In an extensive interview done earlier this month, WWE CEO Nick Khan discussed what the company is looking forward to with the impending Endeavor merger, adding in an interesting line about their Peacock deal coming up in a few years.
In his discussion with Lightshed Partners, Khan was asked about whether the new WWE & UFC merged company would be interested in packaging their rights together and perhaps delaying the next round of TV rights to align everything.
Khan said WWE is “ready to go now” when it comes to Raw and SmackDown negotiations, but specifically mentioned that one thing not being talked about is their WWE Network and PPV/PLE licensing deal to Peacock which is up just months after the UFC’s deal with ESPN is in 2025.
“That Peacock deal? The timing of that is interesting to us,” he said.
As he’s done in the past, Khan put over the Peacock relationship and that he feels NBCU leadership would say WWE fans have contributed greatly to their 20+ million paid subscribers.
When asked if WWE would be interested in a similar model to what UFC and ESPN have with PPVs and live events, Khan said he thought the UFC/Disney deal was “extraordinary” and pointed out how UFC retained their rights to their Fight Pass streaming service as a hedge.
Khan said their preference is to license the WWE Network product, but that if it can’t be done for the right price, they will just take it back in house.
Here are some other notes from the hour-long talk that took place on April 7th.
More rights talk, a return to PPV?
Khan said there isn’t interest in going back to linear PPV due to those providers taking half the money “just for plugging in.” They would consider going back to the digital PPV model if it was accessible for the fanbase and priced right.
With the rights for both Raw and SmackDown, they “want the best sized deal possible” and while they hope they remain with both NBCUniversal and Fox, “if we get out of the exclusive negotiation window, the marketplace is going to be robust.”
Asked about their ratings being down compared to the past going into these rights, Khan said they look at ratings vs. everything else currently and while linear and cable ratings are down, they are up.
“We think we have a hot hand at this moment in time and we think, comparatively speaking in the marketplace, we’re doing pretty well,” he said, noting there are many more buyers than there were five years due to the presence of streaming providers.
Khan said he doesn’t know if the marketplace is showing much of an appetite for a split between linear and streaming when it comes to splitting rights, using the NFL as an example.
“Would we? Sure. Do we think the marketplace will allow for that? Not as sure,” he said.
Asked about whether the Raw and SmackDown rights have to be negotiated together, he used the NHL as an example of deals not being done together and cited their big rights increase despite people saying their ratings were down too.
A return to a more mature WWE?
Asked if WWE would consider more mature content that is more geared toward what they did in years past, Khan said there has been a “conversation point” amongst themselves and NBCU about the 10 PM hour of Raw and what they could do with that, adding they are nowhere near a decision.
On paying wrestlers more
The criticisms of UFC fighter pay came up which Khan said is the UFC’s business to manage and “goes untouched by us” in this eventual merged company.
With wrestler pay, Khan said, “We think a lot of them are well compensated. Certainly, all talent wants to be paid more and management wants to try to manage those costs.”
He said that their individual deals with talents are unique and WWE is “confident in our position in the marketplace.”
He did add that depending on whatever the rights fees increases turn out to be, “we expect a lot of that to drop to the bottom of the line,” intimating talent would see some benefit.
The benefits of Endeavor
There were two specific points Khan brought up that they are looking forward to having Endeavor help with. One is sponsorship as despite hitting highs for the Royal Rumble and WrestleMania, he admired how Endeavor helped grown the UFC sponsorship number from $35 million pre-sale to nearly $200 million post-sale.
The other is Endeavor’s relationships overseas which they think will be a big benefit with various rights deals throughout the world as they have “boots on the ground” in many regions that WWE does not.
UK & India media rights, Saudi relationship
Khan said UK media rights (coming up in the next few years) and a “hyper-focused” approach in India will be focuses. He said the India-targeted WWE Superstar Spectacle in January 2021 was viewed by 25 million people live and nearly 40 million over a three-day period. He expects things to pick up in India following the Zee-Sony merger as they can begin planning their next live event there.
Khan said there are no issues with the Saudi Arabia relationship post-merger announcement despite Endeavor’s past moves in pulling business out of the country. They are looking forward to two Saudi events this year.
Corporate cuts
As has been stated before, Khan said there are cost synergies to be had with the new company with “obvious overlap” between the two. They want to become as lean and mean as possible.
In terms of cutting a significant headcount, he said they are looking at cutting “other costs” and need to be protective of the creative and production teams and are not looking to cut there.
