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WWE Could Be In A Bidding War For 'Smackdown Live' While 'Raw' Gets Big Renewal

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WWE Could Be In A Bidding War For 'Smackdown Live' While 'Raw' Gets Big Renewal
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World Wrestling Entertainment, Inc. (NYSE: WWE)'s stock was trading higher by 15 percent Thursday morning after a report that rights to the company’s “Smackdown Live” program could soon be up for open bidding as Comcast Corporation (NASDAQ: CMCSA) subsidiary NBC Universal focuses its renewal efforts on the “Monday Night Raw” brand.

What Happened

The Hollywood Reporter reported Wednesday night that sources say NBC has declined to renew its deal for “Smackdown” and is focusing instead on renewing its deal for “Raw.” Both weekly shows currently air on NBC’s USA Network. The source also said NBC’s “Raw” renewal is “expected to close at as much as three times its current value.”

Why It’s Important

With NBC reportedly out of the picture, WWE could find itself in the middle of a bidding war for “Smackdown,” which could reportedly be led by Twenty-First Century Fox Inc (NASDAQ: FOXA).

Back in January, Variety reported that Facebook, Inc. (NASDAQ: FB) and Amazon.com, Inc. (NASDAQ: AMZN) are also interested in bidding for WWE content. WWE has already inked a partnership with Facebook to air its weekly “Mixed Match Challenge” program exclusively on Facebook Watch.

WWE investors will be watching closely to see which companies actually join the bidding war for “Smackdown” and just how much NBC is willing to pay to hold onto “Raw.”

What’s Next?

CFRA analyst Tuna Amobi told Benzinga that "Raw" to NBC and "Smackdown" to Fox makes sense, but it's all pure speculation until the deals are actually announced. 

"NBC not renewing ["Smackdown"] probably has more to do with the potential increase in the rights fees that will be involved," Amobi said.

Amobi said with the number of over-the-top and traditional TV sources out there looking for sports and entertainment content, "Smackdown" should be able to easily find a new home at a great price for WWE investors.

"I don't see any way they will not be able to get a decent increase over the last contract, and decent may be an understatement because the way these TV rights have been going, it's been with upside if anything."

While bidding wars are always good news for investors, WWE will need to come up with some big contracts to justify the stock’s 154 percent gain over the past year.

At time of publication, WWE's stock was trading around $48.60 per share.

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Image credit: Megan Elice Meadows (IMG_5217) [CC BY-SA 2.0], via Wikimedia Commons

Latest Ratings for WWE

DateFirmActionFromTo
Nov 2018JP MorganUpgradesNeutralOverweight
Oct 2018Morgan StanleyMaintainsOverweightOverweight
Oct 2018CitigroupMaintainsNeutralNeutral

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