TKO Group price target lowered to $126 at Guggenheim after SmackDown deal

Guggenheim analyst Curry Baker lowered the firm’s price target on TKO Group (TKO) to $126 from $130 and keeps a Buy rating on the shares after TKO announced this morning that WWE’s SmackDown would return to Comcast’s (CMCSA) USA Network beginning in October 2024 as part of a new five year deal. Press reports indicate that the new SmackDown deal is a step-up from the prior deal with Fox (FOXA) at about $1.45B over five years versus the prior $1B Fox deal, notes the analyst. Under the current contract Fox is paying about $100M per hour per year for SmackDown, compared to the about $88M per hour per year that NBCU pays for Raw, says the firm, which adds that it expects whichever network/platform lands the new Raw rights will pay “at least the new hourly rate as what was announced today for SmackDown,” or $145M per hour, as reflected in the firm’s updated model.