World Wrestling Entertainment, Inc. (NYSE: WWE) made a huge announcement in after-hours trading on Tuesday. The company announced a new agreement surrounding its flagship program. Here’s the deal:
WWE Announces Monday Night Raw Deal
As mentioned above, World Wrestling Entertainment announced a new agreement surrounding its flagship program, Monday Night Raw. The agreement was an extension with USA Network that allows the network to show Monday Night Raw programming to its audience.
In the release, WWE said that the agreement will commence in October of 2019 and will continue a three decade-long relationship between WWE and USA. The company also boasted about the fact that Monday Night Raw is the #1 show on USA Network, giving followers action, droma and compelling storylines 52 weeks per year. In a statement, Chris McCumber, President of Entertainment Networks for NBCUniversal Cable Entertainment, had the following to offer:
Monday Night Raw and USA Network have dominated Monday nights during a truly historic run… Our partnership with WWE is one of the strongest and most successful in the business, and together we’ll take Raw to even greater heights.
The above statement was followed up by Vince McMahon, WWE Chairman & CEO. Here’s what he had to offer:
We look forward to continuing our long-standing partnership with NBCUniversal and USA Network… Monday Night Raw has been synonymous with USA Network and we are excited about what the future holds for WWE’s flagship program.
Why This Deal Is Such Big News
The new deal with USA Networks is expected to increase distribution of WWE Raw and Smackdown programming by 3.6 times when compared to the prior deal with NBC Universal. Of course, increased distribution leads to expectations of increasing viewership, and that increasing viewership equates to expectations of increasing frevenues.
With the new contract in place, WWE said that it expects for the revenue from these agreements to grow from $311 million in 2019 to $462 million in 2021. The company also said that in that time fram, revenue expeactations could increase further. This is primarily due to the fact that WWE has further deals to negotiate between now and 2021.
At the end of the day, the new contract is likely to increase the company’s following and its revenue in a big way. Considering that investors are ultimately investing for growth, it’s this type of announcement that moves the market!