By Chuck Carroll

WWE is on the clock, and they know it. Time is ticking on their single largest source of revenue, and the future of Monday Night RAW and SmackDown Live! hangs in the balance.

On September 30, 2019, the pro wrestling goliath’s television distribution deal with NBC Universal expires. Despite strong ratings in the past, WWE has uprooted its flagship programming and moved to a new network. Even with stiff competition from the NFL and NBA, both RAW and SmackDown consistently rank among the five most-watched shows on cable on their respective nights, each bringing millions of viewers to USA Network.

Even in this cord-cutting era, those numbers are attractive to networks, although WWE says there is only “a fairly small cohort of potential buyers.” WWE commands a large network with a sizable clearance to accommodate their legion of loyal followers. Pulling up stakes and moving to a new television home isn’t unprecedented for WWE. SmackDown has been a cable nomad since premiering in 1999. The show has aired on five separate networks and averages a new home every three-and-a-half years. But last year’s transition to a live broadcast on Tuesday night has finally given it a time slot that seems permanent.

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The flagship show on Monday nights has also bounced around a bit. In 2000, WWE opted to leave USA Network and signed a five-year agreement with Spike TV to air RAW. At the time, Spike also aired competing Extreme Championship Wrestling, but the shows only co-existed on the network for a short time. Not long after, the original incarnation of ECW went out of business. Presently, departing one of the top networks on cable to move to a smaller outlet such as Pop TV, which is home to rival Impact Wrestling, isn’t an option. Not only is the network clearance smaller, they would be unable to match the TV rights fees offered by larger competitors.

“Yes, absolutely.”

That was the response from WWE Chief Strategy & Financial Officer, George Barrios, earlier this year when asked whether RAW and SmackDown could sever ties with traditional television and stream exclusively online. Some analysts were wondering whether the company would gamble and bring their programing in-house on the WWE Network.

With the number of paying WWE Network subscribers hovering just over 1.5 million, the time table for such a move is extremely aggressive. Through the first three quarters of the year, television revenue has nearly eclipsed $200 million. Meanwhile, network subscriptions experienced a 4% year-over-year increase and accounted for $158 million in revenue. Despite a downward ratings trend, the total number of global network subscribers is only about half of the average audience size for RAW in the U.S. Additionally, television revenue increased 15% over the last 12 months to easily outpace Network growth.

The move off traditional broadcast is an eventuality, but one that is unlikely to occur until the expiration of the next distribution deal at the earliest.

Whatever the fate of RAW and SmackDown, we won’t have to wait until the current deal expires in two years to find out. WWE expects to announce future plans for the programs as soon as May, when there would still be 17 months left on the current agreement. If not in the spring, Barrios told investors this week that he believes the deal to be finalized by next September, with one year remaining on the contract.

With such a lengthy period remaining on the existing agreement, it is hard to fathom a new home for WWE’s premiere content. Announcing a switch that soon would make the shows lame ducks for a year or longer. It’s also unclear whether the current agreement includes an exclusive negotiating window that would bar WWE from exploring outside opportunities. WWE declined to comment on the “mechanics” of the deal presently in place.

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Also boding well for a renewal is the successes of Total Divas and Total Bellas on the E! Network. According to PW Insider’s Mike Johnson, WWE is reportedly ready to strengthen its relationship with E!, bringing a third show to the network. The program would center around reality TV veteran, The Miz, as well as his wife Maryse, who is pregnant with the couple’s first child. Fellow WWE Superstar Dolph Ziggler would also be part of the show, the report stated.

Perhaps most importantly, WWE continues to grow advertisers with the current deal and now has upwards of 200 companies buying air time to showcase their products. That number would shrink with a television network change and exponentially more so if streamed exclusively online. The one caveat to the latter would be that WWE would keep 100% of advertising sold on its own network.

So what does the future hold? This is purely speculation, but given the expected timing of the announcement and the economics involved, it would be a surprise if WWE and NBC Universal didn’t come to terms on a contract renewal. Then again, this is pro wrestling, and anything can happen.

Of Note

WWE’s overall revenue surged 14% in the third quarter to $186.4 million, and the company expects it will beat its own revenue estimates for the year. The bulk of the increase stems from global television rights fees and network segments.

WWE is having difficulty filling arenas. Ticket sales in North America fell 8% in the past year with the average event, including televised shows, now drawing just 4,900 fans. Internationally, the attendance woes were even greater with a reported 17% decline in ticket sales.

Despite slumping attendance, revenue from live events is way up. In North America, it jumped by 22% to $26.4 million. Financial growth was even stronger outside the U.S. where international events saw a 34% revenue boost.

If fewer fans are attending, then how could live-event revenue be up? WWE raised the price of tickets. The average ticket in the U.S. now costs $53.11 and an astounding $107 outside of North America. Maybe that also helps explain the empty seats.

WWE performers are more diverse than ever. According to the company, international talent now accounts for 40% of the roster.

Chuck Carroll is former pro wrestling announcer and referee turned sports media personality. He once appeared on Monday Night RAW when he presented Robert Griffin III with a WWE title belt in the Redskins locker room.

Follow him on Twitter @ChuckCarrollWLC.