TKO Group Holdings, Inc. TKO announced a blockbuster $5 billion deal with Netflix, Inc. NFLX on Tuesday which will bring the WWE's live, weekly program "Raw" exclusively to Netflix's streaming service.
TKO CEO Ari Emanuel joined CNBC's "Squawk Box" Tuesday to discuss the exclusive, 10-year deal, which drove TKO's stock more than 20% higher immediately following the announcement.
The Details: Netflix has been moving into both sports entertainment and live events with programs including "Tour de France: Unchained," which debuted in June 2023 and gives a behind-the-scenes view of the world's most famous cycling race.
Netflix also hosted a golf tournament called the "Netflix Cup" in November 2023, which streamed live and featured Formula 1 drivers and PGA Tour golfers. The WWE "Raw" deal will bring three hours of live sports programming to Netflix's audience each week.
"They are the best company with sports entertainment. They’ve done it with Formula 1, they've done it with the Tour de France, and this is kind of the next iteration as they move into live," Emanuel said.
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The TKO Group CEO deflected questions about Netflix's strategy regarding a move into live programming, but he told CNBC that "live is important” for the streaming giant.
Netflix reported fourth-quarter financial results on Tuesday and addressed its ongoing investments in live programming in a letter to shareholders.
“We continue to invest in and experiment with live programming — for example, with the upcoming SAG Awards and Netflix Slam, an exhibition tennis match between Rafael Nadal and Carlos Alcaraz. This will enable us to understand what audiences value most, and how to eventize these moments,” the company said.
The agreement with Netflix has an initial 10-year term with aggregate rights fees in excess of $5 billion, according to a regulatory filing. Investors will likely get more details on the partnership when TKO reports fourth-quarter results, which are expected in early February.
TKO was formed earlier this year to bring the UFC and WWE together in one integrated organization. Endeavor Group Holdings Inc EDR owns 51% of TKO.
TKO Price Action: According to data from Benzinga Pro, TKO Group Holdings shares closed Tuesday up 15.8% at $89.65.
Image: Wikimedia Commons
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