Netflix Inc. has acquired the exclusive rights to Raw as well as other programming from World Wrestling Entertainment, marking the streaming service’s first big move into live events.
The streaming giant has agreed to pay $5 billion over the course of the 10-year deal, according to people familiar with the terms who asked to not be identified because the numbers aren’t public. A spokesperson for Netflix declined to comment on the terms of the deal.
Raw will air on Netflix in the US, Canada, Latin America and other international markets beginning in January 2025, after the expiration of the WWE’s domestic deal with Comcast Corp. The company will also become the exclusive home outside the US for all WWE shows and specials, including Smackdown and NXT, as well as pay-per-view live events like Wrestlemania, SummerSlam and Royal Rumble. The pay-per-view events will be included at no additional cost for Netflix customers.
Shares of TKO Group Holdings Inc., which owns WWE, surged 21% in premarket trading in New York on the news. The conglomerate is also adding former wrestler and actor Dwayne “The Rock” Johnson to its board, according to a securities filing on Tuesday. Johnson, 51, will be granted the intellectual property rights to “The Rock” trademark and will also provide promotional services to WWE, for which he will be entitled to about $30 million in TKO stock.
After attracting more than 200 million customers by offering films and TV shows on-demand, Netflix has now committed to offering three hours of live wrestling a week starting next year. The company hopes the deal will bring in millions of loyal WWE viewers and provide a boost for its fledgling advertising-supported plan. Netflix has been dabbling in live events for the last year, airing a live comedy special, as well as a golf match, but this is the first long-term rights deal.
The WWE is the latest major live event to shift from cable TV to streaming. Ultimate Fighting Championship, which is also owned by TKO, offers many of its matches on ESPN , while the National Football League sold Amazon.com Inc. the rights to Thursday Night Football. A playoff game on Comcast’s Peacock just delivered the largest streaming audience for any professional sports event in the US.
While the WWE isn’t exactly a sport — most of the storylines are scripted — it draws a consistent live audience akin to a sporting event. Raw is the most-watched of the WWE’s programs, drawing about 1.5 million viewers per show. It debuted in 1993 and has been the training ground for future movie stars Johnson and John Cena.
“By combining our reach, recommendations and fandom with WWE, we’ll be able to deliver more joy and value for their audiences and our members,” Netflix Chief Content Officer Bela Bajaria said in a statement. The company has also licensed the rights to WWE’s documentaries and original series.
Comcast paid about $265 million a year for the rights to Raw, but the owner of NBCUniversal last year acquired the rights to Smackdown, considered the second-best package, for about $287 million a year. Shares in TKO, the owner of WWE, sank on the news as investors had been hoping the package would score a bigger payday. They also feared WWE would struggle to find a lucrative new home for Raw. Investors didn’t account for Netflix’s newfound interest in live entertainment, however.
TKO has now secured long-term deals for all of its biggest properties, and will negotiate its next deal for the UFC in 2025.
“Our partnership fundamentally alters and strengthens the media landscape, dramatically expands the reach of WWE and brings weekly live appointment viewing to Netflix,” Mark Shapiro, TKO’s president, said in a statement.
Netflix reports fourth-quarter earnings after the market closes on Tuesday and Wall Street is expecting another blowout quarter after the last report in October showed a surprisingly strong increase in new subscribers. The stock has gained more than 40% since then and analysts’ are looking for revenue to have risen 11% in the last three months of the year. That would be its fastest expansion in two years, when the company got a boost from the stay-at-home economy.