Please ensure Javascript is enabled for purposes of website accessibility

Why World Wrestling Entertainment, Inc. Stock Popped Today

By Steve Symington – May 21, 2018 at 4:45PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

WWE has reportedly agreed to a lucrative new deal for SmackDown.

What happened

Shares of World Wrestling Entertainment Inc. (WWE 1.42%) jumped 12.5% as of 3:30 p.m. EDT Monday after reports that Fox has struck a deal to air one of its most popular shows.

According to The Hollywood Reporter this morning, WWE has "agreed in principle" to a five-year deal worth over $1 billion to move its SmackDown Live program to Fox starting in October 2019.

Stock market prices and charts in red and green on an LED display


So what

The news effectively confirms reports last week that WWE was shopping SmackDown -- which currently averages almost 2.6 million weekly viewers -- to various networks after Comcast's NBCUniversal declined to renew its deal. At least one Wall Street analyst predicted at the time that WWE would command a premium for its content given its high ratings and stable viewership.

Sure enough, the new deal is said to be worth $205 million annually, or roughly three times the amount NBCUniversal was paying WWE to air SmackDown on its USA network.

Now what

Meanwhile, USA Network is expected to continue airing WWE Raw, which averages roughly three million weekly viewers. Hollywood Reporter also notes that WWE received an even higher offer from another bidder, but was swayed by Fox's promise to heavily promote SmackDown across its programming with the NFL and Major League Baseball.

In the end, with WWE shares trading at all-time highs, investors certainly aren't complaining today.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

World Wrestling Entertainment, Inc. Stock Quote
World Wrestling Entertainment, Inc.
$70.17 (1.42%) $0.98
Comcast Corporation Stock Quote
Comcast Corporation
$29.33 (-3.62%) $-1.10

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.