From Nasdaq:

Netflix (NASDAQ: NFLX) has signed a 10-year, $5 billion plus deal with TKO Group Holdings (NYSE: TKO) for WWE’s Raw distribution rights, marking its first big move into live sports. The deal also includes international rights to WWE’s other shows and live events, with a potential expansion to India and it will also gain access to WWE’s documentaries, original series, and upcoming projects. The move is a step for Netflix to compete with rivals such as Amazon and Disney in sports programming.

Streaming giant Netflix’s move into live event programming could significantly impact its business. The deal with WWE is a strategic move to expand Netflix’s audience and international library offerings. Netflix has fallen behind its competitors Amazon and Apple, which have broadcasted live sports events since 2017 and 2022, respectively. Access to WWE’s live events and documentaries will contribute to expanding Netflix’s offerings, while also boosting its ad revenue from advertisers who prioritize live events for ad placement.

TKO Group Holdings (NYSE: TKO), a relatively new public company formed from the merger of WWE and UFC, has seen its stock price struggle but could benefit from the partnership with Netflix. The deal with Netflix provides WWE an opportunity to reach a wider audience and replays nearly 1.3x its current annual average revenue, suggesting a potential opportunity for growth and increased popularity for WWE.

Netflix and TKO stocks trade at high valuations, with Netflix and WWE at forward price-to-earnings (P/E) ratios of 30.8 and 29.6, respectively; higher than the average of companies that make up the S&P 500, which is 21.7. Despite the rich valuations, both stocks offer unique value propositions, with Netflix consistently delivering a profit through its streaming services. While each stock may be volatile, they offer distinct potential for long-term growth.



Read more: Here’s Why Netflix’s Deal With TKO Is a Game-Changer for Both Stocks