WWE in Talks to Sell PPV Rights to Another ‘Major’ Streaming Service

Potential deal would be announced by next month

WWE Royal Rumble 2020

WWE is in talks to sell the rights to its pay-per-view events, which are currently available via the company’s WWE Network OTT platform, to another “major” streaming service, chairman and CEO Vince McMahon revealed Thursday.

“Well, we have a lot of options. We could continue on as we are now, with a … free tier and a more enhanced paid tier,” McMahon said during WWE’s fourth-quarter and full-year 2019 earnings conference call. “Right now there’s no more better time to exercise the selling of our rights to all the majors who, quite frankly, all the majors are really clamoring for our content. So that could be a significant increase, obviously, in terms of revenue.”

A second media analyst then followed up to ask if any of WWE’s premier pay-per-views, like WrestleMania or the Royal Rumble, would be “off-limits” to a potential third party.

“There’s nothing — obviously the devil’s in the details with any of these arrangements — but at this point, there’s nothing that looks like it would be anything that stops us from doing any type of transaction with the Network, if we chose to,” interim CFO Frank Riddick responded.

When the topic of incorporating ads into the WWE Network was brought up by another analyst, McMahon said it’s a “possibility” that they can leave “open,” pending the potential sale of PPV rights. “But again, right now, if we continue on as the Network, pretty much as is, then we’re definitely going to consider that,” McMahon said. “If, in fact, we’re looking to enhance revenue, that would be up to our partners.”

That same analyst asked about selling the PPV rights to a streaming platform versus a linear network, to which McMahon said: “There’s so many majors going into OTT … Our [WWE] Network, obviously, is our most-premium content and we have, like, a million and a half subscribers, we’ve had more. But nonetheless, it’s another way for us to capitalize on our Network. And, again, as I said, there’s very strong interest in all the majors, as it relates to OTT.”

Later in the call, McMahon revealed, “Making reference to OTT and the interest of the major players, we’d be announcing that deal if we go that way, in the first quarter, that’s how far along we are.” So that means a deal — if made — would be announced by next month.

WWE Network, which costs $9.99/month, carries all of the pro-wrestling company’s pay-per-views, including Royal Rumble, Survivor Series, SummerSlam and WrestleMania. It was previously the home of WWE’s weekly “NXT” show, which USA Network bought the rights to last year. The streaming service also houses a library of archived wrestling and out-of-ring content, including documentaries.

McMahon noted that a potential deal is not set in stone and that, as far as WWE retaining rights to certain content goes, “Nothing is a ‘must-have.’ We’ll deal with what’s available.”

The WWE CEO also addressed the shocking firings of co-presidents George Barrios and Michelle Wilson last week, saying the “decision did not reflect a change in our strategy. It was made after careful consideration.” You can read more about what he said on that matter here.

Ahead of the call, WWE reported it beat fourth-quarter 2019 earnings estimates but missed on revenue expectations, despite reaching a record high thanks to its big “SmackDown” on Fox deal.

Wall Street forecast earnings per share (EPS) of 73 cents on $333.28 million in revenue, according to a consensus estimate compiled by Yahoo Finance. WWE actually reported EPS of 78 cents on $322.8 million in revenue for Q4 — an 18% increase in revenue over the prior year’s comparable quarter — which is the highest quarterly revenue in the company’s history.

Following the company’s release of its Q4 and full-year 2019 financials earlier this morning, WWE stock sunk sub-$40 per share in premarket trading. When the U.S. market opened at 9:30 a.m. ET, the company’s stock was at $40.24 per share, down 18% from the $49 it closed on Wednesday afternoon.