Netflix’s $5 billion WWE deal marks its biggest foray into live events

Streaming giant Netflix has sealed a historic $5 billion historic 10-year deal with the World Wrestling Entertainment (WWE) to stream wrestling matches live.

Under the terms of the deal, Netflix will get Monday Night Raw for 10 years, with a chance to end the contract after five. Debuting in 1993, Raw has captivated millions with its high-octane action and captivating storylines. With 1.5 million viewers tuning in each week, it's not just WWE's most-watched program, it's a pop culture phenomenon that launched the careers of iconic superstars like Dwayne "The Rock" Johnson and John Cena.

Notably, NBCUniversal’s Peacock still has the rights to the WWE’s premium events such as the Royal Rumble and Wrestlemania. As well as, a library of WWE Content.

“By combining our reach, recommendations, and fandom with WWE, we’ll be able to deliver more joy and value for their audiences and our members,” Netflix Chief Content Officer Bela Bajaria said in a statement. The company has also licensed the rights to WWE’s documentaries and original series.

In response to this news, shares of TKO Group Holdings, which owns WWE, surged 21% in premarket trading in New York on the news. The conglomerate is also adding former wrestler and actor Dwayne “The Rock” Johnson to its board according to Bloomberg.

The WWE is the latest major live event to shift from cable TV to streaming. It joins the likes of Ultimate Fighting Championship (UFC), also owned by TKO, which offers many of its matches on ESPN+, and the National Football League which sold Amazon the rights to Thursday Night Football. 

For Netflix, this move marks its continued reliance on a mix of original and licensed content as it looks to grow ad revenue. During its 2023 Q4 earnings call,  Netflix co-CEO Ted Sarandos noted that licensed content was a better deal when running an advertising business. “This should add some fuel to our new and growing ad business,” Sarandos said.

Netflix which has 247 million subscribers globally has been struggling with subscriber growth and has since turned to an ad-supported offering to reduce friction in signups, especially in markets like Africa where the purchasing power is low. 

A shift in its content strategy towards live events is a bet the streaming giant hopes will pay off. 

In November 2023, Netflix debuted its inaugural live sports broadcast, showcasing a unique golf competition between PGA professionals and Formula 1 racers. Subsequently, the streaming platform unveiled its upcoming venture into live tennis coverage, scheduled for March, featuring a match between seasoned player Rafael Nadal and the emerging talent Carlos Alcaraz.