore.

[jdw]

One of the things the WWE is running up against in terms of timing:

 

http://www.sportsbusinessdaily.com/Journal/Issues/2014/03/17/Media/NBA-media.aspx

 

The key one in there, which is a direction I've thought the NBA might head for a few years, is that they might carve out a 3rd Package in addition to the current 2. We all know the rights are going to go through the roof, but the NBA may be pulling in massive commitment from 3 networks rather than just 2.

[Coffey]

I can't foresee NBA leaving TNT. Not with the popularity of Inside the NBA with Shaq, Kenny, Charles & Ernie. That show is like...the most popular show in the entire NBA, even above the damn games. It wins emmys. The players themselves do nothing but talk about that show & make guest appearances on that show, etc. Even the NBA commissioner, the old one (Stern) and the new one (Silver) are guests on the show & talk about it. I don't think it's just about money, I just straight don't think NBA themselves would leave.

 

I could see them being on a different night. I could see them adding more NBA games to another channel (like they did with NBA TV). I don't see anything happening that takes Inside the NBA off the air though. Too many people love Chuck.

[CFTV]

LL. Some people call him Uncle L because he's not exactly as young as he used to be make a name like LL Cool J seem cool.

 

LL has been calling himself Uncle L since at least 89. Jingling Baby was released on the Walking With The Panther album has a line where he says Uncle L, future of the funk.

 

Great stuff from Mookie and John looking at the next WWE TV deal!

[cm funk]

I can't foresee NBA leaving TNT. Not with the popularity of Inside the NBA with Shaq, Kenny, Charles & Ernie. That show is like...the most popular show in the entire NBA, even above the damn games. It wins emmys. The players themselves do nothing but talk about that show & make guest appearances on that show, etc. Even the NBA commissioner, the old one (Stern) and the new one (Silver) are guests on the show & talk about it. I don't think it's just about money, I just straight don't think NBA themselves would leave.

 

I could see them being on a different night. I could see them adding more NBA games to another channel (like they did with NBA TV). I don't see anything happening that takes Inside the NBA off the air though. Too many people love Chuck.

 

They've also been with TNT since 1988. It's hard to imagine them leaving TNT, or TNT letting them go, but you never know. I have to assume if they did move to a different network that Ernie, Kenny and Charles would migrate. Those guys are doing studio coverage for the NCAAs, it's not like TNT owns them. So while I can't see the thursday night TNT games changing, it wouldn't be for that reason

[mookeighana]

Last week's Wrestling Observer mentions the idea of WGN as a bidder:

 

One person following the situation closely noted that the key for WGN would be the belief adding WWE would help them expand the potential audience for the station (they are currently in about 73 million of the 99 million cable homes) and allow them to charge cable systems more for carriage, since they've got little strong programming. They are doing poor ratings but they've got money, as they are apparently the high Bidder for "Better Call Saul," a "Breaking Bad" spin-off, but didn't win out. They are currently getting less than 10 cents per home per month, but if they could increase to 90 million homes and get to 25 cents with WWE programming, that takes the station from $87.6 million in revenue from carries to $270 million. That, and ad revenue, could justify a bid well North of $250 million if they are willing to greatly overspend to build the station. It should be noted that WGN was the lone legitimate bidder in 2008 besides USA. The problem with WGN is the same as FS 1, but worse. WWE would love to get the word out they are in the game because it helps the price.

It's an interesting idea but I just don't think WWE would take the risk unless WGN was pouring money into a truck at far above the competitor's rates.

[jdw]

I doubt any of the other big players thinks WGN/Tribune is major player. Tribune is a trainwreck at the moment. They talk about splitting up into the horrid newspaper business on one end and the broadcasting on the other side. It hasn't happened yet.

 

This is something where the other big players would read it as a bluff, and dare Vince to call that bluff and go to a network and company in shaky ground and uncertain future ownership. On the flip side, Vince isn't going to run that bluff to the point of it being called and turning up an empty hand.

[goodhelmet]

 

LL. Some people call him Uncle L because he's not exactly as young as he used to be make a name like LL Cool J seem cool.

 

LL has been calling himself Uncle L since at least 89. Jingling Baby was released on the Walking With The Panther album has a line where he says Uncle L, future of the funk.

 

Great stuff from Mookie and John looking at the next WWE TV deal!

 

 

I have his greatest hits CD. By 1989, I was moving on and listening to Too Short and Eazy E.

[mookeighana]

Latest thing today was the Forbes' piece about Vince McMahon/WWE: http://www.forbes.com/sites/msolomon/2014/03/26/vince-mcmahons-over-the-top-move-why-the-billionaire-ceo-is-betting-big-on-the-new-wwe-network/

 

I wrote about my host of comments/corrections on my blog: http://indeedwrestling.blogspot.com/2014/03/fact-checking-forbes-piece-on-vince.html (they don't separate int'l/domestic, dish network is carrying WM, emerging market numbers are wacky, robert routh's 6-8 million subscriber numbers seem wild, etc.)

 

Regarding TV Rights fees:

 

He has been promising fans and investors a WWE Network since 2011, and in that time the vision for it has changed dramatically. It was first conceived as WWE’s version of the MLB or NFL Network. In theory a channel devoted to wrestling makes even more sense than a professional sports league, since, unlike baseball or football, WWE doesn’t have an off-season. (It puts on more than 300 live shows, 52 weeks a year.) But McMahon claims that model was only going to generate an anemic 20 cents per month per subscriber, roughly on par with third-tier networks like MSNBC and Bravo, $0.21 and $0.24 a month, respectively (almighty ESPN commands an astronomical $5.54 a month). So he walked away.

That's the second time I've heard specific numbers for what they would have received. The "Vince walked away" story was covered by the LA Times back in January.

[Loss]

Dave completely destroyed the 20 cents thing, but I don't remember what his argument was. But I think he felt like Vince was working the media there.

[Bix]

Dave completely destroyed the 20 cents thing, but I don't remember what his argument was. But I think he felt like Vince was working the media there.

Basically, if they got 20c per sub on a basic tier with strong national coverage, it would mean ridiculous money for WWE. There's no way they'd turn that down.

[jdw]

Exactly. I think if we go back through this board when we talk about network match, getting into 80M basic households would have been a dream for the WWE. Say they got into them at $0.20 per household. That's $192M per year.

 

Okay... say that it's not 80M, but that they launched with 40M. That's $96M.

 

Yeah, the WWE would have taken that money and ran. They frankly would have done it for $0.10 per basic household if they could have gotten on 80M homes ($92M).

 

We went round in circles here about getting on Basic and even a low end carriage fee. The WWE ran into issues of potentially being forced onto a Tier rather than Basic, and other nonsense like buying an existing channel and the WWE's seeming unwillingness to joint venture on a channel.

[Timbo Slice]

All that's well and good, but with people souring on cable in the first place and them having good money come in from RAW and SmackDown!, I always saw the OOT as hedging the bet, so to speak. They should get a decent number with the renewal, and if the subscriptions grow after WM or what have you, they'd recoup that money pretty easily. That $96M in a year can come with 8 million subscribers to the network, which while not set in stone is definitely in range.

[goodhelmet]

Where are these 8 million wrestling fans you speak of?

[mookeighana]

Where are these 8 million wrestling fans you speak of?

In Robert Routh's time machine back to 1999.

[Timbo Slice]

Yeah, the more I think about what I said...I'm gonna chalk that one up to an unbelievable amount of optimism on my part?

 

I got nothing.

[mookeighana]

All that's well and good, but with people souring on cable in the first place and them having good money come in from RAW and SmackDown!, I always saw the OOT as hedging the bet, so to speak. They should get a decent number with the renewal, and if the subscriptions grow after WM or what have you, they'd recoup that money pretty easily. That $96M in a year can come with 8 million subscribers to the network, which while not set in stone is definitely in range.

You forgot to multiple by ten. If they had 8 million annual subscribers at $10/month, they'd be getting 960M. They're hoping to get at least $96M this year from the Network (800k subscribers).