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Earnings Call Analysis
Q2-2023 Analysis
World Wrestling Entertainment Inc
WWE has hit a stride with record financial results this quarter, delivering record revenue and adjusted OIBDA, surpassing previous guidance and continuing a trend of record-breaking financial performance set in motion in 2021 and 2022. These results position WWE firmly on track to deliver another year of record revenue and adjusted OIBDA for 2023.
Negotiations are ongoing for the domestic rights of WWE’s flagship programs Raw, SmackDown, and NXT, riding the wave of increased viewership and strengthened ratings. SmackDown’s year-over-year viewership increased by 26% in the 18 to 49 demographic and 12% in total viewers, while Raw saw an increase by 19% in the key demographic and 3% in total viewers. NXT, not to be outdone, boasts increases of 49% and 52% in the 18 to 49 and 18 to 34 demographics, respectively. These bolstered audiences further strengthen WWE's position in the market as they continue negotiations.
WWE's quarter also shined in terms of live events, with a record-setting gross that surpassed the previous record by 6%, attendance up 45% year-over-year in North America, and record performances for events such as Backlash, Night of Champions, and Money in the Bank. Attendance numbers are through the roof, with early ticket purchasing pointing to sustained momentum, and merchandise sales setting new records as well. Additionally, monumental increases in event sponsorship were noted, including a 200% increase at Royal Rumble and nearly 300% at Elimination Chamber year-over-year, resulting in the highest grossing sponsorship year in WWE history by August.
WWE continues its trajectory forward, expecting another year of record revenues and OIBDA as it plans to close a deal with Endeavor, merging WWE with the UFC to form TKO Group Holdings, completing anticipated regulatory reviews, and envisioning a close on the deal in the second half of this year. Financially, WWE's prospects remain solid with targeted adjusted OIBDA for 2023 set between $395 million and $410 million. Q3 2023 guidance anticipates an adjusted OIBDA between $75 million and $85 million, considering certain expected revenue declines in Consumer Products and due to the timing of production for WWE themed series.
Investing in its future, WWE is on track with its new headquarters project, with CapEx spending to date of approximately $250 million, and an additional expected spend of $70 million to $90 million to complete the project. With estimated total costs for the project now ranging from $320 million to $340 million, WWE has prudently included approximately $70 million in IT equipment and broadcast production technology that would have been necessary regardless of the new headquarters.
WWE is in a strong negotiating position for its upcoming international rights deals, particularly in the UK. The company expresses confidence while acknowledging the Sony India Zee merger -- a factor which casts a level of unpredictability in the Indian market. With regarding to U.S. content rights, the management team underscores a growth projection anticipating the impact from the Raw and SmackDown renewals, as well as the Peacock deal renewal projected for 2026.
On the digital front, WWE has secured a beneficial ad share deal with Twitch, which rewards its superstars. In addition, WWE appreciates the flexibility of tiered pricing offered by streamers like Peacock, which has had both short-term and free offerings of WWE content that have helped to attract viewers. This strategy of allowing consumers to sample the product has aided in WWE's digital growth, and similar strategies are under consideration moving forward.
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Good morning, and thank you, everyone, for joining us today. To start, our results in Q2 exceeded the high end of our guidance. We delivered record financial results in the second quarter, record quarterly revenue and record quarterly adjusted OIBDA. We're on track to deliver another year of record revenue and adjusted OIBDA in 2023, continuing our trend of then record revenue and OIBDA in 2021 and then record revenue and OIBDA in 2022. I, along with Frank Riddick, will touch on some financial and operational highlights from the quarter in more detail. But before I do, I want to take a moment to address a few other topics. First, the TKO transaction. As discussed on our last earnings call in early May, we announced on April 3rd, just a day after a record breaking WrestleMania, that we came to an agreement with Endeavor to combine WWE and the UFC into a new publicly listed company, TKO Group Holdings. We remain excited about the combination of these highly complementary businesses and rolling out the global live sports and entertainment pure play. We collectively remain focused on completing our regulatory review process. And as we have said from the start, we expect the deal to close in the second half of this year. Second, media rights. We are currently engaged in deal conversations for the domestic rights to our weekly flagship programs, Raw, SmackDown and NXT. As expected, there is significant interest from the marketplace and these conversations are progressing well. As these conversations are taking place, we are seeing record viewership for our premium live events, and increased ratings for Raw, SmackDown and NXT. These numbers underscore the enduring strength of our product.
Looking at SmackDown first. SmackDown was up 26% in the key 18 to 49 demo and up 12% in total viewers year-over-year. This compares to broadcast viewership that was down double digits in the key demo and down overall in total viewers for the same period. Amongst both 18 to 49 and 18 to 34, SmackDown ranked number one on Friday primetime for all of broadcast television. On June 2nd, our SmackDown episode reached nearly 1 million viewers in the 18 to 49 demo, not only our highest 18 to 49 viewership in 2023 but our strongest demo performance in over three years. Turning to Raw. Raw was up 19% in the key demo and 3% in total viewers for the quarter. This compares to cable viewership that was down double digits in both the key demo and down overall in total viewers for the same period. This past quarter, Raw was once again the number one show on USA Network and the number one entertainment program on all of cable. For both programs, Raw and SmackDown had the highest engagement in their history. Viewers are watching longer than ever before. The time spent viewing for Raw is up seven minutes this quarter from last year and for SmackDown, it's an increase of four minutes, which means more ad dollars for our network partners. Similarly, our third brand, NXT has also been surging with younger audiences. So far this quarter, NXT is up 49% from last year in the 18 to 49 demo and up 52% from last year in the 18 to 34 demo.
Before we go to premium live events, allow me to also acknowledge that almost two weeks ago, our founder, Vince McMohan, underwent major spinal surgery. While remaining the Executive Chairman of WWE, Vince decided to take a medical leave of absence to focus on his physical recovery. We wish Vince the best in his recovery and will respect his privacy as it relates to this medical matter. On to our premium live events since our last call, we staged three premium live events. Each one has continued the trend of delivering record performance across multiple categories. In May, Backlash from San Juan Puerto Rico was the highest grossing and most viewed Backlash in WWE history, up 34% in viewership from the prior year. Night of Champions emanating from Jetta was our most watched live event ever from Saudi and viewership was up 45% versus our last show from there this past November. Then in July, Money in the Bank from the O2 arena in London was the most successful and highest grossing Money in the Bank of all time, setting the record for the highest grossing arena event in WWE history. Viewership there also up 14%. This upcoming Saturday is Summer Slam at Fort Field in Detroit. It marks the first WWE event at Ford Field since WrestleMania 2007 and the first Summer Slam in Michigan since 1993. Interest in this premium live event is high and to date, we have over 43,000 tickets sold and are on track for a sellout.
Please note that three of these four premium live events will have taken place outside of the 50 states. This record run of success for our premium live events comes off the heels of WrestleMania 39 from SoFi Stadium in Los Angeles in April, which was the most watched and most profitable Wrestlemania in our company's history. Moreover, we were glad to see a recent report from Applied Analysis that highlighted the economic impact that WrestleMania had on the Southern California region. The study found that WrestleMania 39 had a total economic impact of $215 million. Our continued effort to broaden WrestleMania's scope of events brought out-of-town visitors staying an average of four plus nights in Los Angeles. More than half of attendees travel to LA from outside of Southern California with 15% of attendees traveling in from an international location and visitors had an average annual income of more than $100,000. This performance underscores WWE's ability to drive substantial commerce to a local economy whenever and wherever we stage our premium live events. As we did in Cardiff Wales last September and San Juan Puerto Rico 3 three months ago, we are excited to continue to team up with local governments and municipalities to deliver these kind of results and look forward to sharing a few announcements regarding this in the months ahead.
Now if we could discuss live events for a moment. This past quarter was WWE's highest grossing live event quarter of all time, surpassing the previous record by 6% while setting 34 in-market sales records. In North America, we averaged nearly 10,000 attendees per event, a year-over-year increase of 45%. Please keep in mind what you already know. We do over 200 live events in North America a year, which seemingly makes that average attendee per event that much more impressive from our point of view. We are not seeing any signs of a slowdown. In fact, fans are purchasing tickets further in advance than we have historically seen.
Next, Consumer Products. The momentum we are seeing is also generating record in-venue merchandise sales. In the quarter, we set records for in-venue sales at WrestleMania, Backlash and Money in the Bank. WWE Shop also continues to see steady growth as we round the one year anniversary of our e-commerce deal with Fanatics. Sales for Q2 2023 were up double digits versus the prior year's quarter and operational costs are down. In sponsorship, it was another growth quarter. At Royal Rumble in January, we saw 200% sponsorship increase for the event year-over-year. Elimination chamber in February, we registered nearly a 300% sponsorship increase year-over-year. And at WrestleMania in April, we sold a record $20 million in sponsorship, more than a 100% increase over our previous sales record. For Backlash, we're up 98% in sponsorship year-over-year. Money on the Bank sponsorship numbers also up, making it our highest grossing international event in terms of sponsorship ever. We continue to expand the number of WWE partnerships with sponsors while executing against our strategy of driving incremental dollars from our existing partners with the average spend per client up 38% for the year. All told, by August, we have already booked our highest grossing sponsorship year in WWE history. In closing, I want to reiterate how pleased we are with the performance of our business as we head into the second half of the year. Our expectation is to deliver another year of record revenue and adjusted OIBDA while remaining focused on obtaining final regulatory approval, along with our partners at Endeavor, so we can proceed together with TKO.
With that, I'll now turn the call over to Frank.
Thank you, Nick. Before I review our financial performance and business outlook, I want to briefly discuss the transaction we announced in April with Endeavor. As Nick highlighted, we're very excited about the agreement we reached with Endeavor to combine the WWE and UFC businesses. We're working as quickly as we can to close the transaction. In June, we announced that we obtained all of the required regulatory approvals. While the transaction remains subject to the satisfaction of customary closing conditions, we continue to expect the transaction to close in the second half of 2023.
Turning to our operations on Slide 4. In the second quarter, we generated record quarterly revenue of $410 million and record quarterly adjusted OIBDA of $141 million, which exceeded the high end of our guidance. Our performance in the quarter places us firmly on track to meet our full year outlook. I'll touch on the outlook for the third quarter and full year in more detail later in my remarks. On Slide 5 of our presentation, we detail our performance by segment in the quarter as compared to the prior year quarter. The results in the quarter reflect the shift in timing of the staging of a large scale international event, which occurred in the second quarter of 2023 as compared to the first quarter of 2022. Looking at our Media segment on Slide 6. Adjusted OIBDA increased 39% on a 32% increase in revenue. The most notable item driving the results was an increase in other revenue due to the staging of a large scale international event. Network revenue increased due to the contractual escalation of the media rights fee for our premium live events. During the second quarter, we changed the premium live events calendar. As a result, we recorded approximately $7 million of incremental network revenue. This change has no impact on full year network revenue. Core content rights increased primarily due to the contractual escalation of media right fees for our flagship weekly programming, Raw and SmackDown. The increase in revenue was partially offset by an increase in operating expenses. The increase in expenses was primarily related to an increase in production costs, including the timing of the large-scale international event.
Now let's turn to our Live Events business as shown on Slide 7 of our presentation. Adjusted OIBDA from our live events improved $21 million based on a 51% increase in revenue. During the second quarter, we experienced strong demand for our live events. We held 53 total events with 43 events in North America and 10 in international markets. Average attendance in North America was approximately 9,900, a 45% increase as compared to the prior year period. In our Consumer Products segment, as shown on Slide 8, adjusted OIBDA was $13 million on revenue of $28 million. Results in this segment reflected a number of moving pieces. Licensing revenue reflected the decrease in video gaming and collectibles revenue. As previously discussed, the change in e-commerce and venue merchandise revenue reflects the transition of our retail platforms to Fanatics. Now let's turn to WWE's capital structure as shown on Slide 9 of the presentation. In the second quarter, we generated $31 million in free cash flow as compared to generating $9 million in the prior period. This increase was primarily due to higher income from our operations and the timing of working capital. In the second quarter, we incurred $46 million of capital expenditures, $32 million of which related to our new headquarter facility. Excluding the new HQ CapEx, free cash flow would have been $63 million in the quarter.
During the quarter, we returned $10 million of capital to shareholders in the form of dividends paid. We also exchanged almost all of our outstanding convertible senior notes. We issued an aggregate of 8.5 million shares for approximately $211 million principal amount of the notes. We also unwound the hedge and warrant transactions, which resulted in net cash proceeds of $51 million. As of June 30th, approximately $4 million in principal amount of the notes remained outstanding. At June 30th, we held approximately $524 million in cash and short term investments. Debt totaled $25 million, including $4 million associated with the carrying value of the convertible notes I just mentioned. We have no amounts outstanding under our $200 million revolving line of credit. Looking ahead, we're not changing our outlook for the full year adjusted OIBDA at this time. We continue to target a range of $395 million to $410 million, which would be an all-time record for the company. As we've previously discussed, we're also targeting a record revenue in 2023. As for the third quarter of 2023, we're targeting adjusted OIBDA in the range of $75 million to $85 million. The estimate reflects a decrease in revenue. The decrease in revenue primarily reflects an expected decline in revenue at the Consumer Products segment and a decline in third party original programming revenue in our Media segment. This is due to the timing of the production of premium WWE theme series. The expected decline in Consumer Products revenue relates to the timing of revenue recorded as a result of the early termination of agreement of our licensed collectibles as well as the transition of the company's retail platforms and venue merchandise business to Fanatics.
Slide 10 of our presentation provides an update on capital expenditures. For 2023, we now expect total company CapEx of $175 million to $195 million, up from our prior forecast of $150 million to $170 million. The current estimate includes spending of $135 million to $150 million related to our new headquarters facility with the remainder primarily related to the maintenance and enhancement of existing production and enterprise technology infrastructure. Slide 11 provides an update on total CapEx for the new HQ facility. To date, we spent approximately $250 million in CapEx on the new HQ project and have received offsets in the form of tenant improvement allowances of approximately $35 million for a net spend of approximately $215 million. Based on our latest estimates, we expect to incur an additional $70 million to $90 million in CapEx to complete the project. As a result, we now forecast that total gross spend on the new HQ project will be in the range of $320 million to $340 million, an increase of approximately $30 million from the range we provided in our fourth quarter '22 call in February of this year. After offsets, which we continue to expect to be in the range of $110 million to $120 million, the net spend is expected to be within a range of $210 million to $220 million. Our estimates for the total gross spend increased primarily due to changes in scope and costs associated with the additional time needed to complete the work. As a reminder, the estimated total for the new HQ project spend includes approximately $70 million of accelerated expenditures for IT equipment and broadcast production technology that likely would have been spent in absence of this project.
In conclusion, WWE generated strong second quarter results that reflect continued robust demand for our events and increased consumption of programming across platforms. Looking ahead, we remain focused on our day-to-day operations while working to close the transaction with Endeavor as quickly as possible. We believe that WWE remains well positioned to take advantage of significant growth opportunities across our various lines of business. That concludes our remarks, and I'll now turn it back to Seth.
Thanks, Frank. Operator, we're ready for Q&A. Please open the lines.
[Operator Instructions] We'll take our first question from Brandon Ross with LightShed Partners.
Just going to get the obvious one out there to start. Last time you guys did your Raw and SmackDown deals, the deals were done shortly after the exclusive window expired. It's moving slower this time. What's the reason for that in your mind and is there an updated time line on how you see the domestic deals resolving? And then I have a follow-up.
Last time having been across that negotiation, the starting prices of where we were for Raw and SmackDown, we're far, far less than the starting prices now, which means deeper and longer conversations. All of those conversations have been productive. We remain quite optimistic on it. In terms of time, I've often set a negotiation, you can control a lot of the process, you can never control the timing of the negotiation. So we feel we're there in full force with a robust product that seems to have quite high ratings and relevancy at this moment and we think the results will be what we expect and hope they'll be.
And I think since your last call, it seems that we've seen an even further acceleration of bundle decline in this move to OTT. ESPN is now saying they're basically ready to go OTT, I guess, probably after the NBA deal is done. It feels like the leagues in general are preparing more diligently for a digital future. Does that change how you're thinking about your content licensing strategy, and do you need a live digital component to this domestic deal to future proof yourself? And then just generally, how do you think about balancing reach and the dollars and future proofing your business as you approach this deal?
Just a threefold question. Any other attachments to that?
I could give you some more.
Okay. I'm sure. I'm sure of that, so a couple of things. Keep in mind, WWE, I believe, was the third mover in the OTT space, the digital space, 2014 going off of what was traditional pay-per-view onto the WWE network which, again, D2C, OTT understanding that that's where the business was going. I think with our Peacock deal from 2.5 almost three years ago, we also saw where the business was going there, that a number of stand-alone OTTs would create a crowded marketplace and there's only so many consumer dollars to go around. So the ways that these deals have ended up, broadcast television, we've been able to explore with Fox. Cable television, obviously, we've been in business in basic cable for decades. With the Peacock deal it allowed us to explore the digital space, there's so many upsides to it, including live viewership, same day viewership, viewership over the first 24 hours, 72 hours over the first week, all of these, and obviously, subs matter to each of these content buyers. And I think all of them see the results that have been driven towards Peacock and the OTT buyers seem quite interested in not only raw, not only SmackDown, but NXT as do the more traditional buyers. So we think it's a very strong landscape for products that register.
Do you have to be on digital [though] as the traditional bundle goes away, is it important to have that as a component of your deal?
It's important and that we did it with Peacock. And when we look at the other programming that we're dealing with now, whatever those deals are. By the way when all else fails look at the NFL. So when the NFL, if you look at their most recent deals, there's no longer a split between digital rights and linear rights, as there was a few years ago, Thursday night football, okay, it's on CBS, okay, it's been split NBC, CBS. Okay, let's shift it over to Fox. Okay, now let's do Amazon when it was with CBS and NBC. It was also on Twitter, if you remember that, then it shifted to Amazon. Now it's an all-in package. We expect the same thing. If it's a traditional buyer, there will be a digital presence. If it's a digital buyer like Peacock, there won't be a traditional presence. So depending on what the totality offer looks like we think we'll be in good shape there.
We will take our next question from Ben Swinburne with Morgan Stanley.
Nick, two things going on right now that obviously we're all watching. Brandon mentioned the NBA deal or negotiation and there's also obviously the writers and actors strikes. I'm just wondering, do you think we should be thinking about the NBA as something that has to get done prior to your deals? I think I know the answer, but I figured I'd ask you again. And then secondly, do you think the labor strikes and the production shutdown speed up, slow down the process for you guys, have any impact at all? And then I just want to ask Frank, just on the guidance. You guys beat the high end of the EBITDA guide for Q2, but you didn't raise the year. I'm just wondering was there sort of a timing shift in how the EBITDA is falling through the quarter and that explains a little bit of the unchanged full year given the 2Q outperformance?
I'll take the easier one first. Yes, it partially reflects -- the fact we didn't raise guidance partially reflects timing move between the first half and the second half, and there's a couple of items that we can get into later that drive that. But in addition, given where we are with the Endeavor transaction, it also just doesn't make sense from our perspective to change the guidance at this point given that the deal will -- we're trying to close the deal, as we said, in the second half. So it may not be totally germane going forward. So those are the two factors.
Ben, if you could repeat the first part of your question.
Just wondering, I think there's at least some thought out there that the NDA is sort of the elephant in the room from a rights point of view. And so until that's done, WWE is less likely to get completed. So be curious on your thoughts there today. And then on the writers and actors strike, almost all the companies you're having conversations, maybe all of them, have a huge part of their business that's got a tremendous amount of new uncertainty around it. And I'm just wondering if you think that helps, hurts or is immaterial to sort of WWE's hand and all this.
On the first part of the question, you had said initially that you had to take on it and thought that I might agree with it is your take that the answer is no. It doesn't affect us, the NDA…
Yes. I think I've heard you say in the past that you don't think the NDA has to get done for you to get done. So I didn't know if that was still your view. I don't want to assign your view to you, so I'll let you speak for yourself.
Yes. My view has not changed. Our view has not changed on that. We respect the NBA's product and what it means. And I think there's an entire marketplace out there for us. In terms of the strike, it's unfortunate. We continue to support our friends of the WGA and SAG. We're happy to read that the WGA and the studios are getting together, I believe, this Friday, and we hope for a quick resolution for everybody.
Our next question comes from Eric Handler with ROTH MKM.
Frank, maybe just an accounting question for you. It seems like in the income statement, the sponsorship revenue in the media line was probably a bit under what people were looking for relative to expectations. But in the Live Events business, you had record advertising and sponsorship. Was there some type of shift in recognition of where sponsorship dollars are going?
No, it really reflects -- there's no change in accounting. It just reflects the performance that we're getting, relatively higher performance for the PLEs and doing a great job of selling those, vis-a-vis the traditional sponsorship for -- that fell into media, but it's just a reflection of the business that we're doing and the strength that we're seeing on the selling of sponsorships related to the PLEs as Nick noted in his comments.
And then is there anything you could really say about -- in the 10-Q about the July 17th subpoena for Vince and what WWE's implications are from this?
We continue to fully cooperate with any investigation. Outside of that, we're not going to comment on any legal matter.
We'll move to our next question from Steven Cahall with Wells Fargo.
Maybe just to ask the rights question in a slightly different way. I understand why the timing is what it is between the US linear TV rights and the Peacock rights based on where you were with those prior TV deals and then the way that you transition the network to Peacock. It seems like that a lot of the digital buyers are taking a little more of an all or nothing approach. I know the NBA -- or the NFL is a little different than that. But I think the more and more we've seen new rights, it seems like some of the digital first companies are looking for these bigger blocks. So I'm just thinking about how you think about the potential of a one year extension on your linear rights in order to have a package deal that combines what's currently on Peacock with what's currently on linear to kind of create this bigger either all in your cross platform or all streaming assets? So that's the first one. And then, Frank, just a bit of a housekeeping one, but could you talk a little bit about how you're thinking about generating cash between now and either the end of Q3 or the deal close? I think you're still expecting to pay a cash dividend as that happens? And maybe you can just clear us up on the pro forma share count now that you've taken out the preferred as it relates to the dividend payment.
On the first part of that, I don't see a one year extension on the outcome for us. I don't think that's what the marketplace is suggesting. Also, keep in mind what you already know. Our content drives subscription behavior, not just viewership to 12 month calendar and [resist] subscriber churn. So of course, the digital players are going to be there. They see the results from Peacock with under 20 Live Events or so a year between the premium Live Events and NXT premium live events. So no, I don't see an extension like that in our future. And yes, we're talking to all of the digital content partners who I think, see the power in what we can do.
So on the cash flow share count question, of course, we are continuing to operate our business as usual and our objective is always to generate as much cash as quickly as we can and manage our cash position. The biggest variable -- one of the biggest variables in determining how much the dividend will be, of course, will be the actual date of closing and where we stand in our normal cycle of cash collections as of that point in the year. The share count, the cap table will be updated is in the S-4, it will be updated in the next version of the S-4, and we're tracking and we can give you some of the detail to help reconcile that at about total outstandings of about 83 million shares.
Our next question comes from Curry Baker with Guggenheim Securities.
Frank, maybe one for you. Could we drill down on the third quarter guidance? Any chance you can maybe size the license collectible impact and also, how much of the Fanatics part is related to timing? And then lastly, any chance you could also maybe help us drill down further on the impact of the third party programming and whether that's just timing?
The order of magnitude on the collectibles is around $6 million. The other thing that moved revenue and profit from second quarter out from third quarter to second quarter was the timing of the PLEs, and we can provide guidance on that later. But those are the major drivers. What was the last part of your question, Curry?
Just if there was any timing related to the Fanatics piece?
No, the Fanatics piece reflects -- it's more of an accounting change, performance of both the venue merchant, e-commerce business is strong. As we noted, it's more than it's not in the revenue and expenses, it's booked as a net item. We moved to the venue merch deal in May. So it's only partially reflected in the quarter. But it doesn't -- the bottom line, the net profit in those segments hasn't changed.
And then maybe one for Nick. Can you remind us when you expect to negotiate your top two international rights deals, the UK and India, and maybe any initial thoughts on how you feel like you're positioned in those markets?
Yes, I think we're positioned strongly in the UK and have had a number of in-persons there to further what we think is a robust market for us in the UK. India is two years out or so. So it would be premature, especially with the Sony India Zee merger awaiting final approval. It would be premature. As I mentioned, I believe in the last call, we have a live event in India in early September. We're excited about that. So India is excited about that. So too early to predict India but we're thrilled with our partnership with Sony.
Our next question comes from Peter Supino with Wolfe Research.
This question relates to your expectations for the timing and structure of your next US rights deal. I know it's not totally predictable, but we do have a point of view in the S-4 that the company published in Q2 for the TKO deal. And so I'm looking at the management projections and of course, they're disclaimed clearly as just a moment in time. I wondered if you could talk to us about the logic behind the EBITDA dollar growth in 2025 and 2026. It seems to accelerate in '26, but there's no sign of an impact from the renewal in the '24 and '25 EBITDA dollar growth projections. And so any color you could help would be great. We get this question from clients frequently.
Well, I'm not quite sure I follow, Peter, what you’re -- but the projections that we put out for stand-alone WWE were based on our planning models that we use to do our planning and reflected what we felt were was a reasonable expectation for both the renewal of the rights on SmackDown and Raw as well as the Peacock deal. So I'm not quite sure I follow where you see the disconnect.
Just to clarify that the EBITDA dollar growth in '24 over '23 and then '25 over '24 looks ordinary. And then in '26, the dollar growth rate doubles, $200 million of year-over-year growth in the forecast, and I'm trying to connect that to the idea of the US rights renewal in 2023.
We could follow up with you, Peter. But I think the answer is the full year effect of the US rights and the Peacock renewal or what's driving the difference, but you’re driving the jump up…
And keep in mind, Peter -- this is Nick speaking. Raw and SmackDown aren't up until October 1, 2024. And obviously, Peacock is March, I believe, of 2026. So I think Frank is correct in answering your question. And of course, we can dive deeper into it with you if you want more…
Yes, we'll go look at it and we can talk offline. But I believe that's what's driving the change in rate on those renewals. It's just the timing and the fact that the Peacock deal comes up in '26.
Our next question comes from Jason Bazinet with Citi.
I just had a question on the transaction close. I think most people think this is a pretty uncontroversial transaction, and you guys reiterated the timing, but it seems like you've given yourself a pretty wide berth second half of '23. So do you mind just walking through some of the…
Jason, I'm sorry, this is -- we can't hear you well. Can you maybe just speak up a little bit?
So I think most people on the Street think this transaction is uncontroversial. But you've given yourself a pretty wide berth in terms of closing in the second half of '23. So can you just walk through the things that could happen more quickly or the things that could happen more slowly that could cause the transaction to close later in the year versus earlier?
From day one, we predicted second half of this year. As you know, regulatory process is not the speediest of all processes but it's been a good one thus far. So I don't want to see that -- I don't want to suggest that it's easy, but it certainly hasn't been difficult yet. And we've given the information that we need to give, obviously, to get the approvals that we're seeking and we expect to stay on track with our predictions for the second half of this year for the close and ringing of the bell.
But if I can just ask one follow-up. There's nothing other than the customary regulatory approval and shareholder vote, there's no x factor in this transaction that we're unaware of?
That's correct, 100% correct.
Operator, why don't we take our last question please?
We'll take our last question from David Karnovsky with JPMorgan.
Nick, we've seen streamers potentially out in the market offering tiered pricing deals to leads or conferences. I'm wondering how you view the attractiveness of a structure like that? You did just stay prior that your content drives subscription behavior. And then a second question, just wanted to see if you could provide any incremental detail around your partnership with Twitch, how is that deal structured, is it mainly an ad share? And any incremental detail would be great.
So in reverse order, ad share deal with Twitch, we're excited about, it pays our superstars more than they would make if they just did it on their own Twitch show. So look for more investment into that property and more robust programming once our deal’s closed, which would be the right timing for that. In terms of the first part of the question, if you recall, when Peacock first launched, it was actually a three tiered service, free in front of the paywall and then $4.99 a month and $9.99 month on the ad-free. So we had programming mostly archival programming on the free platform and then again, consumers option for $4.99 with ads at the time or $9.99 without ads, and we liked how that worked. So our library, you're talking about over 100,000 hours of archival footage that people still watch on a regular basis, we think that's what -- part of that is what led to our YouTube growth in the infancy of YouTube. People still like to watch our library of stuff. You don't see that with other sports or entertainment properties, you're not watching the Grammys from 20 years ago, I don't believe many folks are watching the Super Bowl 20 years ago. We see around WrestleMania, a spike in viewership on prior WrestleMania. So we like the way that, that works, it allows people to sample our product. And then once enough people had sampled it, we went off the free platform. So we're looking at all of that and taking into consideration as we make these final decisions.
Well, thank you, everyone, for joining us on today's call. Operator, you can conclude the call, please.
This concludes today's call. Thank you again for your participation. You may now disconnect, and have a great day. .