What happened

Shares of World Wrestling Entertainment (NYSE:WWE) gained a whopping 138.1% through the first six months of the year, according to data from S&P Global Market Intelligence.

WWE Chart

WWE data by YCharts

The sports-entertainment company's share price climbed early in the year in anticipation that it would sign a new broadcast deal with a major network. The stock then saw explosive growth beginning in May, following indications that it would ink favorable new deals with Comcast (NASDAQ:CMCS.A) and Twenty-First Century Fox (NASDAQ:FOX)(NASDAQ:FOXA).

WWE wrestler Shinsuke Nakamura striking a celebratory pose at Royal Rumble 2018.

Image source: World Wrestling Entertainment. 

So what

News from The Hollywood Reporter arrived in the middle of May suggesting that the WWE was in discussion with major networks for broadcast deals. The report indicated that Comcast's NBCUniversal division was in talks to review its broadcast rights for Monday Night Raw in a deal would be worth roughly three times the previous contract,

The Hollywood Reporter piece also indicated that Comcast was not seeking to review its broadcast rights for SmackDown Live on its USA Network, opening up the program for bidding from other networks and with Fox emerging as an early favorite. The news quickly prompted the wrestling company's share price to explode, with the stock climbing more than 30% in the week following the publication of the report on May 16. 

Subsequent reports valued the five-year rights deal between WWE and Fox at roughly $1 billion. On June 26, the companies announced that they had signed a five-year deal to broadcast SmackDown Live on the Fox network on Friday nights weekly. The deal should give the WWE its largest major broadcast exposure ever and could create a catalyst for a substantial increase in the popularity of professional wrestling. 

Now what

WWE stock has continued to climb in July, with pricing increases stemming from last month's momentum and favorable ratings coverage and a price-target increase from a major firm. 

WWE Chart

WWE data by YCharts

Morgan Stanley released a note on July 13, giving the WWE an "overweight" rating and raising its target on the stock from $58 to $100 -- representing roughly 30% upside from the wrestling company's valuation at the time of publication.

Cord-cutting trends and the rise of streaming media platforms such as Netflix, Amazon.com's Prime, and Hulu have put a premium on already valuable live-sports broadcasts. The exact details of the deal with Fox have yet to be announced, but the Fox channel has a much wider reach than Comcast's USA Network and, in theory, looks to be a much better venue for the program.

WWE expects that its core content revenue will have grown from roughly $235 million in 2018 to $462 million in 2021, and increased popularity for its broadcasts could also lead to a big increase in merchandise sales.