WWE’s largest broadcast partner, Netflix, heads into its third-quarter earnings release amid significant changes.
Tonight, the world’s largest streamer will report its Q3 results and take questions, less than a week after purging about 1,000 staff members, representing six percent of its workforce. The cuts included chief content officer Bela Bajaria and head of film David Lin.
It was a major statement from the company that analysts viewed as a response to a 40% drop in its stock over the past year and engagement (read: viewership) failing to increase at the level of expectations and in comparison to YouTube.
It is a signal of concerns about future growth more so than its current health. Last quarter, Netflix reeled in $3.4 billion in net income (up 8.6% from Q2 2025) and generated $12.6 billion in revenue. It wasn’t enough profit to propel growth on Wall Street as its stock fell seven percent after the earnings were reported in July.
Bejaria was tasked with widening the portfolio of Netflix and helped spearhead its live sports initiatives with agreements with the NFL and bringing WWE’s global rights under its tent. Her role overseeing a $20 billion programming budget extended beyond live sports as Netflix has ventured into the podcast space as it flirts with user-generated content to compete with YouTube using established brands such as various shows from The Ringer network.
Her replacement is Peter Rice, a former executive at Disney and Fox, with a history of dealing with WWE. In 2018, Rice was serving as chairman and CEO of Fox Networks Group and was among the people in the room negotiating for WWE’s rights to SmackDown. The Hollywood Reporter detailed the closure of the deal, which was the most important in WWE’s history up to that point.
Fox had been in business with the UFC since 2012, and their rights were leaving the network for ESPN by the end of the year. Rice was joined in a meeting by Rupert and Lachlan Murdoch, Eric Shanks, George Barrios, Michelle Wilson, and then-CAA agent Nick Khan. It was the set of television negotiations that brought Khan into the WWE mix and would lead to his full-time hiring two years later as WWE president. Rice contacted Khan to steer the SmackDown rights toward Fox. The USA Network had the right to match any competing offers of $200 million per year or less but did not pursue. SmackDown moved to Fox in October 2019 with an average annual rights value of $205 million for the Friday property.
Rice would not stick around for the life of the WWE relationship, accepting a role as chairman at Walt Disney Television. Ultimately, Fox wasn’t interested in a renewal of SmackDown as Lachlan Murdoch explained near the end of its deal in 2023, “We didn’t attribute enough significant retransmission revenue to the WWE either. So, it made sense for us to move on from them. They’ve been a great partner for many years. But just quite simply, we’re very disciplined, and the R.O.I. didn’t meet our disciplined parameters, so we wish them luck, and we’ve moved on from them”.
WWE is in its second year of a ten-year agreement worth $5 billion, although with an “opt-out” clause after five years. Part of the appeal was WWE lining up its rights to allow Netflix a global stranglehold on WWE’s programming in many territories, including Canada, where the entire package (including PLEs) is housed. New territories have jumped on board, most recently Japan after WWE’s deal with ABEMA ended.
Unlike the NFL, or one-off events like a Jake Paul fight, WWE is year-round programming on a global scale and part of its appeal, notes Sara Fischer of Axios on The Varsity podcast:
Sports have become the thing that keeps people from churning their streaming subs…My bet is that (Netflix) is going to have to think about this as a calendar year. This is one of the reasons why, by the way, Netflix really likes the WWE. It’s a full year-round of events.
Netflix has an overarching issue of scale, and it explains why they were so aggressive in the bid for WBD and its endless IP it could integrate (a subject Nick Khan has noted several times regarding WWE’s IP and further monetizing). However, Wall Street was not as keen during its attempted bidding war with Paramount Skydance and saw the stock plummet and has yet to recover.
The positive was Netflix saved over $82 billion by being outbid by Paramount, but the downside was analysts understanding how vital this was for the streamer to acquire and asking where the next growth will come from. That question is among many the top executives are likely to face as they paint an optimistic path on tonight’s call.
On the horizon is a series of big NFL games, including a U2 halftime concert added to the Thanksgiving Eve game between the Green Bay Packers and L.A. Rams and two games on Christmas Day. The FIFA Women’s World Cup will be staged on the streamer next year, and they just acquired the FIFA World Cup rights in Spain and Andorra for 2030.
Clearly, live sports is a growth area for Netflix, especially with the addition of its ad-tier in recent years and reports of Netflix exploring a free ad-supported tier.
WWE falls in the middle of live sports and scripted entertainment with elements of each. Raw consistently lands among the streamer’s top ten TV programs weekly. It is an experiment for Netflix that goes against the “big event” strategy it has utilized for Boxing and MMA events as one-offs. Despite major audiences for Mike Tyson vs. Jake Paul, and Ronda Rousey vs. Gina Carano, it has not encouraged Netflix to make Boxing or MMA a regular staple on the platform.
It was openly discussed by Mark Shapiro that Netflix was in the mix when the UFC’s rights were being negotiated, with an interest in global rights, similar to WWE, but UFC went with Paramount and opted to sell its international rights off individually.
In the U.S., the major WWE events are not on Netflix, but on ESPN Unlimited. On a worldwide basis, where it carries the PLEs in many territories, the first two years have shown that the Royal Rumble has become the top driver for viewership, ahead of WrestleMania in 2025 & 2026.
WWE’s timeline of major negotiations would include the five-year mark allowing for the “opt out” by Netflix, and would need to be invoked sometime in 2029, if they chose that route.
An executive overhaul will allow some leniency for new faces and strategies, but the next questions are headed for co-CEO Ted Sarandos, who stated the streamer “is not growing as fast as I want us to,” and it’s imperative they find a remedy for that problem.
