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Major League Soccer TV rights deal - good or bad news for WWE?

The trend of massive increases in television rights fees for live sports programming continued with Major League Soccer quadrupling their current TV revenue in new deals with ESPN, Fox Sports and Univision. So does this bode well for WWE as they seek to do the same?

David Beckham - no match for John Cena as a rating draw!
David Beckham - no match for John Cena as a rating draw!
Aaron Davidson

The trend of massive increases in TV rights fees for live sports programming continued this Monday, as Major League Soccer announced new eight-year deals with ESPN, Fox Sports and Univision, starting in 2015, worth a combined $90 million a year, which almost quadruples the $23 million they will be paid for content this year.

In their recent television negotiations, WWE has attempted to capitalise on this trend by emphasising the athletic and live nature of their programming, together with their loyal audience of over four million viewers a week for Monday Night Raw and 2.75 million for Smackdown, to attempt to procure a similar hike in their own rights fees.

The rumored announcement that WWE has decided to re-sign with NBCUniversal is expected on Thursday, but no news on the terms of the agreement is known at this point, so is the confirmed MLS rights hike a good sign or not?

It certainly proves that WWE's goal to double or treble their future rights fees was a realistic and obtainable one to set themselves. The cash set to be given to MLS is notable, as it's in the same ballpark as what WWE was making from its old NBCU deal, despite having an audience twenty times smaller than WWE's huge fanbase. It makes WWE programming seem tremendously undervalued on the surface.

However, it should be noted that the ad rates for commercials during pro wrestling shows is pitiful compared to other sports that draw similar ratings, due to it being well known that the WWE audience skews much more heavily to poorly educated, low income males. The main benefit of airing WWE to NBCU is that their well above average ratings helps the USA Network stay the United States's number one cable station and keeps SyFy comfortably in the top twenty-five. But the financial value of those bragging rights may not be as high as they would intuitively seem.

This may be why there's some gossip going around that WWE were ultimately disappointed at the lack of many serious suitors for their programming, leading to a disappointing offer from NBCU, and that is why they've been reticent so far to make any public statements about the new deal.

At this stage I'd take that with a pinch of salt, but if it does indeed turn out to be the case, then the startling Major League Soccer contract would be very bad news for WWE, as stockholders will ask questions as to how and why such a minor league player could outperform them in the TV rights fee game, and executive heads could roll as a consequence.

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