Netflix’s move to partner with TKO Holdings to bring in WWE Raw has been an early win — the company’s stock price closed at $492.19 per share on Tuesday, and is was trading over $555 per share at last check Wednesday.

The deal wasn’t the only reason for the stock surge as the company beat out revenue estimates and gained over 13 million subscribers during Q4 2023, but the stock surge shows it’s at least perceived to be a supplementary positive move.

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The 10-year, $5 billion move to air WWE Raw marks Netflix’s first real foray into live sports — and it explained during its earnings call why it chose the wrestling promotion.

“WWE Raw is sports entertainment, which is right in the sweet spot of our sports business, which is the drama of sport,” Netflix’s Co-Chief Executive Officer Ted Sarandos said.

“Entertainment” is the operative word in Sarandos’ statement. That’s the separating factor between the WWE — it’s known to be scripted in the way that other sports are not.

Sarandos stressed that Netflix is focused on “sports storytelling,” which is the heart of WWE’s product because it is a sports entertainment product. He claims that it’s for this reason that this move — despite being the first major live sports property that Netflix will stream — is still aligned to what Netflix has done in the past.

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“I would not look at this as a signal of any other change or any change to our sports strategy,” Sarandos said.

Netflix has had a great success with sports docuseries like “Formula 1: Drive to Survive” and “Quarterback,” and Sarandos cited the WWE as another move in the same direction.

“We could build that, as we have with Formula 1, and other sports like through our shoulder programming like Drive to Survive, like Full Swing, like Break Point, like Quarterback, like Tour de France,” Sarandos said. “With this great storytelling, the events itself are the storytelling of the WWE. So, this is a proven formula for us that we’re excited to jump into. You know, this is sports entertainment, very close to our core.”

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