Market Overview

WWE Spikes On Reports 'Smackdown Live' Will Move To Fox Following A 'Massive Offer'

WWE Spikes On Reports 'Smackdown Live' Will Move To Fox Following A 'Massive Offer'

After a huge run last week, World Wrestling Entertainment, Inc. (NYSE: WWE) stock spiked higher by more than 12 percent Monday after ESPN and other outlets reported that WWE has agreed in principle to a deal that would move “SmackDown” from Comcast Corporation (NASDAQ: CMCSA)'s USA Network to Twenty-First Century Fox Inc (NASDAQ: FOXA).

What Happened

According to ESPN, the new TV deal will begin in October 2019. Specific terms of the deal have not been disclosed, but the size of the deal is reportedly “massive.” The Hollywood Reporter said the deal will be worth $1 billion over five years, which would be a three-fold increase over WWE's current deal for the program.

TheWrap reports that a person with knowledge of the new deal has said “SmackDown” will begin airing on the Fox broadcast channel on Friday evenings. Representatives from both Fox and WWE have so far declined to comment on the potential deal, and no official announcement has been made.

Why It’s Important

Wall Street analysts have said that the two TV licensing contracts WWE has for its “Raw” and “SmackDown” shows are the biggest potential catalyst for WWE stock in 2019. Shares of WWE have surged more than 172 percent in the past year and 22.9 percent in the past five trading sessions on reports that those new deals could be much larger than anticipated.

Last week, The Hollywood Reporter reported Comcast Subsidiary NBCUniversal declined to renew its contract for “SmackDown” due to the high price they would be paying to renew “Raw.” The Hollywood Reporter cited a person familiar with the matter who said the “Raw” renewal is “expected to close it as much as three times its current value.”

What’s Next

While investors wait for official details on the “Raw” and “SmackDown” news to be released, they will ponder just how much value the deals will add to the company and how much upside the stock has left after it has nearly doubled in just the past six months alone.

At time of publication, WWE shares traded around $54.53.

Related Links:

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

Analyst Turns Incrementally Bullish On WWE After Q1 Earnings

Image credit: Miguel Discart, Flickr

Posted-In: ESPN Fox SportsNews Rumors Top Stories Movers Media Trading Ideas Best of Benzinga


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