Kizzo 0 Report post Posted April 5, 2005 Associated Press WWE signs with NBC Universal STAMFORD, Conn. - World Wrestling Entertainment Inc. has reached a three-year agreement with NBC Universal Inc. that will return its "WWE Raw" cable program to USA Network in October, company officials said Monday. The deal resolves a major issue for the Stamford-based producer of televised wrestling matches. "Raw," which is regularly among the most popular cable programs, needed to find a new home after Spike TV decided not to extend its contract with WWE that ends in September. But WWE will lose about $13 million in net income, or $37 million in revenue, as a result of lost advertising under the new deal, the company said in a filing with the Securities and Exchange Commission. That works out to about 18 to 20 cents per share in lost profits, according to Dennis McAlpine, managing director of McAlpine Associates in Scarsdale, N.Y. and a WWE analyst. "That's a lot of money to make up," McAlpine said. "It's not as good a deal as it first looked." The company did not offer a forecast for how the deal will affect earnings. WWE chief executive Linda McMahon said the deal will allow the company to broaden its audience. "We're very happy to be returning to USA Network, where we experienced some of our greatest successes, and to NBC, where we had tremendous success with our series of late-night specials, "Saturday Night Main Event," in the 1980s," she said. WWE said USA will sell and retain all advertising in the programming. Under the existing agreement with Spike TV, WWE sells the majority of the advertising in its cable programs. But WWE said the new deal offers benefits by being on a larger more established network, an arrangement that has proven successful in the past. The deal also will provide more exposure to a Spanish-speaking audience, said Gary Davis, a WWE spokesman. Monday Night RAW aired on USA from 1993 until 2000, when it moved to Spike TV, a unit of Viacom Inc. NBC Universal is a unit of General Electric Co. In addition to "Raw," USA will air a one-hour weekend "Raw"-branded program, and NBCU's Telemundo will air Spanish-language versions of "Raw." NBC will also air at least two yearly, 90-minute Saturday late night "Raw" specials. "I'm thrilled to be back in business again with Vince and Linda McMahon," said Bonnie Hammer, president of USA Network. "I led the USA team that helped grow "Raw" into a true pop phenomenon, and it's great to welcome it home." Spike officials have said its decision not to renew the contract came after several months of negotiations that failed to reach an agreement on the value of the programs. Under the new agreement, NBC Universal has committed at least $8 million to promote on several platforms the launch of the programs on USA. McAlpine agreed that returning to USA Network could help WWE in the long term, but said the company still needs to replace wrestling stars it has lost in recent years to boost ratings that have been flat. "Somehow it never worked on Spike. It didn't have the pizazz it had on USA Network. Maybe going home will give RAW and WWE more of that pizazz." Shares of WWE rose 32 cents, or 2.7 percent, to close at $12.13 in Monday trading on the New York Stock Exchange, near the lower end of their 52-week range of $11.15 to $15.44. Overall its not better than the deal WWE signed with Viacom in 2000....but this deal did have some extra stuff... Share this post Link to post Share on other sites
