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SPLITTING THE ATOM: LOOKING AT SMACKDOWN POTENTIALLY LEAVING THE NBCU UMBRELLA, WHAT IT COULD MEAN FOR RAW, NXT AND WWE AS A WHOLE & MORE

By Mike Johnson on 2018-05-16 23:59:00

Today’s report by The Hollywood Reporter that NBC is only seeking to maintain Monday Night Raw’s TV rights and is waiving the right to maintain Smackdown, if correct, opens a whole new world for World Wrestling Entertainment, one where for the first time since 2010, WWE’s top franchises could very well end up with different broadcasters.                         

Before we go any further, it should be noted that the report, which originated from The Hollywood Reporter’s Lesley Goldberg and Matthew Belloni, has not been shot down by either NBC or WWE.  It should also be noted that when contacted by PWInsider.com this evening, WWE responded with a curt “no comment”, which pretty much means that there’s at least something to this.  Whether that something means Smackdown's time on the USA Network is coming to a close remains to be confirmed, but even as we wait for confirmation, there’s lots of questions to ponder, especially if this indeed happens, so let’s pontificate a bit....

WHY WOULDN’T NBC UNIVERSAL WANT SMACKDOWN?

When WWE reinstituted the brand split in the summer of 2016, moving Smackdown to a live weekly format for the first time since its inception in 1999, it was done in part to freshen Smackdown the series up and make it more viable as a ratings draw for the USA Network, which imported the series over from Syfy.  Before, Smackdown had sort of a "lame duck" feel to it, as even the best episodes were blemished by the fact that it was taped days before it was broadcast, allowing for spoilers to leak, dulling even the best in-ring work or best storyline twists.

Since July 2016, Smackdown has brought the USA Network between 2 and 3 million viewers a week, so why would NBCU now pass on retaining the rights? It may be that with WWE seeking far more money (some sources have implied the company is hoping for up to three times their current rights fees), Smackdown may have been done in by the very nature of the beast – that Raw was the more viable franchise for the USA Network and that NBCU felt their best long-term investment was in retaining Raw on Mondays.

Besides, Smackdown had already been moved from Syfy, which had greatly rebranded itself in recent years, so it wasn’t a perfect fit to shift it back there.  Bravo is branded as a women's network, not exactly a fit for pro wrestling.  E! wasn’t going to be the right fit either.  So, if NBC wasn’t going to keep it on the USA Network, where else in its portfolio did it really fit?  Why pay a top premium price for a second version of something they already had?  Raw, especially with three hours, always outshined Smackdown, even when Smackdown had the better product.  It appears that with that in mind, NBC was ready to move forward without WWE's blue team.

NBC is obviously still all in with their WWE relationship.  WWE had a bigger presence at the NBC Upfront presentation this week in NYC than they have ever had before, even running an angle for the Money in the Bank PPV.  NBC isn’t going to give them that platform in front of their advertising partners unless the WWE relationship is still considered viable, just as NBC isn’t going to want to give up all those blue-chip advertisers they have helped bring to WWE programming in recent years that WWE loves to tout during their quarterly earnings conference calls.

In splitting the hair, maintaining Raw and letting Smackdown go, NBC also gets to hedge their bets.  They will certainly pay more for Raw  (three times the current price, according to THR) and keep that powerhouse where it was and allow it to help anchor and protect the USA Network, but also allow themselves off the hook of spending even more money for what, despite the best efforts of many of the talents involved, is still seen as the number two WWE brand.  Raw is the juggernaut and always will be, so it appears NBC has decided that, at the price WWE would have commanded, Smackdown was expendable.

SO, WHERE DOES SMACKDOWN GO?

So, if Smackdown leaves NBCU, where does it land?

The Hollywood Reporter places FOX in the leading position and that makes the most sense.  When FOX sells most of their assets over to Disney, “New FOX” as it has been termed, is seeking to build most of their content around live sports programming.  Certainly, Smackdown would fall into that category, especially if the series is retained as a live, weekly series. 

FOX has utilized UFC programming as one of their anchors.  If they retain UFC and nab Smackdown, that’s two entities with a built-in audience for FX, FXX, FOX Sports 1 or anywhere else they want to program it.  While some have discussed the idea of WWE programming live on the FOX Network, while it can’t be completely dismissed, one would think that with FOX already giving away a lot of its real estate to the NFL, that putting a two-hour pro wrestling series on wouldn’t be the direction they are going in – but in the fractured world of television programming that is 2018, getting live overnight ratings is becoming harder and harder, so anything can happen.

One also shouldn’t discount ESPN.  ESPN has been bleeding money and ratings in recent years (hence the bloodbath that led Jonathan Coachman back to WWE), so what better way to try and shore things up by placing two hours of Smackdown, certainly a viable franchise, on their cable network?   It sounds completely odd to think it’s a possibility, but older fans will remember the days of the AWA or Global being on the station and it’s not like the Disney-owned channel isn’t looking to spend money to make the right deal. 

Consider that they just made a reported $150 million deal for a small number of UFC Fight Night events for their ESPN+ streaming service that also allows their subscribers to add the UFC Fight Pass streaming service to their own ESPN+ sub.   The Hollywood Reporter today pegged NBC as having paid $30 million for the rights to Smackdown in the last WWE-NBCU pact.  If 15 UFC events are worth $150 million to ESPN on a streaming platform, what is a weekly WWE broadcast with a built-in audience that has followed it over the years from broadcaster to broadcaster worth to the ESPN on cable?

I’ve had a few readers write excited about the notion of TBS or TNT picking up Smackdown, but my gut is that while Time-Warner and AT&T are in the middle of fighting the United States government to approve their merger, they likely aren’t going to join in a bidding war to acquire a WWE series.   They have much bigger fish to fry, as a company, currently.  Again, 2018 is a strange time for professional wrestling and the television industry but I think the notion of WWE ending up there…not likely.

Perhaps the wackiest and outside the box suggestion I could make is that AMC investigate acquiring Smackdown.  The cable network has the number one franchise on cable, The Walking Dead, but adding two hours of WWE on a week night, coupled with the might of the ever-expanding Dead franchise, could be just what AMC needed to raise their overall ratings even more – and the connection would be a nice prestige builder for WWE.

WHERE DO THE STREAMING RIGHTS LAND?

In recent months, we have seen the NFL and UFC, among others make deals for the streaming rights to their content.  In the case of the NFL, there are games that are streamed that get completely different rights fees and advertising dollars separate from their broadcast rights.  In this regard, WWE, which has been at the cusp of the streaming subscription revolution, has been losing out.

Under their current deal, they get their content on Hulu Plus a day after it airs and then get to add episodes of Raw and Smackdown to their own WWE Network after a window of a month or so.

As WWE moves into a new pact with NBCU, where do the streaming rights land?  If they are willing to let Smackdown go, what are their intentions for Raw’s streaming rights?  Do they end up exclusively on the USA App?  Can WWE try and sell those off to say, Amazon Prime live? 

Where do the streaming rights for Smackdown go?  To the series’ new home?  Someone different?

Plus, how does the new deal change the window for WWE’s content to land on the WWE Network?  Certainly, if they had the rights to add Raw and Smackdown to the Network at a quicker pace, that would be a nice selling point to potential subscribers.  Pro wrestling is meant to be watched in the moment – while it’s nice to have the entire library there to watch, the immediacy of needing to watch the current storylines dissipates a month after they took place. 

DOES THIS EXPLAIN WHY PPVS ARE NOW CO-BRANDED?

Several months ago, seemingly out of nowhere, WWE made the announcement that starting with Backlash, their Pay-Per-View events would now be co-branded Raw and Smackdown events.  Some theorized it was a sign that the company’s brand-split was failing, the first sign of all the walls tumbling down.  However, let’s flip the coin: could WWE have been informed by NBC that this was coming and if so, made the decision as a precautionary move?

After all, if the company ends up working with two differing, competing broadcasters, one would think that Raw on the USA Network wouldn’t be encouraged to plug the storylines or shows that are associated with Smackdown, which would be broadcast on another corporate home.

By having each show building to the same event monthly, WWE is saving themselves the headache of Raw not being able to cross-promote a Smackdown event or vice versa thanks to corporate red tape…and now each series would be building to the same climactic event every month vs. two different brands on two different broadcasters having to promote two different events.

It may very well be that WWE was seeking to simplify what was going to be on their plate going forward.

WHAT DOES THIS MEAN FOR WWE NXT?

This past December, WWE aired an episode of WWE NXT on the USA Network for the first time as part of the cable network’s annual “WWE Week.”  Could that episode, which garnered 841,000 viewers with relatively little promotion, have been a test run to bring NXT to the USA Network as a replacement for Smackdown?

It sounds like a long shot, but consider this:  What if NBC Universal, if The Hollywood Reporter is correct, is only looking to get out of the Smackdown business, not the WWE business.  Now, what if they passed on Smackdown and instead sought the rights to NXT.  For all the talk of the WWE television deals, no one has really brought up the possibility of WWE “graduating” the NXT weekly series from the WWE Network to cable television.

Consider the positives to such a deal.  Smackdown goes elsewhere and there is a rights bidding fee for that series.  USA Network pays a cheaper price for the NXT rights, getting a hipper hour of WWE programming that appeals more to that 18-34-year-old demographic that advertisers love.  WWE gets to continue to grow NXT as a brand outside the bubble of their streaming service and Triple H moves one step forward with his brand to becoming closer to what WCW used to be for the WWF during the Monday Night Wars.  Triple H has stated he wants NXT to get to the point where talents are jumping across all three brands with NXT not being seen as a demotion.  Getting NXT onto a cable broadcaster is a big move in that direction, if it happens.

If it did, WWE could shift 205 Live into the position that NXT formerly had on the WWE Network, while plans for international WWE brands, as they solidify, can help shoulder the weight of the in-ring programming for the Network.  Even if WWE gets local deals for WWE UK and the planned WWE Latin American brand, they can still bring those to the WWE Network especially if they geo-block the content from where it airs locally.

It’s all conjecture, but certainly not out of the realm of possibility.   

Neither is the idea that if NBC is really giving up their exclusivity to WWE beyond Raw....could NXT eventually end up on yet another broadcaster?

WHAT DOES THIS MEAN FOR WWE AS A WHOLE?

While the WWE stock has doubled in the last year, WWE has also tightened their budget.  Pyro has been missing from their broadcasts, except for Wrestlemania and the Greatest Royal Rumble.  Some talents have passed on that while they were formerly flown first-class regularly, there have been more and more instances of being booked in Coach instead.  The company has done a lot to trim the fat and make themselves more desirable as an investment for stockholders while also revving themselves up for a big TV rights fee increase.

So, what happens when they get it and Smackdown moves elsewhere? 

Will we be looking at WWE loosening the financial belt a little to bring some more pizzazz to the weekly broadcast? 

Once they lock in their deals, could we be looking at a talent bludgeoning to get rid of the more established names who could be replaced by newer, flashier talents to make a bigger splash as part of a new TV home?

Will we be looking at WWE perhaps sending the likes of Roman Reigns or John Cena to Smackdown to make sure more eyeballs are on the series in its new home?  

Or, will the idea of talents crossing over from one side to the other be more of an issue because Raw are NBC talents while Smackdown are Broadcaster XYZ talents?  Imagine a Superstar Shakeup across two different channels owned by different broadcast partners and trying to balance things out to make everyone happy while also putting together a show you hope will excite your audiences?

Could it be that even more than ever before, the brand split will solidify, and WWE is marching towards having two competing brands battling each other to make their respective corporate partners happy?

Will we be looking at the company changing the presentation and look of Smackdown even more to differentiate it from Raw?  How does that change co-branded PPVs?

What sort of restrictions will be placed on the shows when it comes to showcasing footage from one brand on the other’s TV show?  Could we be looking at a situation similar to Marvel's film rights, where The Fantastic Four and X-Men are over there, Spider-Man is over there and The Avengers are over here and unless deals are agreed upon by different corporations, none of their paths will cross?

Will advertisers be able to bundle their sponsorships with WWE across the board still?  That was a big selling point WWE Co-President Michelle Wilson discussed during the last earnings call, the company’s ability to promote their advertisers across many platforms – what does it mean if Coca-Cola wants to advertise, but they came via the NBC relationship?  Are they out of bounds when it comes to also promoting on Smackdown’s new home?  This seems like splitting the atom, but these are the type of things that end up being major wars in corporate boardrooms and now we are talking about WWE the corporation having to keep not just one corporate partner happy, but several.

How does any of this change WWE’s licensing?  Could WWE run action figure commercials featuring Smackdown talents on Raw without running afoul of a broadcast partner?

None of these scenarios or questions will be answered tomorrow, but they are interesting ones to dissect and wonder about as the landscape of WWE as a content producer, again shifts before our very eyes.

Mike Johnson can be reached at MikeJohnsonPWInsider@gmail.com.


 

 

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