WWE seemed to start a firestorm when they signed their TV deal with NBC Universal. WWE’s stock plummeted, and the start of at least four known investigations began. WWE went from having their highest stock of all time to a low end stock that many didn’t see coming. The owner of the company, Vince McMahon, was said to have lost $350 million over the ordeal. He is no longer a billionaire, but he still has $750 million. Fundraiser anyone?
The TV deal was lower than what WWE wanted, and many expected more. However, it’s not as if the WWE went into negotiations asking for a low ball price. In fact, they did just the opposite and THAT seems to be why they got such a low deal. Reports have surfaced claiming that WWE had drawn interest from at least one major sports channel.
When WWE told them about the price they wanted, the network immediately backed off. It’s said that in negotiations, WWE went in talking high from the word “go,” and thus lost out on a better deal than what they ended up getting. According to sources, it is said that there is a perception within the TV industry that WWE is “cheap programming” that will help a station with ratings.
Whether cheap or not, WWE is a proven ratings draw. All of their TV properties combine for an average rating of a 2.0 or higher. WWE RAW alone gets an average 3.0 on Monday nights, the premium night for TV. On top of that, RAW grossed over a billion dollars for NBC Universal’s USA Network the last two years.
That being said, WWE pulls in ratings on top of money. So while they can be called cheap by anyone, they have been around the TV scene for 20 years now and have done well the entire time. That being said, clearly the WWE is worth a good investment. The issue the WWE ran into was trying to present that for the money they wanted. That is why NBCU went up from their last contract with the WWE, but they didn’t go up a massive amount.
NBC Universal most likely felt that they would be the only place the WWE could get a deal after potentially hearing about how negotiations were going with other networks and then they ended up offering them a TV deal to keep them. The deal was a business move. Many may ask, why didn’t WWE decline and just wait it out? If NBCU was the only place offering money to the WWE, it was at least something. So the WWE took it instead of having nowhere to go.
The idea going in was that the WWE would attempt to stay with NBCU, but they would listen to outside offers to see if there was a bigger interest somewhere else. The problem with the whole thing was that WWE sort of shot themselves in the foot during negotiations and ended up with the deal they did.
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