UPN Renews Smackdown!
Net will pay for rights rather than selling time to WWE
By Paige Albiniak -- Broadcasting & Cable, 3/17/2003
In a more traditional network-programmer arrangement than their previous deal, UPN will pay World Wresting Entertainment a license fee to air its biggest hit show, WWE Smackdown!, and also to sell the advertising within the Thursday-night beefy brawl.
Since 1999, WWE has paid UPN $16 million a year to air Smackdown! and sold most of the ads itself, leaving two minutes an episode to UPN. Under the deal negotiated last week, UPN will pay WWE nearly $500,000 a week, or close to $26 million a year, according to reports. UPN also will sell all the commercials itself. UPN's corporate parent, Viacom, owns a 31/2% stake in WWE, and WWE shows also air on Viacom-owned cable networks TNN and MTV.
Both UPN President of Entertainment Dawn Ostroff and WWE CEO Linda McMahon called the deal a win-win.
"Everyone was looking at what made sense to everyone. We sell UPN as a business, and WWE produces shows as a business, so this made a lot of sense," Ostroff said.
"We certainly expect that this deal is going to be more profitable for us," said McMahon, eyeing the somewhat reversed fortunes of her company. "The license fee will exceed the advertising revenues."
Like all of UPN this year, Smackdown has faced declining ratings. The show is down 16% in adults 18-34, 18% in persons 12-34, 13% in men 18-34 and 20% in male teens. But it remains a big draw for young males, a demo advertisers love and find difficult to reach.
Smackdown places UPN third on Thursday nights, behind NBC and CBS, in persons 18-34 and first in men 18-34 and male teens.
Smackdown is easily the most-watched show on UPN, attracting an average of 5.6 million viewers per episode season-to-date, followed by Enterprise with 4.8 million and One on One with 4.7 million.
After reigning over the media world in the '90s, WWE has taken a beating over the past two years. Last month, it closed its Times Square media complex, The World, whose poor performance contributed heavily to a $26.7 million third-quarter loss. It lost a long-running court battle with the World Wildlife Federation in May 2002, forcing it to change its name to World Wrestling Entertainment, or WWE. And, in 2001, it took a $27.7 million loss on the XFL, a co-venture with NBC.
