Sports entertainment and media company World Wrestling Entertainment (WWE) (WWE) has had an exclusive streaming relationship with Peacock -- part of Comcast's (CMCSA -0.35%) NBCUniversal segment-- since the spring of 2020. This deal has given Peacock's premium subscribers access to WWE's extensive back catalog of classic wrestling matches and the ability to view live events such as Royal Rumble, WrestleMania, and SummerSlam. However, the WWE's weekly live programs, Raw and SmackDown, still debut on linear TV, and only arrive on Peacock a day later.

During WWE's second-quarter investor call, co-CEO Nick Khan suggested the company is open to the idea of transferring the live broadcast rights for Raw and SmackDown to streaming. Here's why forging an even closer relationship could be a smart move for both WWE and Peacock.

The linear TV landscape is changing

WWE last negotiated its Raw and SmackDown deals in 2018. Raw airs on USA Network -- also owned by NBCUniversal -- in a deal reportedly worth $1.3 billion over five years. Fox Corporation's FOX network broadcasts SmackDown in an arrangement worth about $1 billion, also over five years.

Raw draws approximately 2 million live viewers per week over its three-hour runtime, while SmackDown attracts around 2 million during its two-hour weekly broadcasts. For comparison, these figures are in the range of the average viewership for a National Basketball Association game. However, with cord-cutting on the rise and some experts anticipating a drop in live TV ad spending over the coming years, this could be an opportune time for WWE to move its flagship weekly shows to Peacock.

WWE is not new to the streaming space

WWE first entered the US streaming market with WWE Network, which it launched in February 2014. Within a year, WWE Network had over 1 million subscribers. But, despite that promising start, it struggled to grow. Its US subscriber base peaked at around 1.9 million in 2017.

By the time WWE signed its deal with Peacock in early 2020, the WWE Network had just 1.1 million subscribers. It's estimated that 1 million of them subsequently moved over to Peacock. However, a year after the deal went into effect, Khan revealed that more than a third of Peacock's premium subscribers had watched WWE content.

Streaming services are embracing live content

As Khan noted on WWE's investor call, streaming companies are "hungry" for premium live content. The executive cited Apple's $2.5 billion contract with Major League Soccer and Amazon's $11 billion deal with the National Football League. As a provider of live programming, Khan went on to suggest the WWE is in a unique position because it attracts mass audiences and operates year-round.

For NBCUniversal, its standing relationship as both a partner for WWE Networks and Raw surely puts it in a strong position should WWE decide the time is right to fully jump to streaming. As Khan stated on the earnings call, "We always talk to [NBCUniversal] first about anything going on."

Peacock is operating on a relatively slim budget

Comcast reported Peacock had 13 million premium customers as of the end of 2022's second quarter -- the same figure it had three months prior. The potential to attract millions of additional viewers with live WWE weekly programming is surely an appealing prospect for Comcast -- depending on how much such a deal would cost.

NBCUniversal reportedly spent more than $1 billion to secure the WWE Network rights for Peacock through 2025. Considering WWE earned more than $2.3 billion the last time it sold the TV broadcast rights for Raw and SmackDown, it's reasonable to wonder whether NBCUniversal has the appetite to spend heavily to make both shows exclusive to Peacock. But as Khan has noted, Peacock's major streaming competitors are already shelling out billions of dollars a year for premium live content.

Should WWE decide to shift Raw and SmackDown solely to streaming, Peacock would do well to secure the rights. By its nature, pro wrestling is scripted, meaning that viewers are presented with feuds and storylines that often continue for months, if not years. In a world where subscribers can and do cancel and add streaming services on a month-to-month basis, live WWE content could bolster Peacock's stickiness -- and its growth.