Monday morning, WWE and NBC announced that Peacock will take over as the exclusive U.S. distributor of the WWE Network, moving all of the company's content and subscribers over to Peacock, where subscribers will pay $4.99 for membership, half the current price of the WWE Network, or $9.99 for ad-free access to all of the content from Peacock and WWE. In a follow-up article on the Wall Street Journal, the price of the deal is said to be a billion dollars for five years.
To break even on that price, Peacock will need to sell more subscriptions than WWE has proven able to in the seven years its operated the WWE Network. When the service launched in 2014, WWE claimed it would need a million subscribers at $9.99 per month to break even with its costs. It took a while, but they eventually reached that number. However, seven years later, subscriptions hover around 1.6 million, though some percentage of those subscribers are taking part in promotional offers for less than $9.99 per month, and some percentage of those subscribers are also outside the U.S. and therefore not relevant to the Peacock deal. Some WWE Network subscribers may already also be Peacock Premium or Peacock Premium Plus subscribers.
For the purpose of a rough look at the numbers though, let's assume those are all U.S. subscribers who are not current subscribers to Peacock. That works out to 1.6 million subscribers paying $9.99 per month for Peacock Premium Plus, the ad-free version of Peacock, which would amount to $192 million per year in revenue, or $960 million over five years, less than the $1 billion NBC is reportedly paying. If all of those subscribers are paying for the $4.99 ad-supported plan, that revenue is cut in half, though some will be made up by ads.
Looking at the numbers, NBC must either see potential for serious growth in subscriptions, which seems unlikely considering WWE's ever-declining ratings, or they must see potential to make even more money off the ad-supported content, which also seems unlikely considering WWE has traditionally attracted a lower grade of advertisements that don't pay as much as other programming with similar ratings. It's possible NBC simply fell into the same track they did when they agreed to increase the price they pay for WWE Raw, or that Fox fell into when they shelled out buttloads of cash for Smackdown.
WWE's live sports-like programming seems like it would be a big success in today's television market. In truth, the company performs far worse than it ought to on paper, due largely to stagnant creative and a lack of mainstream stars. A move to Peacock for the WWE Network is unlikely to change any of that, though it will help WWE rake in even bigger profits. As for NBC, they've been used to being disappointed by WWE programming for decades, so the new deal will probably be more of the same.