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On Tuesday, WWE officially merged with UFC to form TKO Group Holdings under the parent company Endeavor.
The merger closed ahead of a period in which WWE will negotiate its next series of broadcast rights, which WWE president Nick Khan told CNBC would begin this fall.
The negotiations include the rights to the company’s weekly flagship shows Raw and SmackDown, which currently air on USA Network and Fox respectively.
According to wrestling journalist Dave Meltzer, Amazon and Disney (FX) have emerged as the leading candidates to land SmackDown.
WWE is expected to ask for $300 million a year for the show, an asking price Fox might not be interested in meeting. Currently, Fox broadcasts the program each Friday for $205 million a year.
Amazon Prime and Disney — or any suitor — could move SmackDown to a different day of the week, if it chooses.
One possibility is broadcasting the show on Wednesdays to go head-to-head with rival promotion AEW.
Khan and WWE enter negotiations with leverage. SmackDown provides live year-round content. And people watch it.
Year to date, the show has averaged around 2.2 million viewers. More people watch WWE per week than the NBA regular season across ABC, ESPN and TNT.
And while the ratings for SmackDown would undoubtedly dip moving from a broadcast network to FX or Amazon, the product has arguably more value to cable and streaming than it does to the Big Four (Fox, NBC, CBS, ABC).
Specifically, Monday Night Raw is the reason Comcast’s USA Network remains amongst the most-watched channels on cable. Raw has averaged around 1.8 million viewers this year.
In regards to streaming, Metlzer says one to two million users pay to stream WWE premium live events (PLEs) each month on Peacock, another Comcast property.
SmackDown would add similar value to FX and Amazon.
FX has struggled to remain relevant as scripted programming pivots to streaming. Amazon Prime, meanwhile, lacks on-demand content to keep pace with the ever-convoluted streaming space.
For those reasons, Netflix and Apple could also show interest in WWE programming.
Either way, Nick Khan hopes to see the bidding war remind him of the 2020 face-off for 21st Century Fox, when Disney edged out Comcast
“You’ve seen bidding wars between Comcast and Disney on things like the Fox assets, which ultimately went to Disney, and Sky, which ultimately went to Comcast,” said Khan.
“It does make one wonder how this might look down the road as both companies and as TKO enters into these negotiations. We think ratings, relevancy and revenue for both properties are off the charts, and, of course, we always want to grow that.”
Prediction: SmackDown signs with Disney.