- Joined
- Feb 10, 2012
- Messages
- 6,691
- Reaction score
- 1,927
- Points
- 0
- Age
- 36
- Location
- Union City, Tennessee
If USA Network wants to retain its biggest hit, “Monday Night Raw,” it’s gonna have to pay.
Next month, for the first time, WWE will shop the rights to “Raw” and all of its shows at the same time — a list of weekly series that includes Syfy’s “Friday Night SmackDown,” “Main Event” on ION Television, the CW’s “Saturday Morning Slam” and reality show “Total Divas” on E!
The goal is to significantly increase the $139.5 million in TV licensing fees WWE earns each year for its shows, and attempt to get closer to the rich network deals that sports organizations like the NBA, NHL NASCAR, as well as soccer command.
In the past, deals for WWE’s series were brokered individually on a staggered timeline, usually every three to four years or so. But WWE has spent nearly two years quietly lining up rights to expire simultaneously in an effort to secure higher fees and appease shareholders who have grown increasingly frustrated that the company’s TV deals are not worth more at a time when live “event” programming is more valuable than ever.
By offering up all its shows at once, “We’re letting the marketplace determine if it’s interested in all or pieces,” says Michelle Wilson, WWE’s chief revenue and marketing officer. The company also is tackling a self-inflicted perception problem. For years, it’s touted its over-the-top characters and soap opera storylines ahead of the live aspect of the year-round action in the ring.
“We’ve had to evolve our thinking,” Wilson says. “We are clearly entertainment-based, but if you think about the characteristics of our brand, it’s live action, and that’s sports. We want to be compensated for a live audience, since live content is getting a very significant premium in the marketplace.”
The company cites Nascar’s impressive dealmaking this summer as an example. The racing league secured a new 10-year deal with NBC and Fox worth $820 million a year. And that increase came in the face of declining ratings for many of its races. WWE argues that “Raw” and “SmackDown” alone are just as attractive, with a rabid fanbase that’s helped build networks, and its series are diverse in ethnicity and age.
Combined, the shows air 156 episodes a year that average a 2.2 household rating. Nascar airs 154 races and averages a 1.38 household rating among viewers, who are 92% white and over 50. WWE’s audience is far more diverse and broken out fairly evenly among age groups. A selling point is that 44% of them are under 34.
That’s helped boost gross ratings points, something Madison Avenue keeps a close eye on. Another plus for WWE: 90% of “Raw’s” and “SmackDown’s” viewers watch the shows live or within the next day, making the shows DVR proof. (Think NBC’s latest stunt with “The Sound of Music”.)
“The value of live content has gone from becoming important to essential,” says George Barrios, WWE’s chief strategy and financial officer. “As a network, if you don’t have live must-see content your existence comes into question.”
To make its show more attractive, WWE is considering a live version of its two-hour “SmackDown,” which currently is taped on Tuesday before its Friday airing. To do that, costs to produce the series would increase, due to scheduling, and the show would likely need to move to a new night. But WWE would be willing to make the switch in return for a better fee for the series.
WWE added a third hour to “Raw” last year (starting with its 1,000th episode) in an effort to expand storylines, increase exposure for its stars, but also enable USA to generate more advertising revenue after three-hour specials performed well.
The Stamford, Conn.-based company ideally would like to partner with a conglomerate that owns a variety of channels the way NBCU currently airs many of WWE’s shows. Along with “Raw,” “SmackDown” and “Total Divas,” specials like “Tribute to the Troops” and a shortened version of its annual “WrestleMania” pay-per-view also air on NBC. WWE already has reached out to or held meetings with the expected list of players who own a variety of channels hungry for programming, including A&E, Disney, Viacom, 21st Century Fox and Discovery.
Negotiations and bids can’t take place until Feb. 15, when NBCU accepts or rejects WWE’s final offer; other bids are due Feb. 28, with WWE set to select its media partners by March 4. Should a new deal with another conglom happen, WWE’s shows wouldn’t move to a new network until October.
Yet even as WWE makes the rounds of media congloms, industry insiders say they believe there is no way that NBCUniversal will loosen its grip on WWE. “Monday Night Raw” is a huge contributor to USA’s bottom line and weekly ratings stats; without “Raw” on its schedule, USA Network would drop from first place to as low as No. 4 among basic entertainment networks, costing the company premium advertising dollars. Syfy would also lose a sizable audience without “SmackDown,” which has raised viewership by 35% for the network. “Divas” is a hit for E! but has perhaps has benefitted WWE more, given that it’s helped the company attract more women, which currently make up around 35% of its audience.
The third hour of “Raw” is up 44% vs. programming that aired in the timeslot last year. “Saturday Morning Slam” is up 34% for the CW, “Main Event” is up 25% for ION and “Divas” has boosted ratings 166% for E!
WWE’s pay-per-views, including annual juggernauts “WrestleMania” and “SummerSlam” won’t be part of the negotiations, since those will air on the company’s new subscription-based WWE Network, which will also include original series and access to the company’s VOD library. Launch plans for the channel, which WWE sees as its own NFL Network, have yet to be revealed. However, WWE maintains that it could break even on the venture if it can sign up 800,000 to 1 million subscribers willing to pay around $10 to $14 per month.
Digital next-day rights to shows would also become part of any new licensing deal with a TV network, costing Hulu Plus the programming it currently airs. In the past, TV Everywhere wasn’t a hot topic for networks when WWE inked its current network deals.
“Partners who pay licensing fees are now expecting to get the TV Everywhere distribution rights,” Barrios says.
As it tries to land a better deal, WWE is ready to flex some of its marketing muscle, eager to show off how it’s been able to attract more high-profile advertisers to sponsor its PPVs and tie-in with its wrestlers, known as Superstars. Those now include General Motors, Ford Motor Co., Disney, Doritos, DreamWorks, Paramount, Kmart, Subway, Taco Bell, Colgate, Frito-Lay, Schick and Mattel — attractive to any network, since the channels are the entities that sell and earn the ad dollars. WWE controls PPV sponsorships, digital ad sales and talent appearances.
Other revenue streams also must be taken into consideration. WWE’s social media teams also connect with millions of fans daily, while its magazine, websites, toy lines, YouTube channel (for which it produces 10 to 12 hours of original programming a year) and videogames are popular — and ratings rise for shows that feature WWE’s talent roster, including John Cena (see above), as guest stars.
“WWE is a proven ratings juggernaut, making USA Network No. 1 for the past eight years and delivering more average viewers than every sports property, with the exception of the NFL,” said WWE chairman and CEO Vince McMahon in a statement to Variety. “Given the increasing demand for live, DVR-proof content, we believe the market will value our programming significantly above where we’ve been in the past.”
Adds Wilson of the upcoming negotiations: “This is new territory we’re in. All of the things we’ve done over the last five years have helped raise the profile of our brand and there’s recognition from the marketplace of what we deliver. Now it’s up to the marketplace to tell us if we’re worth it.”
- Variety
Next month, for the first time, WWE will shop the rights to “Raw” and all of its shows at the same time — a list of weekly series that includes Syfy’s “Friday Night SmackDown,” “Main Event” on ION Television, the CW’s “Saturday Morning Slam” and reality show “Total Divas” on E!
The goal is to significantly increase the $139.5 million in TV licensing fees WWE earns each year for its shows, and attempt to get closer to the rich network deals that sports organizations like the NBA, NHL NASCAR, as well as soccer command.
In the past, deals for WWE’s series were brokered individually on a staggered timeline, usually every three to four years or so. But WWE has spent nearly two years quietly lining up rights to expire simultaneously in an effort to secure higher fees and appease shareholders who have grown increasingly frustrated that the company’s TV deals are not worth more at a time when live “event” programming is more valuable than ever.
By offering up all its shows at once, “We’re letting the marketplace determine if it’s interested in all or pieces,” says Michelle Wilson, WWE’s chief revenue and marketing officer. The company also is tackling a self-inflicted perception problem. For years, it’s touted its over-the-top characters and soap opera storylines ahead of the live aspect of the year-round action in the ring.
“We’ve had to evolve our thinking,” Wilson says. “We are clearly entertainment-based, but if you think about the characteristics of our brand, it’s live action, and that’s sports. We want to be compensated for a live audience, since live content is getting a very significant premium in the marketplace.”
The company cites Nascar’s impressive dealmaking this summer as an example. The racing league secured a new 10-year deal with NBC and Fox worth $820 million a year. And that increase came in the face of declining ratings for many of its races. WWE argues that “Raw” and “SmackDown” alone are just as attractive, with a rabid fanbase that’s helped build networks, and its series are diverse in ethnicity and age.
Combined, the shows air 156 episodes a year that average a 2.2 household rating. Nascar airs 154 races and averages a 1.38 household rating among viewers, who are 92% white and over 50. WWE’s audience is far more diverse and broken out fairly evenly among age groups. A selling point is that 44% of them are under 34.
That’s helped boost gross ratings points, something Madison Avenue keeps a close eye on. Another plus for WWE: 90% of “Raw’s” and “SmackDown’s” viewers watch the shows live or within the next day, making the shows DVR proof. (Think NBC’s latest stunt with “The Sound of Music”.)
“The value of live content has gone from becoming important to essential,” says George Barrios, WWE’s chief strategy and financial officer. “As a network, if you don’t have live must-see content your existence comes into question.”
To make its show more attractive, WWE is considering a live version of its two-hour “SmackDown,” which currently is taped on Tuesday before its Friday airing. To do that, costs to produce the series would increase, due to scheduling, and the show would likely need to move to a new night. But WWE would be willing to make the switch in return for a better fee for the series.
WWE added a third hour to “Raw” last year (starting with its 1,000th episode) in an effort to expand storylines, increase exposure for its stars, but also enable USA to generate more advertising revenue after three-hour specials performed well.
The Stamford, Conn.-based company ideally would like to partner with a conglomerate that owns a variety of channels the way NBCU currently airs many of WWE’s shows. Along with “Raw,” “SmackDown” and “Total Divas,” specials like “Tribute to the Troops” and a shortened version of its annual “WrestleMania” pay-per-view also air on NBC. WWE already has reached out to or held meetings with the expected list of players who own a variety of channels hungry for programming, including A&E, Disney, Viacom, 21st Century Fox and Discovery.
Negotiations and bids can’t take place until Feb. 15, when NBCU accepts or rejects WWE’s final offer; other bids are due Feb. 28, with WWE set to select its media partners by March 4. Should a new deal with another conglom happen, WWE’s shows wouldn’t move to a new network until October.
Yet even as WWE makes the rounds of media congloms, industry insiders say they believe there is no way that NBCUniversal will loosen its grip on WWE. “Monday Night Raw” is a huge contributor to USA’s bottom line and weekly ratings stats; without “Raw” on its schedule, USA Network would drop from first place to as low as No. 4 among basic entertainment networks, costing the company premium advertising dollars. Syfy would also lose a sizable audience without “SmackDown,” which has raised viewership by 35% for the network. “Divas” is a hit for E! but has perhaps has benefitted WWE more, given that it’s helped the company attract more women, which currently make up around 35% of its audience.
The third hour of “Raw” is up 44% vs. programming that aired in the timeslot last year. “Saturday Morning Slam” is up 34% for the CW, “Main Event” is up 25% for ION and “Divas” has boosted ratings 166% for E!
WWE’s pay-per-views, including annual juggernauts “WrestleMania” and “SummerSlam” won’t be part of the negotiations, since those will air on the company’s new subscription-based WWE Network, which will also include original series and access to the company’s VOD library. Launch plans for the channel, which WWE sees as its own NFL Network, have yet to be revealed. However, WWE maintains that it could break even on the venture if it can sign up 800,000 to 1 million subscribers willing to pay around $10 to $14 per month.
Digital next-day rights to shows would also become part of any new licensing deal with a TV network, costing Hulu Plus the programming it currently airs. In the past, TV Everywhere wasn’t a hot topic for networks when WWE inked its current network deals.
“Partners who pay licensing fees are now expecting to get the TV Everywhere distribution rights,” Barrios says.
As it tries to land a better deal, WWE is ready to flex some of its marketing muscle, eager to show off how it’s been able to attract more high-profile advertisers to sponsor its PPVs and tie-in with its wrestlers, known as Superstars. Those now include General Motors, Ford Motor Co., Disney, Doritos, DreamWorks, Paramount, Kmart, Subway, Taco Bell, Colgate, Frito-Lay, Schick and Mattel — attractive to any network, since the channels are the entities that sell and earn the ad dollars. WWE controls PPV sponsorships, digital ad sales and talent appearances.
Other revenue streams also must be taken into consideration. WWE’s social media teams also connect with millions of fans daily, while its magazine, websites, toy lines, YouTube channel (for which it produces 10 to 12 hours of original programming a year) and videogames are popular — and ratings rise for shows that feature WWE’s talent roster, including John Cena (see above), as guest stars.
“WWE is a proven ratings juggernaut, making USA Network No. 1 for the past eight years and delivering more average viewers than every sports property, with the exception of the NFL,” said WWE chairman and CEO Vince McMahon in a statement to Variety. “Given the increasing demand for live, DVR-proof content, we believe the market will value our programming significantly above where we’ve been in the past.”
Adds Wilson of the upcoming negotiations: “This is new territory we’re in. All of the things we’ve done over the last five years have helped raise the profile of our brand and there’s recognition from the marketplace of what we deliver. Now it’s up to the marketplace to tell us if we’re worth it.”
- Variety
