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July 9, 2018

Why Fox Was Attracted To WWE, What Happened With The ESPN - WWE Negotiations, More On TV Deals

Sports Business Daily has a new article looking at how WWE's new deal with Fox marked the end of more than two years of negotiations among TV networks looking to land deals with WWE and the UFC. The article also looks at how two of the top entertainment agencies went head-to-head for their clients - Endeavor worked the five-year $1.5 billion deal between UFC & ESPN while Creative Artists Agency (CAA) crafted the $2.34 billion deal between WWE and NBCUniversal & Fox. Below are a few notes from the piece:

* While considering a future with or without UFC, Fox started looking at other sports content to fill nights on its broadcast network as part of a new strategy that focused on live programming in primetime. It sounds like Fox first started looking at WWE some time in 2017 and Fox insiders were attracted to the consistently high ratings & passionate fanbase that WWE has.

* WWE's negotiation period with NBCU ran until mid-May of this year but officials had already been making the rounds to get to know other TV executives through a series of "get-to-know-you meetings. The networks had one significant issue - Endeavor owns UFC and Endeavor's Ari Emanuel is friends with Vince McMahon, who asked Ari to represent WWE during media talks. Networks did not feel comfortable negotiating with the same person who was working on behalf of two competing sports brands. This was seen as a conflict of interest and networks made it clear to WWE officials. WWE hired CAA, a top rival of Endeavor, soon after a WWE show in Los Angeles during the spring of 2017 where Fox Sports President Eric Shanks pulled Vince to the side to point out the conflict of interest. Fox pushing for the change annoyed Ari and indicated that UFC & Fox would have trouble coming to a deal.

* Stephanie McMahon, Triple H, Co-President George Barrios and Co-President Michelle Wilson met with ESPN executives 4 times from December 2017 through the spring. ESPN had upped their coverage of WWE and was receptive to talks but it was soon clear that a deal was not going to be reached. The issue between ESPN and WWE came down to scheduling as RAW & SmackDown are produced every week and ESPN can't afford to give any sport 52 weeks in a year.

* ESPN did consider WWE programming for their ESPN+ streaming service but that would have directly competed with the WWE Network.

* WWE soon targeted Fox and made it clear they were interested. Fox did the same. Shanks and other Fox executives were shown on camera during a May 2017 RAW show from the Staples Center in Los Angeles. WWE was still in the exclusive window with NBCU, which ran until mid-May, but Stephanie, Triple H and other WWE executives made a point to visit the Fox lot for an informal meet & greet. WWE told Fox executives then that they could not discuss terms of a potential deal until NBC's exclusive window closed but both sides were interested.

* Bonnie Hammer, a longtime friend of WWE's and chairman of the NBCU cable entertainment group, was leading the renewal talks with WWE. Mark Lazarus, chairman of NBC Broadcasting & Sports, oversees all major sports rights negotiations for NBCU but they view WWE as an entertainment property so Hammer led the talks while he was on hand to participate in strategy sessions and offer advice. NBCU officials knew Fox was interested in WWE but they believed WWE ultimately wanted to stay on the USA Network. They also believed WWE fans wanted consistency as they knew where they could go to see RAW on Mondays and SmackDown on Tuesdays.

* WWE had been averaging $130 million per year for each show in previous deals and that figure was considered well below the market value by network executives. WWE officials knew they were negotiating from a strong position and decided to split their TV package in two. CAA told Hammer they wanted $265 million per year for RAW and $200 million per year for SmackDown - a 358% increase. NBCU's exclusive window closed on May 16th and they informed WWE they would take RAW for $265 million but they would not renew SmackDown. The next day WWE executives visited the Fox offices in New York City for the meeting that included Rupert Murdoch. The $205 million per year deal that would move the blue brand back to Fridays was settled on that day as both sides quickly realized they were close to an agreement. WWE signed the five-year SmackDown deal with Fox and renewed a five-year RAW deal with NBCU for USA.


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