“SmackDown” has been a dominant force in TV ratings, regularly surpassing two million viewers and often outpacing both “WWE Raw” and “WWE NXT” combined. Despite its strong performance, the show’s run on network television has come to an end. According to Dave Meltzer in the Wrestling Observer Newsletter, there are four primary reasons why “SmackDown” is moving away from FOX.
At the heart of the decision is the financial loss. Meltzer explained that FOX was losing more than $200 million per year on the deal, and when WWE requested a 50% increase in their next contract, FOX could no longer justify the cost.
This quickly brought the negotiations to a halt. However, USA Network offered WWE a 40% increase, despite passing on the higher price tag for “Raw,” which was nearly $400 million. Since “SmackDown” is a two-hour show, USA was able to negotiate a lower price, helping them secure the rights.
USA was motivated to retain WWE programming to maintain its viewership numbers, but advertising revenue also played an important role in these media rights negotiations. For any company to invest such large sums over a five-year contract, ad revenue must be substantial enough to cover the expense.
Although “SmackDown” consistently ranked high in the 18-49 demographic, its audience lagged in household income compared to other major wrestling programs. As a result, a 30-second commercial slot on FOX brought in only about $47,000, far less than what’s expected for network TV shows, which made FOX hesitant to continue with WWE.
Meltzer also pointed to statements made by FOX CEO Lachlan Murdoch, who explained that the network wasn’t hitting the necessary advertising benchmarks to recover their investment.
Murdoch largely blamed the shortfall on WWE’s fanbase and admitted that FOX had underestimated the retransmission revenue from WWE programming. In the end, he concluded that moving on from the partnership was the right call for both sides.
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