Netflix (NFLX) and TKO Group Holding’s WWE (TKO) announced a new partnership early Tuesday that will bring WWE’s flagship program Raw to the streaming service, beginning January 2025.
The 10-year deal marks Netflix’s first big venture into the world of live sports entertainment while Raw will be leaving linear television for the first time since its inception 31 years ago. The program currently airs on NBCUniversal’s USA Network and draws in 17.5 million unique viewers a year, according to the companies.
While financial stipulations of the deal were not disclosed, multiple reports said the agreement is valued at more than $5 billion.
Shares of TKO, which also serves as the parent company of UFC, soared more than 20% in early market trading. Netflix shares traded flat at the open after jumping roughly 2% in premarket trading.
Wells Fargo analyst Steve Cahall described the move as a “logical next step” in a reaction note to clients.
“It adds to NFLX’s ability to continue to look for growth beyond paid sharing as new content = more ads and/or more subs,” he said. “We think NFLX’s #1 focus is driving scale in ads as it needs reach and frequency to carve out a seat at the top table with US ad buyers.”
Still, the analyst noted WWE is not quite the same as major sports rights given the financial gap between the two entities sits at about $500 million annually. “The inevitable question is ‘when will NFLX get into live sports?’, but we think that’s still years away,” he said.
The news comes as TKO also announced Dwayne “The Rock” Johnson to its board of directions. Netflix, meanwhile, is set to report quarterly earnings after the bell on Tuesday.
