WWE Could Replace UFC on FOX, Receive $400 million annually

WWE

The UFC’s 7-year broadcast deal (worth $160 million in ’18) with 21st Century Fox, Inc. (FOXA) is expiring in 2018 and the mixed martial arts promotion is reportedly seeking a new deal worth more than twice as much annually ($450 million). FOXA is reportedly prepared to offer +/-$200 million/year, so it’s possible (if not likely) the UFC will be finding another broadcast home. Should that occur, Dave Meltzer (Wrestling Observer) has indicated FOXA would look to acquire WWE broadcast rights (expiring in September 2019), if not the entire professional wrestling promotion; though it’s been stated McMahon has no intention of selling (owns 41.8% of the outstanding common shares, but controls 82.8% of the company).

Howie Long-Short: NBCUniversal (CMCSA) currently pays $200 million/year for the rights to broadcast WWE Monday Night Raw and SmackDown. The speculation is the next deal will be closer to $400 million annually; potentially twice what the UFC will see. That’s noteworthy because WME paid $4 billion for the UFC in July 2016, $1.5 billion more than the WWE’s current market cap. I think it’s safe to say they overpaid.

Fan Marino: Should FOXA acquire WWE broadcast rights, the prevailing feeling is that RAW would air on network television; with SmackDown moving to FS1. That’s not great news for hardcore WWE fans, as it likely means reducing RAW to a 2-hour program once again (currently 3 hours); Fox affiliates tend to air local news at 10p EST. Speaking of RAW, the 25th anniversary will be held on January 22nd at the Barclays Center. It’s now the longest running weekly episodic show in U.S. TV history.

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Facebook Watch Adds WWE and NLL, Social Interactive Components Worth Watching

Facebook Watch (FB) has announced partnerships with both the WWE and National League Lacrosse (NLL), giving the burgeoning video platform additional sports content. Beginning on January 16th (10p EST), a new weekly in-ring wrestling series entitled “Mixed Match Challenge” will debut; wrestlers from both Raw and SmackDown rosters will compete in a single elimination mixed tag-team tournament that spans 12 weeks. Watch will also begin airing a new weekly show from NLL productions entitled ReLax that offers fans insight and analysis on the weekend’s games. The show, airing exclusively on the Watch platform Mondays at 6p EST, will give fans a chance to interact and ask questions during the first hour of the show.

Howie Long-Short: The WWE experienced their “all-time best quarter” in Q3 ‘17, as the company grew revenue 14% to $186.4 million, set a company quarterly record for adjusted OIBDA ($40.4 million) and saw net income rise to $21.8 million (from $11.1 million YOY). The company will release its Q4 ’17 (and full year ’17) earnings report on Feb. 8th. 2018 projects to be a banner year for the WWE, with the company anticipating setting another record for revenue generation and targeting adjusted OIBDA of at least $115 million; which would also set a record.

Fan Marino: Mixed Match Challenge episodes will run 20 minutes in length and be optimized for mobile consumption. The social interaction elements included will be worth watching, as fans will have the opportunity to select match-ups and match stipulations. Teams will be announced beginning tomorrow night. You can find a list of participants, here.

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New Football League Focused on “Spectacular”, Believes it can Succeed Without Violence

The American Flag Football League (AFFL) will debut in spring 2018, with 1,024 amateur teams (open to public, close March 1) competing in a 7-on-7 single-elimination tournament. Winners receive $50,000 and get an opportunity to play a team of professionals for $1 million in prize money. JohnWallStreet had a chance to speak to AFFL founder Jeff Lewis and asked him a few questions about his new venture.

A lot of start-up football leagues have failed. Why does the AFFL have a chance to succeed?

Lewis: What’s tough about football is, it’s the sport that requires the most resources; the most players, the most coaches, the most gear, the biggest field and so when you start trying to run numbers, man does it add up. When you think about this (AFFL) as a business, you just don’t need that many players. Essentially, we can attack the sport with the biggest audience (football) with basketball team-size costs and that makes it an interesting prospect.

Some will argue that the gladiator aspect of football is the draw. Can you draw an audience without violence?

Lewis: We scraped some data that showed what people talk about most on social media when they watch football. What was very clear was that nobody talked about tackles or hits or anything about that aggressive element of the game. What they were constantly engaged in, was the spectacular. The run, the pass, the interception, the stuff that we still have.

How do you guys plan on making money with this league?

Lewis: We’re in the business of creating a show. We’re WWE. We’re NASCAR. We’re going to put on live events and we want people to attend the live events. Even if 65-70% of the long-term value we would garner from this, is as content, it all starts with the event itself. If you don’t make the event work, then the content value is unattainable.

Howie Long-Short: The Arena Football League, which got its start in 1987, is going to play its 2018 season with the fewest number of teams (4) since the league’s inaugural season; following an announcement that the Tampa Bay Storm are suspending operations, the second franchise to do so since Thanksgiving (Cleveland). While the league appears to be in trouble, Ron Jaworski (part owner of both the Philadelphia Soul and new Albany franchise) said the remaining owners remain “rock solid” in their commitment to the league and that the AFL could work itself back to 12 teams within 3 years. Monumental Sports & Entertainment owns the Washington Valor and Baltimore Brigade franchises.

Lewis: There are GREAT athletes in the AFL. The problem with the sport is that when you shrink it down, those athletes don’t get to show themselves in the best way.  Football requires scale and space.  There is something dissonant to most football fans about the compressed space of the indoor game.  That’s one of the reasons we are so focused on playing on a full-sized field.

Fan Marino: The AFFL player pool is going to have former NFL guys (think: Vick, Faulk) but it’s the athletes they’re bringing in from other sports that I’m far more curious to see play. An interesting name to watch: 3x NBA slam dunk champion Nate Robinson.

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Vince McMahon Sells $100 Million in WWE Stock, XFL 2.0 Next?

Chairman and CEO of World Wrestling Entertainment (WWE) Vince McMahon sold 3.34 million company shares, worth more than $100 million (shares closed at $31.87 on Thursday); noting the proceeds were “primarily to fund a separate entity from the Company, Alpha Entertainment LLC, which he established to explore investment opportunities across the sports and entertainment landscapes, including professional football.” On December 16th, Alpha filed for 5 different trademarks on “XFL”; in addition to recently registered marks on “URFL”, “United Football League”, “UFL” and “For the love of Football”. The XFL ran for just one season before folding in 2001.

Howie Long-Short: WWE shares hit an all-time high earlier this week ($32.92), so while Vince is selling a decent chunk of the company (4.3%); he’s cashing out at the right time. He’ll also still owns 41.8% of all outstanding WWE common shares (with 82.8% of the voting power). I simply question the feasibility of the XFL 2.0 success. The league lost $70 million the first time around and had the benefit of NBC’s (CMCSA) promotion behind it. Does a few extra months of training camp really make a difference? Fool me once (for a half), shame on you. I won’t be fooled again.

Fan Marino: While on the topic of upstart leagues, LaVar Ball’s Junior Basketball Association seems to be based on flawed logic. The top HS players can get paid $1 million to go overseas, so they aren’t playing for $100,000; and there is no market to watch second-tier HS players, without the emotional attachment of a college jersey on them. Oh, and who is funding this league? BBB is the apparel and sneaker provider, eliminating any potential for the usual suspects (NKEADDYY) to participate.

Vince McMahon sells $100 million of WWE stock as XFL reboot plan continues

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NBCU to Stream Sunday Night Football to Mobile Phones, Broadcasts to Include Local Ads

NBCUniversal (CMCSA), which has been streaming Sunday Night Football to desktops, tablets and connected TVs since 2008, has acquired the rights to stream SNF to all mobile devices, including mobile phones for the first time. The deal also provides NBCU’s cable, satellite, traditional and virtual MVPD partners with authenticated streaming rights. The NBCU mobile stream will contain both national and local affiliate ads (for 1st time). SNF is primetime television’s #1 show; NBCU also owns the rights to the #2 rated show, TNF.

Howie Long-Short: NBCU had the ability to add rights to stream games to mobile phones after Verizon gave up exclusivity as part of its recent 5-year $2.5 billion deal with the NFL. In exchange for conceding exclusivity, the telecom giant picked up the rights to stream in-market and nationally-televised league games (and access to on-demand content) to any mobile device, Oath owned web property (i.e. Yahoo (AABA), Yahoo Sports, AOL, Go90) or connected TV nationwide regardless of carrier. Verizon won’t have the rights to sell national ads though, as NBCU maintains exclusive control over the inventory; now offering advertisers expanded reach through VZ (and NFL mobile) platforms.

Fan Marino: Speaking of football on NBC, there are rumors that the XFL (a WWE/NBC collaboration) could be making a return. The WWE didn’t exactly deny the rumors, saying Vince McMahon “has established and is personally funding a separate entity from WWE, Alpha Entertainment, to explore investment opportunities across the sports and entertainment landscapes, including professional football.” If the league does get a reboot, don’t expect NBC to be a part of it this time around; the network, hungry for football, didn’t own any NFL rights back in 2001.

Twitter Envisions Future Where Fans Might Pay A Dollar To See A Buzzer Beater

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AXS Audience Growing for WWE Competitor, Beating MMA “On Some Nights”

AXS TV is investing heavily in its partnership with New Japan Pro Wrestling (NJPW); acquiring expensive broadcast rights to Wrestle Kingdom 12. AXS will air the top 3 Title matches from the event in primetime on Saturday January 6th, with the balance playing out over the next 6 Friday nights during their regularly scheduled weekly program. Language barriers prevent NJPW stars from connecting with the audience through gimmicks, so NJPW focuses on the action; targeting wrestling purists while distinguishing itself from the WWE. Chairman Mark Cuban said that weekly viewership numbers continue to increase and that NJPW beats MMA on some nights; predicting a future with “more NJPW and less MMA” on the network.

Howie Long-Short: NJPW is privately held, but you can play the wrestling outfit through AXS as CBS took stake in the company back in 2013. You can also invest in the TV Asahi Corporation, the distributor for NJPW and the company responsible for produce the English television broadcast of Wrestle Kingdom 12. TV Asahi Holdings Corp. trades on the Tokyo Stock Exchange under the symbol 9409. If NJPW is beating MMA on some nights, the UFC is unlikely to find the $450 million/year it’s seeking. Current rights holder FOXA has already low-balled them ($200 million), seeing the WWE as a viable replacement programming (rights expire in ’19). The WWE is the safer bet. Wrestling is scripted, with fans tuning in weekly for the story lines; MMA’s top fighters are showcased in PPV events, resulting in depressed ratings for weekly programming. There are simply too many variables (injuries, steroid use/testing, time off required between fights etc.) for MMA to consistently draw ratings.

Fan Marino: WWE fans will be excited to learn that Hall of Fame announcer and color commentator Jim Ross is the voice of NJPW. Ross’ finest work came during an Undertaker/Mankind match at 1998’s Hell in a Cell. Skip to the 1:46 mark to listen to the legendary call.

Mark Cuban on Vince McMahon and New Japan Pro Wrestling

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WWE Experiences “All-Time Best Quarter”

Stephanie McMahon called Q3 ’17, the WWE’s “all-time best quarter”, as the company grew revenue 14% to $186.4 million, set a company quarterly record for Adjusted OIBDA ($40.4 million) and saw net income rise to $21.8 million (from $11.1 million YOY). The growth is being attributed to an increase in TV rights fees, a rise in WWE network subscriptions (4.4% to 1.52 million subscribers) and the proliferation of live events. As a result, WWE Chief Strategy and Financial Officer George Barrios said the company has increased 2017 guidance; calling for “record revenue, record Adjusted OIBDA results and record subscriber levels.”

Howie Long-Short: 2018 projects to be a banner year for the WWE, with the company anticipating setting another record for revenue generation and targeting Adjusted OIBDA of at least $115 million; which would also set a record. Those records may not last long, though. The company’s television broadcast deal with NBC expires September 30, 2019 and broadcast deals in U.K. and India (2nd and 3rd largest broadcast deals revenue-wise) expire on December 31, 2019. I expect the total value of broadcast rights to increase and for 2020 to be another record setting year for the WWE.

Fan Marino: While the financial picture is pretty, there is speculation that the WWE could be facing a mass-exodus of talent (despite Lesnar staying and Rousey joining); with wrestlers who feel underutilized or underpaid, looking to leave the company. While once the only game in town, Ring of Honor, New Japan Pro-Wrestling and a booming independent circuit now provide viable alternatives. The success Cody Rhodes, Ryback and Alberto Del Rio have found outside the organization has forced guys (and girls) to evaluate their options; and apparently, at least for some, those options more lucrative on the other side.

WWE® Reports Strong Q3 2017 Results & Targets Record Results in 2018

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