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WWE Stock Price Down Over 45% Following Announcement Of New Domestic TV Deal

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WWE's stock price is in heavy decline following the announcement of their new domestic TV licensing deal with NBCUniversal on Thursday. As I type this, the stock is currently down 45.56%, trading at $10.85 per share. The reason is because WWE's new domestic TV deal is well below expectations.

Vince McMahon was confident WWE would at least double its TV licensing revenue with the new deal but details released on Thursday showed that not to be the case.

Below is an excerpt from a formal press release sent out on Thursday:

Renewal of Key Television Agreements

Over the past six months, the Company has negotiated television distribution agreements in the U.S., U.K. and Thailand, and is in the midst of discussions regarding the distribution of WWE content in India.3 The Company estimates that it will increase the average annual value of these key television agreements to approximately $200 million, representing an increase of more than $90 million, that is nearly three times (3x) the increase achieved in the previous round of negotiations.

Management believes that the new agreements more fully reflect the value of WWE content, including significant first-run hours, a passionate and loyal fan base, and 90% “live plus same day” viewership, in the U.S., which makes WWE content, like sports, “DVR-proof.” The Company plans to capitalize on the value of WWE content to drive further increases in value in other international markets.

While raising the annual value of these key television agreements to approximately $200 million will be up from previous agreements, it won't be double. The company earned $139.5 million in TV licensing fees around the world in 2012 and $160.9 million in 2013.

As I noted here on, WWE expected to have suitors lined up and would "reward the highest bidder." This isn't how negotiations went.

We're told FOX and Turner pulled out early on and it was between Viacom and NBCUniversal. Viacom dropped out when they learned what WWE wanted from NBCU. According to a source, Viacom felt WWE was “toying with them” to put pressure on NBCU.

It was learned in February that WWE and NBCU were still "far apart on price" when WWE retained Chris Bevilacqua, head of media advisory firm Bevilacqua Helfant Ventures, to negotiate the deal.

WWE's stock price closed strong on Wednesday, with investors hoping for a new domestic TV agreement that would boost the company's TV licensing fees around the world in excess of $300 million per year.

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