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The Hollywood Reporter featured a detailed piece today on how FOX nabbed the rights to WWE Smackdown in a deal that is expected to bring World Wrestling Entertainment over $1 billion and as it turns out, FOX patriarch Rupert Murdoch was intricate to the deal being made.
According to THR, NBC Universal had expected to sign a new 10-year deal with WWE for $360 million per year to retain the rights to WWE programming. Their exclusive right to negotiate that new deal expired on 5/16 when they decided to focus on keeping Raw and letting Smackdown go out on the open market.
This move was a huge positive for WWE as FOX was already waiting in the wings to make their move. Weeks before the NBC exclusive window expired, CAA's Nick Khan (who was representing WWE in the TV negotiations) was contacted by FOX Chairman Peter Rice, who stated that should WWE not make a deal with NBC Universal, FOX wanted to meet with the company immediately for the rights to the Smackdown franchise.
With Smackdown on the free market as of 5 PM on 5/16, a meeting was set for the next morning. On 5/17, WWE, represented by Triple H, Stephanie McMahon, Michelle Wilson and George Barrios among others (but not Vince McMahon) visited the headquarters of 21st Century FOX in Manhattan alongside CAA’s Khan to hear a pitch from Rupert Murdoch as well as Fox Sports executives Eric Shanks and Larry Jones. FOX CEO Lachlan Murdoch joined the meeting via telephone.
Murdoch pitched to the WWE Executives that NBC Universal was “embarrassed” by WWE’s product, but FOX would be all in, integrating Smackdown promotion into FOX broadcasts including Major League Baseball and National Football League broadcasts. The pitch also included the idea of a weekly WWE “studio show” on FS1 as well.
At the meeting, FOX TV screens in the room featured WWE photos, including Ronda Rousey shots, with the FOX and FS1 logos superimposed, pushing the marriage of the two brands. The Hollywood Reporter story indicated that was a major icebreaker between the two sides and that Murdoch also pitched the partnership as a marriage between the Murdoch and McMahon families.
WWE became an important get for FOX as they plan to reboot their company once they have finalized the sale of their movie studio and other assets to The Walt Disney Company. New FOX, as it has been dubbed, will build the nucleus of its broadcasting business around live and sporting events. Smackdown anchoring its programming on Fridays was part of their strategy. They had opted to let UFC go, feeling they couldn't sell it to advertisers, but with WWE as a family-friendly product, the sales pitch was much easier for FOX. WWE was their goal and they sealed the deal.
It should be noted that NBC had the right to match any offer that was $200 million per year, but at $205 million per year, FOX prevented NBC from being able to change their minds and retain Smackdown.
The FOX-Smackdown deal, should it close as expected, will be for five years starting in October 2019, worth over $1 billion dollars total, broken down to $205 million per years. That puts Smackdown on FOX through October 2024.
NBC Universal’s deal for Raw to remain on the USA Network is expected to be $265 million per year and will be a ten-year pact. That deal would be worth $2 billion, 650 million dollars.
WWE had been paid $130 million per year for Raw AND Smackdown under the old NBC deal, so they have hit a grand slam with all the bases loaded here. It is a massive victory for World Wrestling Entertainment, one even larger than first imagined when the FOX news hit.
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