TKO Group Holdings announced that WWE’s Monday Night Raw will move to Netflix in 2025 in a deal worth $5 billion over 10 years, marking the first time the program will shift off linear television since its launch 31 years ago.
Big news hit the MMA world on Tuesday. TKO Group Holdings, the merged entity of UFC and WWE, made a massive announcement. Their flagship program, WWE’s Monday Night Raw, is moving to Netflix starting in 2025. The deal? A whopping $5 billion over 10 years.
This move is historic. Raw is leaving linear television for the first time since its launch 31 years ago. The deal’s specifics? $500 million per year. Netflix, however, can exit the contract after five years or extend it for another decade if things go well.
Let’s compare this to the previous deal. WWE and NBCUniversal had an agreement for Raw to air on the USA Network. That was worth around $250 million per year. This new broadcast rights deal, kicking off in January 2025, doubles that value annually.
The market reacted instantly. TKO stock soared 15 percent after the WWE-Netflix deal news broke. But what happens to Raw in the meantime? The current deal runs through October 2024, and it’s unclear where the program will air between then and January 2025.
Netflix isn’t just getting Raw. They will also control all WWE programming outside the United States. This includes shows like Smackdown and NXT, and major events like WrestleMania and the Royal Rumble.
TKO president and COO Mark Shapiro was ecstatic. He called the deal “transformative,” marrying WWE’s unmissable product with Netflix’s extraordinary global reach. He believes it fundamentally alters and strengthens the media landscape, expanding WWE’s reach and bringing weekly live viewing to Netflix.
TKO has been busy. They’ve negotiated several broadcast deals for WWE recently. Smackdown is moving to the USA Network in a deal worth $1.4 billion over five years. NXT is shifting to the CW for five years at approximately $20 to $25 million per year.
But nothing compares to the Netflix move. The streaming wars are heating up, with networks shifting programming to outlets like Amazon, Apple TV, and Hulu. Netflix has mostly avoided live programming, but this WWE deal changes that.
So, how does this relate to the UFC? Well, the UFC now takes center stage for TKO’s new broadcast rights deal. The promotion’s current deal with ESPN runs through 2025, and negotiations are expected to start soon.
The UFC broadcast rights have been a significant growth driver for ESPN+. The premium streaming service connected to the sports outlet hit 26 million subscribers last November. As part of an extended deal with the UFC, ESPN also controls the rights to pay-per-view broadcasts, another massive revenue driver.
But will Disney, ESPN’s owner, put up enough capital to keep the UFC beyond 2025? Disney CEO Bob Iger has spoken about ESPN’s future, which includes plans to take on partners for the network. There are rumors that the NFL is in talks with Disney for a deal that includes the football league taking a small ownership role with ESPN.
Endeavor, TKO’s parent company, might seek something similar to stay with ESPN. But the move of WWE Raw to Netflix gives a hint of what could happen over the next year.
The UFC’s last broadcast rights deal with ESPN was reportedly worth around $1.5 billion over seven years. The next deal is expected to dwarf that number. At least one Wall Street analyst predicts a new UFC deal could double in value to around $3 billion.
Netflix isn’t just testing the waters with the WWE deal. They’re investing a huge sum on a proven ratings draw with Monday Night Raw, under at least a five-year deal, or potentially extending that out to 20 years if everything goes well.
Amazon locked up the NFL’s Thursday Night Football package for 10 years at a whopping $1 billion per season. Apple TV has also gotten into the live sports business after inking a 10-year, $2.5 billion deal with Major League Soccer, among other additions to the growing streaming service.
Netflix currently boasts more than 247 million paying subscribers. Despite past hesitance to get involved in broadcast rights deals for live sports, the contract with WWE changes those plans. There’s a chance that now a deal between Netflix and WWE has been brokered, TKO executives may revisit the idea for the UFC.
Netflix co-CEO Ted Sarandos, however, claimed during an earnings call on Tuesday that the WWE deal won’t necessarily change the company’s strategy moving forward, at least where major sports rights deals are concerned.
“WWE is sports entertainment, so it’s really as close to our core as you can get of that sport storytelling,” Sarandos said. He added that the deal has options and protections that Netflix seeks in its general licensing deals and economics that they’re super happy with globally.
The UFC, being owned by the same company as WWE, could still initiate a conversation with Netflix. Especially as the streaming service hinted at a potential price increase for subscribers in the near future. A UFC deal — as big as it could be — still won’t equal the price leagues like the NFL or NBA command, so that’s also a possible factor.
Netflix, Amazon, Apple TV, and other streamers have thrown around huge sums of money to land deals like this. There’s a chance the bidding could even shut out a network as large as ESPN. If Netflix is willing to put down $500 million per year for WWE Raw, how much would it pay to get the UFC, another proven draw with year-round programming?
TKO executives have also hinted that a split package similar to the NFL or NBA could be in the works for the UFC. That means ESPN could maintain some of the broadcast rights, but the UFC could also strike a deal to move some programming to Netflix, Amazon, or another streaming network.
With every major WWE program moving to a new network in 2025, it’s hard to know for certain if the UFC will just stay with the status quo at ESPN, especially with other interested bidders. The WWE-Netflix deal definitely sets the stage for some incredibly important negotiations kicking off for the UFC later this year.