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Picture: 123RF/Allan Swart
Picture: 123RF/Allan Swart

Netflix took a big step into live events on Tuesday with a more than $5bn rights deal that would make it the exclusive home of World Wrestling Entertainment’s Raw from January 2025.

The 10-year partnership will put Raw on the streaming platform in the US, Canada, UK and Latin America, among other territories, the companies said.

Netflix will also exclusively telecast outside the US all WWE shows and specials, including SmackDown, as well as pay-per-view live events such as WrestleMania and Royal Rumble.

Shares of Netflix rose 2% in premarket trading, while TKO Group — the parent firm of WWE — jumped 23%.

The streaming pioneer has an option to extend the deal for another 10 years or to opt out after the initial five years.

Netflix began experimenting with live events last year, with comedian Chris Rock’s stand-up special, Selective Outrage. It also has found success with sports-related programming, such as its Formula 1 racing documentary series, Drive to Survive, and the behind-the-scenes golf documentary series, Full Swing.

In October, it hosted its first live sports event, The Netflix Cup, featuring athletes from Drive to Survive and Full Swing.

The company’s third-quarter investor letter hinted there might be more to come — signalling an evolution from CEO Ted Sarandos’ long-held position that Netflix was “in the sports business”, focused on the drama of sport, but not live games.

“As we work to develop the best programming mix for our members, we’re also having great success with our sports shoulder programming, making Netflix the go-to place for anyone excited by the drama of sport,” the company said in its third-quarter note. “It’s another area where we can deliver enormous value for our members as well as rights holders and talent.”

Mark Shapiro, president of TKO, said Netflix “threaded the needle perfectly”, by offering live sports programming that “comes with a spine of entertainment”.

The Raw deal marks Netflix’s first long-term bet on live events and could help draw loyal followers that turn to WWE each week for bouts between the likes of CM Punk and Cody Rhodes. Unlike other professional sports, the competition is year-round and not seasonal.

Shapiro hailed the deal as “transformative,” adding that it expands the reach of WWE and brings appointment viewing to Netflix.

“We cracked the code with Netflix,” Shapiro said “We’re now a neighbour of the best premium programming slate you’re going to find in the universe of content.”

Raw, which airs on Mondays, is the top show on the Comcast-owned USA Network, where it brings in 17.5-million unique viewers over the course of the year. It debuted in 1993 and has 1,600 episodes.

It reliably draws an audience, which is something Netflix will find valuable as it builds its ad-supported streaming service, known in industry parlance as AVOD.

“This will be a monster impact player for their AVOD platform,” said Shapiro.

The deal with Comcast ends this year and Raw was paid about $265m a year for the rights under the agreement, according to Bloomberg News.

WWE merged with Endeavor Groups UFC to form TKO Group Holdings in a deal valued at $21bn last year, forming one of the biggest names in wrestling and entertainment.

Reuters

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