Originally published at https://www.postwrestling.com/2019/08/20/wwe-confirms-that-nxt-is-moving-to-the-usa-network/
On Tuesday morning, World Wrestling Entertainment issued a press release confirming that NXT would be moving to the USA Network beginning September 18th.
The move will see NXT expand to two-hours running weekly from Full Sail University from 8-10 pm Eastern, getting a two-week jump before All Elite Wrestling launches on TNT.
In the press release, the company pointed out NXT has been in the Wednesday night slot since 2015, which mirrors the comments from Paul Levesque on the last NXT conference call regarding their show having the night prior to AEW.
NXT will air on the WWE Network on a 24-hour delay, airing Thursday nights at 8 pm Eastern on the streaming service with TakeOver specials remaining in their current form.
Mauro Ranallo has confirmed that he will be calling the show alongside Nigel McGuinness and Beth Phoenix and will be traveling to Full Sail University each week.
Vince McMahon was quoted in the release stating: “The move to USA Network provides an opportunity to deepen our relationship with NBCUniversal and further build the NXT brand. Over the long term, our goal is to develop a following that can be monetized to the same level as our flagship programs, Raw and SmackDown”.
According to a source that spoke with Dave Meltzer, the move to USA comes with a rights fee. Said to be somewhere around $50mil (on the down-side). Take it with a grain of salt. But the stock has reacted favorably to this news, up nearly 3.25% as of noon eastern (compared to the S&P 500 which is down approx -0.25%). The WWE stock is up almost $10 from the level it traded at a week ago.
Given WWE guidance of FY revenue, this estimate would represent nearly 5% annualized revenue increase that may not have been planned for during forecasting 2019. Of course the revenue will not all be in 2019, but doesn’t appear terms of the deal are officially out. From an outsiders view, whatever the miss was on the UK deal, this seems to have made up for at least in part. This is going to carry Q3 earnings I would think, given there is no Saudi show to boost the quarter. As an investor - this is great news
In simple terms:
if WWE was guiding to FY 2019 revenue of $1bn, and this deal brings them annualized revenue of $50mil, this would be 5% of the $1bn. Assuming there was no plan to move NXT to Cable (and getting a rights deal on it), that would be a 5% increase in estimated annualized revenue.
I defer to POST Economics expert Brandon Howard for all actual interpretations, but that is how I have thought of it.
This is not a recommendation on the stock, just trying to provide some simplistic context from a business standpoint
I need you to call into the Hangout this week to have this discussion with the guys.
I will aim to do that. The other topic I want to get into is apparently Bushiroad is now public in Japan and Bloomberg wrote a very revealing piece on New Japan Pro Wrestling being a growth catalyst for them. Some very interesting figures used in the piece. I think John will post it later today.
EDIT: Up 5% as of 1:30 eastern.
EDIT: finished the day up 3.59% as the market tailed off further in the last hour of trading. Comparison, S&P was down .80%