Categories: General Market Commentary- DPC
Topics: General Market Commentary- DPC

WWE & The Rock Team Up for Stock TKO

I grew up with wrestling.

I remember watching WWF Superstars and Saturday Night’s Main Event. I could occasionally goad my older brother into dragging me along with him to the Capital Centre in Landover, Maryland to see the likes of Hulk Hogan, The Ultimate Warrior, and Legion of Doom in person.

I experienced the Attitude Era where all the previous rules of the business were summarily broken by Vince McMahon as kayfabe (keeping the illusion of wrestling being real) along with any semblance of moral decency were tossed to the curb.

I’ll never forget Hulk Hogan turning heel (wrestling lingo for bad guy) and forming the New World Order after jumping ship to Ted Turner’s rival wrasslin’ promotion WCW. I felt a spiritual kinship with those brave enough to stand up against Hollywood Hogan and his thugs.

I even built a wrestling ring in an unfinished chalet in my parents’ backyard where I would host monthly “events.” (How else does one survive high school?)

I lost track of wrestling in my adult years but have attended a couple of local WWE house shows since living in Spokane. And my nephew recently dragged my older sister out to the 37th Royal Rumble in St. Petersburg, Florida.

It seems that WWE’s popularity continues to grow even with the ouster of Vince McMahon from the company.

On December 26th, 2023, WWE's Madison Square Garden (NYSE: MSGS) event made history by breaking a significant financial record. This was certainly not the first time that WWE has made history at this famous venue, but this particular event was memorable for several reasons.

One of the highlights of the event was CM Punk's in-ring return against Dominik Mysterio, marking his first match since 2014. Sami Zayn also returned to the ring after a hiatus. Fans in NYC were treated to a spectacular live event that was completely sold out. WWE's live event in Madison Square Garden set a tremendous record for being the highest-grossing non-televised domestic WWE event ever.
The event featured four championship matches, concluding with the main event between Drew McIntyre and WWE World Heavyweight Champion Seth Rollins.

WWE is hotter than ever, and there are two companies that are poised to profit massively.

Netflix's $5 Billion Deal for WWE Raw Rights

In a landmark agreement, Netflix (NASDAQ: NFLX)  has struck a 10-year deal valued at over $5 billion to become the new home of hit wrestling show "WWE Raw," marking its most ambitious push yet into live streaming. This move is a clear indication of Netflix's ambition to become an essential home-entertainment subscription service with a vast library of TV shows, films, and live content.

The multiyear deal, effective in January 2025, grants Netflix exclusive rights to the show in the U.S., along with international distribution rights in several countries, including Canada, Latin America, and the UK. Additionally, Netflix will gain international rights to other WWE shows like "Smackdown" and "NXT," as well as large events like "WrestleMania."

This agreement underscores the ongoing migration of athletic events from cable and broadcast television to streaming platforms. The deal with Netflix also fundamentally changes the media landscape, significantly expanding WWE's reach.

On top of that, TKO Group Holdings, Inc. (NYSE: TKO), a leading sports and entertainment company, has appointed renowned WWE Superstar Dwayne Johnson to its Board of Directors. 

Johnson, globally recognized for his extensive business portfolio including Seven Bucks Productions, Teremana Tequila, ZOA Energy, and the United Football League (UFL), brings decades of experience in live entertainment and sports to the board. The appointment is part of TKO’s long-term strategy to enhance value and performance for shareholders through growth initiatives across both UFC and WWE.

Johnson, who has now gained full ownership of his trademarked name, "The Rock," will play a crucial role in expanding TKO's global presence in the sports and entertainment industry. Furthermore, WWE has entered into a services and merchandising agreement with Johnson that includes promotional, licensing, and other services, and an intellectual property assignment agreement that secures Johnson's ownership of "The Rock" trademark.

TKO Group Holdings, Inc. looks unstoppable for several compelling reasons.

Firstly, the company's strategic partnership with Netflix and WWE expands its reach globally, tapping into a broad and diverse customer base.

Secondly, the appointment of Dwayne Johnson, a globally recognized WWE Superstar and movie star with a substantial business portfolio, to the board will likely boost the company's visibility and credibility in the sports and entertainment industry. His involvement and the secured ownership of his trademarked name, "The Rock", add a unique value proposition.

Additionally, the company's long-term strategy indicates a commitment to enhancing shareholder value through growth initiatives across UFC and WWE.

Finally, the shift of athletic events to streaming platforms is a trend that TKO is well-positioned to leverage, potentially leading to significant revenue growth.

TKO Group Holdings, Inc. and Netflix are dynamic and forward-looking companies that are well positioned to profit from the growing sports entertainment industry.

Keep coming back,

Chris Curl
Editor, Daily Profit Cycle