In a follow-up to my story on the History of Monday Night Raw, I’ve done some additional research on WWF’s television rights fees on the USA Network prior to their move to Viacom in 2000.
With the assistance of David Bixenspan, we found a bit more clarity on the figure. In early 1998, WWF and USA Network agreed to a three-year deal, however, either side could opt out with a notice given by November 30, 1999 (which gets extended until the end of March 2000). This is when Viacom comes into the picture with many options on the table that extend to the XFL and a major rights fee hike for its flagship, Raw.
In Sex, Lies, and Headlocks by Shaun Assael and Mike Mooneyham the following was written regarding the rights fees from a three-year between WWF and USA in early 1998 when discussing a renegotiation in late 1999 and early 2000:
Raw, for instance would see its $12,000-a-week fee doubled in the third year of the deal – but didn’t mention much else. The McMahons reacted angrily when they got the initial offer.
It led to a lawsuit being filed by USA Network in Delaware Chancery Court to block the WWF from leaving based on the right of first refusal built into the deal for their existing broadcaster. During the testimony, Linda McMahon gave the following answer regarding the rights fees being paid by USA:
Q. What were you generally being paid by USA in the 1998 contract?
A. Under the ’98 contract, I think the year we are in now, we are paid about, rough number, it’s about $45,000 per week for two hours of programming on Monday nights. And it’s 20 and 12 for the one-hour shows. So, we knew that we were underpaid. We did sell the advertising time, that’s true, as Mr. Brenner had testified to. But we assumed the risk of that sale, as well.
This would indicate that the programs airing on USA (Raw, Sunday Night Heat, Livewire, Superstars) had a sliding scale with Raw on the upper end at $45,000 per week, Heat presumably around $20,000 per week and $12,000 for Livewire and Superstars. Linda did caution it was a “rough number” when estimating the amount for Raw but underscores the point of how underpaid they were when Raw numbers had exploded.
If you go with the $45,000 figure for Raw, it works out to around $4.6 million per year under the 1998 agreement along with whatever ad revenue WWF generated, which was broken down as follows in July 2000 by Multichannel News:
Along with the $550,000 weekly license fee for the cable series, Viacom agreed to pay WWFE a minimum of $3.5 million per year to produce up to seven specials that could run on TNN, MTV, UPN or CBS.
WWFE also keeps more ad revenue than it did with USA. WWFE currently sells 80 percent of the ad revenue and USA sells 20 percent.
Although USA has repeatedly downplayed the WWF loss by noting that 20 percent figure, McMahon said last week that USA also gets 40 percent of revenue from the WWFE inventory, versus a guaranteed minimum.
In the future, WWFE will sell 80 percent of the ad inventory and Viacom will sell 20 percent. But Viacom will only get 30 percent of ad revenue WWFE earns, with no guaranteed minimum, McMahon said.
Linda McMahon claimed that USA’s initial offer was to raise the figures to a range of $50-80,000 per episode and noted at the time, “I was so disappointed that I couldn’t even respond.”
Viacom would end up securing the rights to those four shows at a 5x increase of just over $28 million per year in the five-year pact.
This doesn’t represent all the revenue that WWF earned as they also controlled as they had control of the advertising revenue (revenue they lost when returning to USA in 2005).
WWF Raw is War launched on TNN in September 2000 with the network rebranding to Spike TV in the spring of 2003.
While Sunday Night Heat was transferred from the USA Network to MTV, it would land on Spike TV in April 2003 and run on the network for 2 ½ years before it became a digital property and was shelved in 2008.
Livewire changed its branding in the summer of 2001 to WWF Excess with a Saturday night slot (at one time, rumored to be a potential landing spot for a weekly WCW series), and eventually, became the slot for Velocity and Confidential.
In early 2005, Viacom publicly pulled out of re-negotiations with the WWE and left the promotion to scramble for a new home with minimal leverage. They had an advocate in Bonnie Hammer that allowed the WWE to return to the USA Network while handing over the advertising revenue they have previously enjoyed.