Why 21st Century Fox's CFO Is So Hyped for WWE's 'SmackDown Live'

WWE

At first blush, you wouldn’t expect a CFO of a major media company to talk about pro wrestling at an investor conference. But that’s exactly what happened Thursday morning at the Goldman Sachs Communacopia Conference.

John Nallen, who serves as senior executive VP and CFO for 21st Century Fox, discussed the Fox broadcast network’s deal for the WWE’s “SmackDown Live” franchise, which shifts over from USA beginning in 2019.

“It’s a 50 to 52-week-a-year sport with no repeats. It’s a new novella every week,” said Nallen, comparing it to the other sports that Fox airs, including the NFL, college football and pro baseball. “For us to have that kind of appointment programming, that audience, every week of the year, is a really unique opportunity for us.”

Also Read: Michael Luisi Fired as President of WWE Studios

The WWE and Fox agreed to a five-year deal, worth as much as $1 billion, that will see “Smackdown Live” air on Friday nights starting Oct. 4, 2019. This will, presumably, happen after Disney closes its deal to acquire most of the film and TV assets from 21st Century Fox, which is expected in the first half of next year.

Since the sale doesn’t include the Fox broadcast network, but does include its TV studio, Fox will be on a bit of an island without a pipeline of content from an in-house studio. Along with its new “Thursday Night Football” deal, “New Fox” will be betting on live sports to fill up much of their airwaves.

Nallen says that’s one of the biggest benefits of the “Smackdown Live” deal: “To lock up a Friday night and just not have to focus on programming it from an entertainment standpoint.” Though that may not be music to the ears of Tim Allen, since his “Last Man Standing,” along with “The Cool Kids” and “Hell’s Kitchen” are currently slated for Fridays this fall.

Also Read: How Will Edgier FX Shows Like 'Mayans MC' Fit Inside Disney's 'Family-Friendly' Brand?

Should those series return for the 2019-2020 season, they’ll need to find a new night, it seems.

Another benefit, especially for a CFO, is that the WWE and NFL deals start right around the same time that many of Fox’s retransmission agreements with cable and satellite operators, where these companies pay Fox for the right to carry their TV channels, are set to expire.

“A very substantial number of our retrans deals come up in the next three to four years,” said Nallen.

9 Biggest Billion-Dollar Entertainment and Media Deals in 2017 (Photos)

While all eyes were on AT&T's $85 billion acquisition of Time Warner, announced in late 2016 but facing an antitrust lawsuit from the Justice Department, there were plenty of other megadeals in media, tech and entertainment that kept investment bankers busy in 2017.

Here are some of the biggest deals of the year:
Getty Images
Disney to acquire most of 21st Century Fox for $52.4 billion

In a massive deal that could change the entertainment industry even more than AT&T-Time Warner, Disney announced plans to acquire Fox's film and TV studios and much of its non-broadcast television business, including regional sports networks and cable networks such as FX, FXX and Nat Geo. Disney would also pick up Fox’s stake in the European pay-TV giant Sky — and be better positioned to win regulatory approval to complete the acquisition of the 61 percent of the company it does not already own.
Discovery Communications agrees to buy Scripps Networks Interactive for $11.9 billion

The merger of two cable powerhouses brings together channels including Discovery, Science, Food Network and HGTV – and could give the combined company a stronger position as pay-TV continues to migrate to the internet.
Discovery/Scripps
Sinclair Broadcast Group agrees to buy Tribune Media for $3.8 billion

This deal, if approved, would give conservative-leaning Sinclair control of 223 stations in 108 markets, including 39 of the top 50, covering 72 percent of households in the country. And it's only possible under rule changes implemented by new FCC Chairman Ajit Pai.
Sinclair/Tribune
Cineworld offers to buy Regal Cinemas for more than $3 billion

After a string of movie theater mergers last year, the sector has quieted down -- along with the box office. And while this isn’t yet a done deal -- or even an accepted offer -- British chain Cineworld made a late November bid of $23 a share for the U.S.’s No. 2 cinema chain.
Cineworld/Regal
Meredith Corp. acquires Time Inc. for $2.8 billion

The magazine megadeal is a sign of changing times in the publishing industry, with the owner of esteemed brands like Time, Fortune and Sports Illustrated selling to the parent of Better Homes and Gardens and Country Life – backed by $650 million from big-time conservative donors the Koch brothers.
Meredith/Time
Verizon acquires Straight Path Communications for $2.3 billion

Straight Path may not be a household name, but it was the subject of a bidding war between AT&T and Verizon. The company is one of the largest owners of millimeter wave spectrum, seen as key to the buildout of 5G networks, which should power much faster mobile internet -- better for video -- in the near future.
Verizon/Straight Path
Disney buys the rest of BAMTech for $1.6 billion

The Mouse House jumped into internet TV in a major way in 2017, announcing upcoming Disney and ESPN-branded streaming services and acquiring the rest of streaming tech company BAMTech to power those products.
Disney/BAMTech
Entercom buys CBS Radio for $1.5 billion

CBS Radio was intended to be spun off from its broadcast parent in an IPO, but instead it was scooped up by a competitor. The combined company, now the second largest radio business in the country, owns and operates 244 stations in 47 markets.
Entercom/CBS Radio
MGM buys the rest of Epix for $1 billion

The independent studio went all in on the pay-TV business, buying the rest of the premium cable network from Viacom and Lionsgate. And that's paid immediate dividends, as MGM's media networks division propelled it to a strong third quarter.
MGM/Epix

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Rewind 2017: Media and content consolidation continued this year

While all eyes were on AT&T's $85 billion acquisition of Time Warner, announced in late 2016 but facing an antitrust lawsuit from the Justice Department, there were plenty of other megadeals in media, tech and entertainment that kept investment bankers busy in 2017.

Here are some of the biggest deals of the year:

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