Home Business WWE appears to spice up its sponsorship income as reside occasions return and a key media deal expires

WWE appears to spice up its sponsorship income as reside occasions return and a key media deal expires

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WWE appears to spice up its sponsorship income as reside occasions return and a key media deal expires

Chief Brand Officer and TV Personality of WWE, Stephanie McMahon delivers her keynote tackle on the opening of Sports Matters at the side of All That Matters 2016 in Singapore on September 14, 2016.

Roslan Rahman | AFP | Getty Images

WWE and trade analysts agree: The professional wrestling and media firm can squeeze extra income out of sponsorship offers.

The firm leans on the mental property constructed round performers comparable to famous person personalities like The Undertaker, John Cena, Dwayne “The Rock” Johnson, Roman Reigns and Bianca Belair. Revenue from its reside occasions, that are returning as Covid restrictions ease, and media choices are fueled partly by sponsorship {dollars}. 

WWE this 12 months goals to fill soccer stadiums and develop its programming, in response to Frank Riddick, WWE’s chief monetary officer. Riddick, who took over the job in November, mentioned after final week’s earnings launch that the corporate is making sponsorship a precedence this 12 months.

In 2021, WWE reported roughly $72 million mixed for promoting and sponsorships in its media and reside occasions companies.

WWE made greater than $10 million in sponsorship charges alone for final month’s marquee Wrestlemania 38, government Stephanie McMahon mentioned final week. That was a document for the two-day occasion held at AT&T Stadium in Dallas. WWE’s sponsorship companions embrace Toyota, DoorDash, Rocket Mortgage and Rihanna’s Fenty Beauty cosmetics line, mentioned McMahon, who can also be the daughter of longtime CEO Vince McMahon.

Analysts recommend the WWE is undervalued in relation to sponsorship income, estimating the corporate lures round $35 million per 12 months simply from sponsorships. That’s lower than combat-sports firm UFC, which attracts greater than $100 million yearly, in response to a Guggenheim Partners be aware to purchasers final month.

While WWE lags behind UFC in total reputation, its followers are the more than likely to note sponsors, in response to sponsorship consulting agency IEG. Sixty-seven % of WWE’s followers usually tend to eat manufacturers related to the corporate, in response to IEG’s analysis, which used information from polling outfit YouGov. That’s forward of the 55% common for the group of the 11 largest sports activities leagues, together with the NFL, which is by far the preferred sports activities group within the United States.

“All that does is spell potential and opportunity,” mentioned Peter Laatz, IEG’s international managing director. He mentioned he thinks WWE can clear over $100 million in annual sponsorship income.

But he additionally famous WWE won’t be the “right fit for the most affluent categories or top tier brands.”

The WWE didn’t return a CNBC request to debate its sponsorships.

WWE’s place within the streaming world

WWE will get most of its income from its media enterprise, accounting for $278.1 million of its $333.4 million total income within the quarter ended March 31. Advertising and sponsorship income within the media phase grew 27% to $19.8 million from the year-ago interval.

The firm is getting ready for a key media offers amid an “increasingly cluttered streaming marketplace,” WWE President Nick Khan mentioned on final week’s earnings name. Hulu’s deal for day 2 rights round WWE’s weekly “Raw” program expires this 12 months.

Day 2 rights enable subscribers to observe “Raw” and “Smackdown,” one other weekly present, 24 hours after they first air. Raw airs reside on USA Network, and Smackdown is proven on Fox. After 30 days, subscribers to NBCUniversal’s Peacock service can watch the reveals. (In 2021, WWE entered a five-year cope with NBCUniversal for a reported $1 billion to license its library and present reside foremost occasions on Peacock.)

Khan additionally steered a brand new participant might enter the sports activities streaming recreation.

“It’s just a matter of time before Netflix goes with live,” mentioned Khan. He added the reside occasions generate the best client impressions for networks and streaming corporations.

Netflix is certainly seeking to bounce again as its outcomes endure whereas viewers shake off pandemic restrictions and head again out into the world. In April, Netflix reported a decline in subscribers and warned of tens of millions of extra losses within the months forward. Co-CEO Ted Sarandos mentioned on the time he would not see a worthwhile manner for the streamer to get into sports activities, though its “Formula 1: Drive to Survive” sequence has been a smash hit.

Netflix most likely would not be excited by WWE, anyway, in response to longtime media rights advisor Lee Berke, for the reason that wrestling firm is already tied up with Peacock. He mentioned it might make extra sense for the NBCUniversal service so as to add extra WWE rights.

“That’s a major relationship for them, and there’s a lot they can do to build on that,” mentioned Berke, CEO of LHB Sports, which advises the sports activities leisure trade. “But if [Netflix] is going to make a move for WWE, I see them making an aggressive for all of their content or major live events.”

WWE can also be abroad growth, notably in India, residence to a billion folks and a rising center class. WWE estimates its content material is proven in additional than 180 international locations. The firm mentioned it drew 25 million viewers for an unique occasion showcasing U.S. WWE wrestlers competing in opposition to India-born performers. Wrestlemania drew greater than 50 million viewers final month in India.

Khan, the WWE president, referred to as India a “hugely important market.” But, he added, WWE is ready for networks to complete bidding on rights to cricket – the preferred sport within the nation – earlier than the corporate determines its future media market there.

Disclosure: Peacock proprietor NBCUniversal can also be the guardian firm of CNBC.

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