WWE shares skyrocket on report of $1 billion deal with Fox

0
52
views

Like a victorious wrestler preening on the top rope, shares of World Wrestling Entertainment Inc. climbed more than 12% Monday following a report that the entertainment giant had snagged a five-year television deal with Fox worth more than $1 billion.

The Hollywood Reporter said a deal in principle has been reached to bring the WWE’s popular “SmackDown Live” to Fox starting in October 2019, for about $205 million a year. That’s about three times what Comcast Corp.’s CMCSA, -1.16%   NBCUniversal currently pays for the weekly wrestling show, which airs on USA.

USA would keep the WWE’s other show, “Raw,” according to the report. “SmackDown” and “Raw” are consistently among the most-watched shows on cable TV.

WWE WWE, +12.52%   had a higher bid from a third party, the Hollywood Reporter said, but chose Fox because of its ability to cross-promote its content through Major League Baseball and National Football League games. Previously, Variety had reported that Amazon.com Inc. AMZN, +0.70%  and Facebook Inc. FB, +0.99%   had interest in the bidding.

The move to Fox comes as its parent, 21st Century Fox FOX, +0.48%  , is seeking to sell a number of properties to Walt Disney Co. DIS, +0.13%  . While the Fox network is not among the properties for sale, Fox Studios is, leading many media experts to predict that the network will likely wean away from traditional programming, such as sitcoms and dramas, in favor of more live sports and reality shows.

WWE shares rose 12.5% on Monday, to $58.30, and have shot up almost 90% year to date and 194% in the past 12 months. 21st Century Fox shares are up almost 10% this year, and up 38% in the past year, while the S&P 500 SPX, +0.74%   is up 2.2% and 15%, respectively, over those time frames.

21st Century Fox and MarketWatch parent News Corp. NWSA, +0.45%  share common ownership.