Connect with us

Breaking News

WWE Shares Are Surging – Here’s Why

WWE Shares Are Surging – Here’s Why

Investors are happier than the Macho Man with a Slim Jim with this week’s WWE news.

World Wrestling Entertainment’s (NYSE: WWE) shares had already been on a tear this year when a $1 billion deal for its SmackDown program was reported this week.

On Monday, shares climbed more than 12% following a report that the entertainment giant had scored a five-year television deal with Fox worth over $1 billion. And since then, the stock has continued to climb with a gain of nearly 17% for the week as of Thursday.

Source: TradersPro.



The Hollywood Reporter said that the deal is nearing completion and is expected to begin in October 2019, for around $205 million a year. The deal marks a three-fold increase over what Comcast’s (NASDAQ: CMCSA) NBCUniversal currently pays for the SmackDown Live program, which currently airs on the USA network.

NBC’s USA is expected to continue to air WWE’s other show, Raw, according to the report. Both SmackDown and Raw are consistently the most watched shows on cable TV with SmackDown pulling in an average of 2.59 million viewers per week this year, and Raw averaging about 3 million.

The Hollywood Reporter said that a bid from a third party was higher than Fox’s, but WWE chose Fox because of its ability to cross-promote its content on the MLB and NFL games aired on the network. Variety had reported recently that both Amazon (NASDAQ: AMZN) and Facebook (NASDAQ: FB) had interest in bidding on SmackDown.

The Fox deal comes at a time when its parent, 21st Century Fox (NASDAQ: FOX), is planning to sell its entertainment properties to Disney (NYSE: DIS). After that deal, if it isn’t interrupted by the new bid from Comcast, the “New Fox” will include the Fox broadcast network and owned stations, Fox News, and Fox Sports, which includes cable channels FS1 and FS2 as well as the Big Ten Network.



While the Fox network isn’t part of the Disney deal, it does include Fox Studios, which has many speculating that the network will pivot away from traditional programming like sitcoms and dramas, in favor of more live sports and reality shows.

In addition to the deal with Fox, WWE has some other important overseas deals and digital contracts, which should encourage investors. WWE shares have skyrocketed nearly 198% in the last 12 months, and 92% year-to-date, but the stock isn’t likely to stop there.

On Tuesday, MKM Partners raised its price target on WWE to $68, 17% higher than today’s prices.

“The additional upside potential in the shares remains considerable,” wrote MKM analyst Eric Handler. Guggenheim Partners also raised their target to that level noting that WWE’s content is still cheap compared to other sports.



More in Breaking News

Read This Next

To Top