9. Bring The Financial Benefits Of The TV Deals To The Bottom Line
The hope for WWE's new domestic TV rights fees is that the company will retain a sizable cash cushion. Should they succeed in doubling TV rights, that would represent an increase of more than $100M annually. It's important they do not foolishly spend it. They've been stream-lining costs for several years, and they need to ensure that they don't start over-spending on television just because they can. It's cheaper now to produce Smackdown as a taped show on Tuesday nights. Moving Smackdown to a live show would increase costs. Running PPVs that are run more like TV tapings (and shown on the network) are going to be cheaper. They have a vast library of footage they can use; original programming for Network should not be subsidized by the out-sized WWE TV contracts. This is going to be a delicate balance because whomever is paying the top dollar for the WWE contracts (NBCU, Viacom, Fox, ???) wants to feel they're getting bang for their buck. Unless it's explicitly in the deal, there's no reason that television should substantially cost more to produce with this new contract. For a company that only registered $2.8M in Net Income last year, they'll eyeing a deal that could be nearly 20% boost to the annual revenue with very little added cost. The key here is to "prevent unnecessary spending" and pay down long-term debt. It's not a sexy solution, but it's something that would please the investors.