Xtreme bedfellowsNBC takes a stake in WWF' s XFL; TV rights for wrestling are up for grabs 4/02/2000 08:00:00 PM Eastern
Grappling over wrestling rights reached a fever pitch last week. First NBC took a 50% stake in the World Wrestling Federation's embryonic Xtreme Football League. And as the week ended, television rights to the WWF' s Raw Is War and Sunday Night HEAT remained up for bids, with speculation at least as rabid as the fans.
One source at the Viacom-CBS conglomeration said the company offered to take a $100 million equity stake in the WWF in exchange for a chance to take Raw and HEAT from USA Network, where they have become the highest rated shows on basic cable. CBS would run both on TNN, along with XFL games not picked up by NBC, the source said. But another industry source familiar with the negotiations said Viacom-CBS by no means has a lock on the properties.
CBS had no comment, but sources stressed that no formal offer had been made as of last Friday. WWF Chairman Vince McMahon said last Wednesday that CBS was still very much in the running, and that a deal would be final within 30 days.
USA had the exclusive lease on that property for the last 14 years, but WWF Chairman Vince McMahon let it be known in January that he would consider shifting the rights to a new equity partner. USA Chairman Barry Diller still has first right of refusal. Losing wrestling knocks at least two-tenths of a rating point from USA' s average prime time rating.
NBC passed on wrestling because it wasn' t right for the network, said Scott Sassa, NBC's West Coast president. The XFL, billed as "smash-mouth" football, is a different story. NBC is looking to drag in legions of young males to its lonely Saturday night schedule. If anyone knows how to do that, it' s McMahon, Sassa said.
NBC took a 3%, $30 million stake in the WWF to cement the deal, paying $13 each for 2.3 million shares. WWF stock was trading at $16.75 Friday afternoon. Until February, when McMahon announced the formation of the XFL, the stock had fallen steadily since the WWF went public last October. After opening at $34, the price hit $9.75 in February, partly due to McMahon's comment at the time that if Wall Streeters didn't like the XFL play, they could "kiss my ass." The stock has since recovered some ground.
The XFL will initially consist of eight teams in major cities throughout the U.S. NBC intends to run the first XFL game April 21, 2001.
Neal Pilson, president of Pilson Communications and former president of CBS Sports, said the challenge for NBC is reconciling the theatrics of the WWF with legitimate football.
"They' ll have to put a quality product on the field and give it the kind of promotion that' s been successful for the WWF," he said.
Pilson was at CBS when it considered starting its own league after losing the NFL in 1994.
"I fully understand what Dick [Ebersol] and Ken [Schanzer] are doing at NBC," he said, "risking money on a property in which they have a 50% equity position, instead of losing money on something they have no equity in, which is their assessment of the NFL television deal."
Ebersol said NBC would have lost about $100 million a year on the current NFL contract, which is the estimated amount it will take to start up the XFL.