WWE enters a new licensing agreement with NBCU, plans to have fans back in April
As part of a new five-year licensing agreement, World Wrestling Entertainment (WWE) announced that the company will roll its WWE Network into NBCU’s Peacock streaming service. The company also offered 2021 guidance and expected to report a record 2020 operating income of $209 million and a record 2020 adjusted OIBDA of $286 million.
When the news first broke, many fans were worried about what would happen to the WWE network. But WWE President Nick Khan assured Yahoo Finance that fans will still be able to enjoy the same content on the new service
“Everything that you have on WWE network right now will roll into Peacock,” he told Yahoo Finance.
At $9.99 per month, the WWE network currently offers fans access to the world’s largest professional wrestling content library. Khan tells Yahoo Finance that the new partnership will bring fans the same content but at a lower price point. The ad-supported version of Peacock will be priced at $4.99 per month. The WWE president also said the 25 million homes that subscribe to Comcast or Cox cable already get Peacock free with their cable subscriptions.
Khan reminds Yahoo Finance that WWE CEO Vince McMahon is no stranger to pioneering new viewing experiences. In the 1980s, McMahon revolutionized the pay-per-view format and was one of the first OTT streaming services in 2014, alongside Netflix (NFLX).
“If you look at Vince’s vision for this, it used to be closed-circuit back a long time ago. So you had to go to an arena, buy a ticket and watch on a TV screen at the arena. Vince was the first mover into the pay-per-view space. First mover into the [OTT] space in 2014 with WWE network. And then, ultimately that space became cluttered. We were the first movers in partnering with a massive media conglomerate, like NBCU, to be able to get our product at a lesser price to more people.”
Kahn could not comment on the price of the 5-year deal, but the Wall Street Journal reported that it could be worth more than $1 billion.
In a recent note, Evercore ISI analyst John Belton believes that WWE’s new partnership with NBC Universal and its new positive FY2021 OBIDA guidance puts the stock’s standing in good shape.
“On balance, we think this is positive news and is a bullish read on the value of WWE content. Looking forward, we continue to like the potential for WWE to grow earnings meaningfully in 2022 and reiterate our OP rating and $58 price target. We had been a bit concerned about 2021 earnings. However, this morning’s preliminary guidance removes some of that risk. We will await more details on the upcoming earnings call regarding the Peacock partnership and specifically what is included in management’s guidance (Peacock deal impact, international events).”
Bringing back fans
Khan tells Yahoo Finance that Wrestlemania 37 in Tampa, Florida, on Saturday, April 10 and Sunday, April 11, will be the first fan attended WWE event since the start of the pandemic.
“Well, we are the only enterprise that continues to produce content every week. We never missed one week, never took a week off once COVID hit. We are really proud of all of our folks who contributed to that in terms of getting an audience back. WrestleMania, which is in Tampa, the same city as the Super Bowl that’s when we’re first going to go back with live fans,” he said.
“Obviously we’re working closely with Raymond James Stadium and the Tampa Bay political officials to figure that out. But after the Super Bowl, we’ll get it figured out, and we’ll put tickets on sale.”
WWE’s fourth-quarter and full-year 2020 earnings are set for February 4, 2021.
Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.
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