Monday, December 09, 2013

Can we predict WWE TV Rights Fees for 2015?

There's been plenty of talk from WWE about how they're expecting dramatic TV Rights Fees increases when they renegotiate key television deals set to go into effect at higher rates in 2015.
They're looking at USA (RAW), SyFy (Smackdown), UK (BSkyB), and India (Taj TV) which "represent more than two-thirds of our 2012 annual TV rights revenue".

WWE is banking on the Escalating Sports Rights Phenomenon and their large base on active, live viewers (which they feel proportional to TV Rights Fees is a steal).

The question is - how much can they realistically expect to get?

First, let's try to put TV Rights Fees into perspective. I've pulled the annual fees for the last eight years from their SEC filings and done some estimates on how many episodes of each of their major shows that they aired.



2006: $85.5M ($54.9M domestic + $30.6M int'l) in TV Rights + $7.4M in TV Advertising
* 52 episodes of RAW on USA (104 hours)
* 37 episodes of Smackdown on UPN (74 hours) + 15 episodes of Smackdown on CW (30 hours)
* 29 episodes of ECW on SciFi (29 hours)
* 53 episodes of Sunday Night Heat (shown int'l/wwe.com)
* 23 episodes of Velocity (shown int'l/wwe.com)
* 53 episodes of AM Raw on USA
* 2 episodes of SNME
* 1 episode of Tribute to the Troops

2007: $92.4M ($59.6M domestic + $32.8M int'l) in TV Rights + $5.9M in TV Advertising
* 53 episodes of RAW on USA (106 hours)
* 52 episodes of Smackdown on CW (104 hours)
* 52 episodes of ECW on SciFi (52 hours)
* 52 episodes of Sunday Night Heat (shown int'l/wwe.com)
* 52 episodes of AM Raw on USA
* 2 episodes of SNME
* 1 episode of Tribute to the Troops

2008: $100.7M ($63.5M domestic + $37.2M int'l) in TV Rights + $7.4M in TV Advertising
* 52 episodes of RAW on USA (104 hours)
* 39 episodes of Smackdown on CW (78 hours) + 13 episodes of Smackdown on MyNetworkTV (26 hours)
* 53 episodes of ECW on SciFi (53 hours)
* 22 episodes of Sunday Night Heat (shown int'l/wwe.com)
* 52 episodes of AM Raw on USA
* 1 episode of SNME
* 1 episode of Tribute to the Troops

2009: $111.9M ($72.8M domestic + $39.1M int'l) in TV Rights + $7.7M in TV Advertising
* 52 episodes of RAW on USA (104 hours)
* 52 episodes of Smackdown on MyNetworkTV (104 hours)
* 38 episodes of WWE Superstars on WGN America (38 hours)
* 52 episodes of ECW on SciFi/SyFy (33 hours)
* 52 episodes of AM Raw on USA
* 1 episode of Tribute to the Troops

2010: $127.0M ($81.6M domestic + $45.4M int'l) in TV Rights + $5.9M in TV Advertising
* 52 episodes of RAW on USA (107 hours)
* 39 episodes of Smackdown on MyNetworkTV (78 hours) + 14 episodes of Smackdown on SyFy (28 hours)
* 52 episodes of WWE Superstars on WGN America (52 hours)
* 7 episodes of ECW on SyFy (7 hours)
* 32 episodes of NXT on SyFy (32 hours)
* 13 episodes of NXT (shown int'l/wwe.com)
* 52 episode of AM Raw on USA
* 1 episode of Tribute to the Troops (2 hours USA, 1 hour NBC)

2011: $131.5M ($80.3M domestic + $51.2M int'l) in TV Rights + $1.1M in TV Advertising
* 52 episodes of RAW on USA (108 hours)
* 52 episodes of Smackdown on SyFy (104 hours)
* 14 episodes of WWE Superstars on WGN America (14 hours)
* 38 episodes of WWE Superstars (shown int'l/wwe.com)
* 52 episodes of NXT (shown int'l/wwe.com)
* 52 episodes of AM Raw on USA
* 1 episode of Tribute to the Troops (2 hours USA, 1 hour NBC)

2012: $139.5M ($88.9M domestic + $50.6M int'l) in TV Rights + $1.4M in TV Advertising
* 53 episodes of RAW on USA (131 hours), era of 3-hour RAWs weekly begins with Raw 1000
* 52 episodes of Smackdown on SyFy (104 hours)
* 13 episodes of Main Event on Ion (13 hours)
* 19 episodes of Saturday Morning Slam on CW (9.5 hours)
* 52 episodes of WWE Superstars (shown int'l/wwe.com/hulu)
* 24 episodes of NXT (shown int'l/wwe.com)
* 14 episodes of NXT (Developmental Territory, Hulu, int'l?)
* 53 episodes of AM Raw on USA
* 1 episode of Tribute to the troops (2 hours USA, 1 hour NBC)

2013 YTD (9 months): $119.6M ($78.5M domestic + $41.1M int'l) + $1.4M in TV Advertising (3 quarters)
2013 (estimated Q4): $168.4M ($106.1M domestic + $62.3M int'l) + $1.8M in TV Advertising (estimating Q4 2013)
* 52 episodes of RAW on USA (156 hours), full year of 3-hour RAWs weekly
* 52 episodes of Smackdown on SyFy (104 hours)
* 15 episodes of Total Divas on E! (15 hours, 14 episodes + special)
* 52 episodes of Main Event on Ion (52 hours)
* 19 episodes of Saturday Morning Slam on CW (9.5 hours)
* 52 episodes of WWE Superstars (shown int'l/wwe.com/hulu)
* 52 episodes of NXT (Developmental Territory, Hulu, int'l?)
* 52 episodes of AM Raw on USA
* 1 episode of Tribute to the Troops on NBC

As you can see, from 2006-2012 TV Rights were going up by about $8.5M/yr but they jumped dramatically (more than $28M) this past year.

So, what can account for the extra money? What changed year-over-year?
  1. Full year of Raw at 3-hours (about 25 more three-hour episodes YOY).
  2. Total Divas! began airing on E! (will have 14 episodes + 1 special by end of the year).
  3. Full year of Main Event (about 39 more episodes).
I've been trying to work through the rates for the shows, especially for the latest 2011-2013 run.

I'm thinking what NBCU pays domestically for RAW+Smackdown went from about $84 million in 2012 to $93.5M in 2013 and that WWE is getting more than $600k/episode for Total Divas (probably above $9M domestically for the whole run).

So, if my math is any good (and I haven't checked my numbers against what Dave has written in the Observer, so I could be way off) and WWE is getting around $90M domestically today for Smackdown + RAW, how much do you think they could make on domestic TV Rights?


Predict WWE's Domestic TV Rights in 2015
$100M to $125M - no significant increase for RAW/Smackdown
$125M to $175M - about 25% to 50% increase on RAW/Smackdown
$175M to $250M - RAW/Smackdown doubles
$250M to $300M - RAW/Smackdown triples
$300M to $350M - RAW/Smackdown quadruples
Above $350M

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