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WHY NICK KHAN JUST MADE THE BEST POSSIBLE DEAL FOR WWE

By Mike Johnson on 2022-01-28 10:00:00

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I saw the article about WWE making a deal with Disney but for Indonesia?  Like, what's the point?  I don't understand why this was a big deal at all.  It's just the Peacock deal, on a smaller scale.

Actually, the deal that was announced yesterday that will see the WWE Network programming, including live PPVs, airing in Indonesia on Disney + Hotstar (which is the international version of Disney+, incorporating more adult content that in the States would be migrated over to Hulu) is important for a number of reasons well beyond Indonesia and could have some really interesting ripple effects as WWE gets closer and closer to negotiating new deals with FOX and NBC Universal.  I'll explain.

Number one, Disney, like all other companies, are seeking brand name, evergreen content for their streaming services (think Star Wars or Marvel, something that has a huge fan base and has an audience that will continue to come back and watch old as well as new programming - the stuff that people love because it hits that sweet spot) but with the WWE Indonesia deal, they are also starting to dip their toe in the water of streaming live content.  WWE can provide both and also potentially bring them new subscribers, the way that the company brought Peacock about 1 million new subscribers, according to Puck.com, after the WWE Network migrated there.  

So, with this deal, Disney is looking to see if WWE Network subscribers come to their streaming service, accentuating the sub numbers in that market, whether they come for the live programming and how evergreen WWE vintage content is worth to them, because this deal is potentially worth a lot more than just Indonesia.  

If Disney sees that this deal works, what's to stop them from grabbing the rights to the WWE Network in other international markets it either has or plans to roll out Disney + Hotstar in?  WWE is always open for business and they would obviously rather license the Network to others, so why not license it to the biggest media company there is in terms of family entertainment, the Disney Company?

Plus, if Disney is interested in adding WWE content in additional regions, it will likely make other streaming providers sit up and take notice and instead decide they want to bid on WWE's streaming rights.  So, even if, for example, Disney doesn't want it in Spain, perhaps someone else will.  Disney working with WWE only brings up the awareness and worth of the WWE brand, especially if/when the deal spreads beyond Indonesia.  Even the deal yesterday added to WWE's credibility in the entertainment world, because if you are in bed with Disney, there's an aura that comes with it that no other company can hope to have.  

Of course, all of this could be a "let's get in the water and see how this is" for all parties involved and for WWE, that's great, because their existing Hulu deal expires towards the end of 2022 and Disney is the owner and driving force in that streaming service.  What better way to show your worth and get a better rights deal from them than to show how strong the content is elsewhere?   Or, to show them that they should be investing in something greater than just TV rights for WWE series on Hulu?

Let's not forget that Nick Khan knows how to play the long game and knows how the media market will go in terms of rights fees and especially for interest in new, original sports programming.  WWE will be, in a few years, negotiating with FOX and NBCU for their future TV rights fees, so by placing them with Disney now, Nick Khan is effectively letting all parties know that, hey Disney could be interested!

Imagine a world where ESPN2 lands the rights for Raw or Smackdown?  It changes the cable balance, giving them an asset (and potentially taking it away from USA Network) in the ever-important battle for cable supremacy, which still goes on today despite dwindling subscriber numbers and the move to streaming.  Even if WWE doesn't end up there, having the potential of Disney, which controls so much of the TV landscape, as an interested party, will only help WWE when they come to the negotiating table.

This isn't just about a deal for Indonesia.  It's about planting the WWE flag in the Disney ecosystem to test out how it could do there as a business and promotional partner, initially for one smaller international marketplace and then, potentially elsewhere.  The deal could end up being just about Indonesia or it could be about how WWE and Disney together could take the WWE intellectual property and build a partnership into something grander than the initial deal.

WWE President Nick Khan doesn't just want a streaming deal.  He wants to build WWE into a much larger, more profitable business that becomes a brand that will have lasting pop culture legacy, like Marvel and Star Wars and Pixar.  Who better to try and get into bed with than the folks who own all of that and more?  Khan doesn't want a theme park ride, he wants there to be a theme park....and who better than Disney to be in bed with if you want THAT.

The Indonesia deal might be the day that is looked back as when WWE first broke ground for the next era.

It's, in my opinion, one of the best deals Nick Khan has made to date, because he didn't just make a deal. 

He planted seeds for the next potential WWE generation.

 

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