News broke yesterday that WWE had agreed to sell the exclusive US streaming rights of the WWE Network to NBC Universal’s Peacock platform.
Soon after, reports emerged indicating that WWE was set to pocket in excess of $1 billion, a report that you can read more about by clicking here.
While the deal is clearly exceptional for WWE, Dave Meltzer noted on the latest Wrestling Observer Radio that it “makes no sense” for Peacock:
“Economically the deal makes no sense for them (Peacock). Essentially they’re paying $200 million+ a year to get about $66 million worth of revenue in. If that was our business, I think that we wouldn’t take it, but the mentality is that they’re looking for subscribers, and by signing WWE, they’re guaranteed in theory 1.1 million subscribers, and they think much more because they’re gonna be a lower price than $9.99. I don’t know if it’ll be much more.
“They think they can sell ads, because that’s the whole key is it’s an ad-supported stream, so they can get their (subscriber) numbers up to sell more ads by having the free people in. So the free people do count to them even though they will get no direct money from those people.
“So that’s the mentality, and the mentality is that WWE Network always had a problem with churn. They would get subscribers every month and then people would drop it. And then they would sign up for WrestleMania and a pretty large percentage that signed up for WrestleMania would drop it over the next three months. And the Peacock people feel that they’re not only getting a lower price, but they’re also getting access to so much more. You’re gonna get other sports, you’re gonna get all these entertainment shows. So they think the deal was so good that they would not have that churn, and without that churn, the number would be well over 1.1 million.”
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For additional information on the backstage reaction from within WWE towards the Peacock detail, you can click here.