MR. TITO: Did Netflix Make a Massive Financial Mistake by Acquiring WWE RAW?
During 2005, I wrote an article about how Viacom may have significantly overpaid to host WWE programming, specifically WWE Monday Night RAW for its then TNN channel that morphed into Spike TV. I used a term from an economics course called the “winner’s curse”, which describes a situation where a bidder drastically overpays for a good/service because of their over-estimation of its value. Viacom negotiated WWE’s 2000 deal during late 1999, the peak of the WWE where RAW was seriously drawing 6-8 million nightly thanks to being headlined by primarily by Steve Austin.
But once Viacom obtained and then began hosting the WWE, viewership began to decline. It wasn’t just due to RAW switching networks from USA Network to TNN (later Spike TV), but the WWE product became over-exposed by attempting to host two separate 2-hour shows per week, Sunday Night Heat for 1 hour, and then having Pay Per Views for once a month. On top of that, WWE lost Stone Cold Steve Austin due to injury and he was gone from Survivor Series 1999 (remember the STUPID car angle) until returning to in-ring action during the Fall of 2000.
While the year 2000 appeared exciting with Triple H elevated to a new role, babyface Rock on top, the rise of Kurt Angle, Chris Jericho finding his groove, and an influx of many exciting free agents such as the Radicals (Saturn, Benoit, Guerrero, & Malenko), Tazz, and the Dudleys along with the likes of Edge and Christian getting better, WWE just wasn’t as compelling without Steve Austin on top. Wrestlemania 16 really impressed upon this, as the “McMahon in every corner” main event SUCKED and WWE’s attendance and RAW viewership began to decline. Yet, the ink was dry on that Viacom deal.
RAW joined TNN during September 2000 and from then on, RAW lost millions of viewers from there until 2005 when viewership bleeding stopped after the move of John Cena to RAW following Wrestlemania 21. On top of all of that, Viacom did not see strong advertising dollars from RAW being their flagship show because advertisers were scared to run ads on RAW thanks to pressure from outside political groups (notably Parents Television Council or PTC, which the WWE stable “Right to Censor” was based off of). Furthermore, RAW wasn’t proving to be a viewership boost for TNN/Spike’s other programming as anticipated and ditto for MTV where Sunday Night Heat resided.
Viacom took a bath on overpaying for a declining RAW television show, while also getting lowballed by advertisers. And think about this… By paying $500,000 per show for 52 weeks per year (source: L.A. Times) which equates to $26 million per year (versus what USA Network was paying at $100,000 per show at $5.2 million per year), Viacom ended up losing money on the deal and WWE later reverted back to NBC/Universal’s arms for RAW. Plus, Viacom purchased WWE stock and invested in the disastrous XFL season of 2001.
They purchased RAW for more than 5 times of what USA Network was paying… And then WWE declined after its September 2000 debut. Boy, that 2001 year was rough with the botched WCW/ECW invasion angle, 2002 botched the NWO angle and further pushed Triple H down our throats, Kane was unmasked and revealed as a necrophiliac, and many other bad moments that were aired on TNN/Spike TV with poor advertising rights and weak spillover viewership.
Fast-forward to 2024. NBC Universal was paying $200 million per year to host WWE Monday Night RAW. Netflix splashes in and inks a 10-year, $5 billion deal which equates to $500 million per year. That is a 150% INCREASE to host Monday Night RAW. Wow, holy crap…
So, how has WWE RAW performed on Netflix so far during 2025, as the show started off during January?
(Viewership numbers courtesy of Gerweck.net)
Date Average Viewership per Month
01-2025 3,875,000
02-2025 2,825,000
03-2025 3,020,000
04-2025 3,075,000
05-2025 2,700,000
06-2025 2,680,000
07-2025 2,675,000
08-2025 2,800,000
09-2025 2,440,000
Ouch. In just 9 months, RAW has lost over 1.4 million average viewers.
And keep in mind, these aren’t just United States numbers seen previously by Cable/Satellite viewers which were available to 70 million households. These are WORLDWIDE numbers spread amongst the 300 million Netflix subscribers globally.
OUCH!
1.4 million lost viewers… Sounds like Netflix is already feeling the effects of this deal and shall likely opt-out at the 5-year mark of this 10-year, $500 million per-year deal.
Sounds like they fell victim of the WINNER’S CURSE, too.
Remember, the announcement of the Netflix deal occurred during January 23rd, 2024. Newly formed TKO and Netflix likely negotiated this deal throughout 2023, as Netflix executives were probably seeing viewership increases that year, attendance boosts, and other increasing WWE metrics thanks to the Bloodline storyline hitting a peak through Wrestlemania 39. WWE was back on the upswing and on top of that, they were about to add The Rock as a TKO Board Member. It’s very likely that Netflix had inside-knowledge that the Rock was going to be featured somehow with the WWE during 2024. Hence, they whipped out the checkbook and made this massive 10-year, $5 billion deal to acquire RAW.
Netflix is also hosting Premium Live Events for WWE for international markets, as they were waiting for WWE’s Peacock deal to run out through the end of 2025 or when the WWE exhausted the number of PLE events hosted per year. Yet, the WWE screwed Netflix out of getting a chance at hosting PLEs in the United States which is what Netflix probably really wanted. Instead, TKO/WWE inked a 5-year, $1.6 billion deal to have ESPN+ host WWE’s big PLE events. That’s gotta hurt and really makes me think that the 5-year opt-out clause is happening.
As hoped, The Rock does indeed make his WWE return and was a MASSIVE part of Wrestlemania 40. Awesome, as the Netflix executives high-fived afterward… Then, the Rock only shows up following Wrestlemania 40 TWICE for the WWE (once on the RAW after WM 40, and then a random Fall 2024 PLE). However, the Rock would appear at the very first RAW on Netflix on January 6th, 2025. All is good, right? That should guarantee more appearances by the Rock during 2025, right? Well… About that. Rock barely did anything on the first Netflix RAW and the rumored set-up for Rock vs. Roman Reigns didn’t happen! In fact, the Rock would disappear and then re-appear on Smackdown only to hype his appearance at Elimination Chamber 2025 (both not on Netflix RAW). Then, the Rock would never be seen on WWE programming again…
But that’s fine… No Rock, no problem… Roman Reigns would be moved to RAW and contribute heavily to RAW on Netflix. Oops, he took an extended vacation following Wrestlemania 41 and then again to later film the new Street Fighter film. Even when you have Roman, he’ll cut promos more than wrestling an actual match. The ONLY time that Roman ever wrestled on RAW was on that FIRST RAW on Netflix on 1/6/25 when he defeated Solo Sikoa. After that, he only wrestled 5 more times and each of those were on PLE shows.
I mean, I guess having Seth Rollins and CM Punk aren’t bad… When are their biggest matches?
Oh that’s right, both of those wrestlers save their best for PLEs or NBC/Universal’s Saturday Night’s Main Event.
$500 million per year for RAW that lost an average of 1.4 million viewers already, world-wide, and does not feature WWE’s top superstars because they are part-timing it or saving their best for PLE/SNME.
Netflix LOST, bigtime, to the “Winner’s Curse”. They paid 150% more than the previous owner of RAW coverage and now in order to recoup those funds over the next 5-years, at least, they’ll either have to (a) reduce expenses elsewhere or (b) raise subscription rates. Netflix has almost $15 billion in debt, too, which will need to be financed and paid back as well.
On top of all of that, Netflix is eyeballing the NFL Sunday afternoon contract that is likely to be opted out of by the NFL during 2029, COINCIDENTALLY the last year of the first 5 years of WWE’s deal with Netflix. I theory, Netflix could opt out of the WWE deal through 2029 and then use that additional $500 million per year to invest in the NFL. I believe Netflix is going to break the bank to get this Sunday afternoon TV deal, and reportedly, the NFL wants to begin negotiations for this 2029 deal NOW rather than in the upcoming years that are closer to 2029. If Netflix obtains Sunday afternoon coverage for 2029, it’s a 100% guarantee that RAW gets dumped on its head when Netflix opts out of that 10-year deal by the 5th year.
Then, I believe, will be the REAL question on if the WWE could ever obtain $500 million per-year again from a television deal… We’ll have to see how warm Warner Bros. Discovery, which could be split up by then, feels about AEW in 4 years while NBC/Universal is always there to pick the WWE back-up. ESPN could go all-in with the WWE, too, if they are really feeling good about their ESPN+ deal to host PLEs. Skydance Paramount could become a shoulder to lean on with the WWE, as TKO inked a big deal with Paramount+ to begin hosting UFC events.
In my opinion, I just don’t see broadcast FOX and CBS losing their NFL deals. Their parent companies now have the capital to defeat Netflix, especially since CBS was acquired by the cash-rich Skydance company and the Ellison family that owns them. FOX stole over $80 billion from Disney years ago with the 20th Century FOX deal and the Murdoch family are loaded as well. Netflix has a ton of debt and high expenses to deal with without such financial backing. Personally, I don’t think that Netflix can endure a higher price point and they’ll have to boost subscription rates if they overpay for the NFL. Say, that’s another Winner’s Curse situation if the NFL, too, declines with viewership by becoming partially exclusive to a streamer versus a broadcast channel for Sunday afternoon NFL games.
Regardless of investing more in the NFL, the WWE deal is over with Netflix. Place a pin on this column… WWE has already deteriorated in weekly viewership on Netflix’s platform and I believe the WWE’s own mistakes of price gouging and selling out to the highest bidders (ESPN, Saudi) will cause its own fanbase to decline in a few years. Plus, without guys like the Rock or Roman consistently being there, fans are getting burned out on seeing Cody, Seth, and Punk weekly while there just isn’t a strong crop of developmental stars ready to rise-up and take top spots like the Ohio Valley Wrestling and Florida Championship Wrestling/early NXT call-ups did. I’m just not buying Bron Breakker, no matter how hard they try to push him (like having him turn on Seth Rollins).
It took 9 months, and the WWE has already under-performed on Netflix with RAW. Netflix bought when WWE’s Bloodline storyline was at its peak and then began broadcasting WWE after that peak. No Rock, not much Roman, and RAW is just an infomercial for PLEs airing on another streaming service.
Winner’s Curse has happened to Netflix and they still have 4 more years at paying WWE at least $2 billion before the 5-year opt-out clause hits.
Oops, WWE did it again… Contracts are contracts, and WWE got their money for the next 4 years after their first rough year with Netflix. Sucks to be compared to Viacom.
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