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The Gorilla Position: WWE's Peacock Deal and their Stocks

When WWE signed with Peacock for exclusive streaming rights to all WWE Network products in the US, did the stock price not see a nice increase. The answer doesn't make sense, just like Gamestop Stock being over $300 per share (full disclaimer, I worked at GameStop for about 15 years and was never given options, and where the company was when I left I couldn't justify buying in).

WWE Network, the WWE's streaming service that gave you every pay-per-view at $9.99/month, was launched long before Disney+, HBOmax, CBS All Access, and Peacock, it is set to be shut down in March (in the US) because of a five-year exclusive licensing agreement with Comcast, Universal, NBC's Peacock service (horrible name, in my humble opinion), that in essence is worth $1 Billion Dollars. So why didn't their stock go crazy?

The first part is easy, Wall Street still doesn't know what to make of Peacock, and whether it will be as big as the others, especially since its exclusive content didn't have the bite that CBS did with The Twilight Zone and all the Star Trek on All Access.

Second, Wall Street sees the WWE as an "ugly stepchild" of publicly traded companies, and keep them hidden in the back corner of the party, trying to limit their success. When heard that the WWE Network is shutting down, it is inherently assumed to be bad. The service currently yours 1.6M subscribers, though won't say how many are on the Paid tier, but we have to assume it's around 1M a month, at $9.99. So this is lost revenue, right? I'll get to this after the fourth point.

Peacock's not known for being the most stable of streaming networks, and it isn't known if all of the WWE content will be on Peacock. All pay-per-view programming, including Wrestlemania, will be accessible through Peacock. NXT, NXT UK, and old WCW and ECW will also be offered through the streaming service, and their documentaries like Undertaker: The Last Ride (2020) and a new show called WWE Icons (2021-) will be watchable through Peacock. The question still remains to be answered: will the WWE have its own wing on Peacock remains to be seen? There are hopes that they just incorporate the already existing infrastructure of the WWE Network onto it like a piggyback, so the viewers can just click the WWE button on there and get to the content they want to watch.

So, the lost revenue question from earlier. Sure, the WWE will lose the ad revenue they've been getting from the WWE Network, and they'll lose the 1M subs at $9.99/month, but the subside only equates to about $12M in revenue, and I can't see a world where they make $188M in ad revenue from the network per year. So the deal makes WWE more money, yet their stock didn't move. To me, this should have been a 10-20% increase on the market, yet, not even really a blip. Are there unanswered questions? Without a doubt. Here are a few:

As asked above, how easy will the content be to find? How much new content will we get from the WWE and Peacock, as they were spending resources before to make multiple original network programs per year, and now they've stated "at least one?" Will we finally see a wing of WWE Produced movies like The Marine (2006) or Fighting With My Family (2019) all in one place since that component always felt that was a miss on the WWE Network? But the biggest, is whether or not NXT will lose its Wednesday night partnership with NBC, which had a licensing agreement worth about $60M a year?

That last question is big because it bites into the $200M this deal is worth per year and could come to fruition with news that NBC Sports Network is likely to shutter, leaving NBC's NHL hockey needing a home on Wednesday nights, possibly meaning NXT needs to find a new night on USA, SYFY or another Comcast network, or just be pulled into the Peacock deal itself.

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