World Wrestling Entertainment, Inc. (NYSE: WWE) stock had a huge week last week, gaining 18 percent and finishing the week above $50 for the first time. The majority of the big move happened after new reports suggest WWE’s upcoming TV contract renewals could be a huge payday for the company.
The Hollywood Reporter cited sources who say WWE and Comcast Corp. ( CMCSA) subsidiary NBCUniversal are in the late stages of a new TV contract for WWE’s weekly “Raw” program that could be worth up to three times the value of the current contract. NBC currently airs WWE’s “Raw” and “WWE SmackDown” shows on the USA Network.
If those reports are correct, WWE’s new deal with NBC could be worth $400 million per year.
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NBC is reportedly not interested in renewing its deal for “WWE SmackDown.”
CFRA analyst Tuna Amobi says NBC is not dropping “WWE SmackDown” due to lack of interest.
“NBC not renewing [‘WWE Smackdown’] probably has more to do with the potential increase in the rights fees that will be involved,” Amobi says.
Analysts say WWE will likely have no problem finding a lucrative deal elsewhere. Twenty-First Century Fox ( FOXA) is reportedly extremely interested in WWE content.
In addition, Variety reports WWE could also see some interest from non-traditional bidders. Facebook ( FB), which has already partnered with WWE for weekly exclusive content, is reportedly interested in additional WWE content. Amazon.com ( AMZN) is also a leading contender for “WWE SmackDown.”
“I don’t see any way they will not be able to get a decent increase over the last contract, and decent may be an understatement because the way these TV rights have been going, it’s been with upside if anything,” Amobi says.
Wells Fargo analyst Eric Katz says it’s only a matter of time before ” WWE SmackDown” lands its own giant deal.
[Read: 5 of the Best Stocks to Buy for May.]
“We think ‘SmackDown’ is due for a big raise as well, and [is] likely still viewed as a bargain for several players reportedly interested,” Wells Fargo analyst Eric Katz says, according to Variety.
CFRA has a “hold” rating and $44 price target for WWE. Wells Fargo has a “buy” rating and $43 target for WWE stock.
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TV Deals May Drive World Wrestling Entertainment, Inc. (WWE) Stock Higher originally appeared on usnews.com
