UFC 170: Payout Perspective

February 24, 2014

Welcome to another edition of Payout Perspective.  This time we take a look at UFC 170 held at the Mandalay Bay Events Center in Las Vegas, Nevada.

Knee, not armbar, stops McMann

Ronda Rousey didn’t need her patented armbar to stop Sara McMann, but a knee to the liver downed the former Olympian.  While there may be some controversy about the stoppage, things were not going well for her.  Granted, she did mark up Rousey’s face.  Rousey did appear to be in dominant control after the knee.

Rousey will juggle movies and training as while it’s not clear who will be her next opponent will be and when that fight may happen.

Final_UFC_170_event_poster

Cormier makes short work of Cummins

There was sufficient hype for Patrick Cummins in short time to give folks the belief he could give Cormier a good fight.  In the end, Cormier was mad that he was hit twice by Cummins as the fight was a classic example of a mismatch.  Surprisingly, Cormier still put over Cummins in that he would still have an future in the UFC.

Cummins had a good enough story (walk-on to wrestling team at Penn St., working at coffee shop) that the UFC pushed which glossed over the fact that he was incarcerated for some time.

For Cormier, he should be close to a shot at the 205 title and may have one more fight in the division before he gets the shot.

Attendance and Gate

The attendance for the event was reported at 10,217 for a live gate of $1,558,870.  The announced gate was one of the lowest in Vegas for a PPV in several years.

Dana White was surprised by the gate as he proclaimed on Thursday that it would do $2.1 million.

The NSAC will have final numbers sometime later this week.

Bonuses

We previously reported, Ronda Rousey, Rory MacDonald, Demian Maia and Stephen Thompson received the $50,000 bonuses for the night.  MacDonald and Maia was the Fight of the Night and Rousey and Thompson received the Performance Bonuses.  As I stated, in the previous post, Erik Koch could have staked claim to one of the Performance Bonuses.

Salaries

The salaries were announced earlier than usual and are here.  Notably, Daniel Cormier had the biggest base salary ($80K and $80 to win).  Rousey earned $55K to show and $55 to win for a total of $110K.  She also earned the $50K performance bonus and thus earned $160K for the night – the same as Cormier.  Rory MacDonald was the third top earner of the night with $150K ($50K/$50K plus bonus).

Pre-UFC 170 Issues

Three newsworthy issues occurred in the run-up to this event.

The first was the Jessica Eye situation. Eye tested positive for marijuana after her October 2013 fight which caused her win to be changed to a no-contest. Instead of admitting this and showing contrition, she took to twitter to attack those reporting about her failed drug test.  Then she went on The MMA Hour to give a vague denial of the situation.  In fact, after her interview with Helwani, the Texas test results that she tested positive and waived her right to an appeal, she had some explaining to do.  To the UFC’s credit, it attempted to protect its contract fighter.

Via Fox Sports:

Eye was caught in a lie and there was no getting around it, but UFC president Dana White defended the fighter on Thursday saying that she honestly meant no harm in the matter.  White knows that Eye got caught up in not telling the truth in one interview, and then it just spiraled downhill from there and before you know it a snowball turned into an avalanche.

In the end, Eye should have received some media relations advice on addressing the situation and decide whether or not to appear on shows to discuss the situation.  Moreover, attacking press for a story that was for the most part factually correct is never a good idea.  The media relations and public relations part of the business is not as easy as it looks.

The second is the injury to Rashad Evans and the subsequent replacement of Patrick Cummins.  Cormier wanted a fight with someone since he had worked so hard to drop down to 205.  Cummins, according to the UFC, was the only one willing to take the fight on such short notice.  The UFC scrambled to create some buzz for the fight and did so with Cummins violating the unspoken rule of revealing that he made Cormier cry during training.  This created ample buzz as it made the fight a little more interesting since it drew the ire of Cormier.

The third was how the PPV was promoted regarding the Olympics resume of its main eventers.  The belief was that since the Winter Olympics were ongoing   The UFC commercial promoting the Olympians was a dubbed Mike Goldberg voiceover which stated that Rousey was the first woman to win a medal in Judo.  Of course, this could not be the case since Olympic medals have been awarded in women’s judo since the 1992 Summer Olympics.  As BE points out, she was the first American women to take home an Olympic judo bronze.

Goldberg’s voiceovers are always manipulated for PPV promos in order to promote what needs to be promoted.  Whether it was a willful omission or a blunder, the commercial was factually incorrect.  Whether this persuaded anyone to purchase the PPV or not is de minimus yet since this was identified by the press it puts the UFC marketing folks look like they dropped the ball.

Sponsorships

USA Judo was the notable new sponsor in the Octagon.  Obviously this was due in part to Rousey’s involvement.  In addition the usual UFC sponsors were in the Octagon including MetroPCS, Toyo Tires, Xyience, UltimatePoker.com, Harley Davidson and Bud Light.  Also, History Channel’s series “Vikings” had signage in the Octagon as well as EA’s UFC video game coming this spring.

Cage Fighter had a coming out party of sorts for its sponsorship of Daniel Cormier and Sara McMann in the top two fights of the night.  The “Rise and Grind” moniker which is associated with CF was somewhat misappropriated by Mike Goldberg during the PPV.

Cormier was wore an “Ultra Lube” hat which relates to industrial, agriculture, auto/truck, household and outdoor uses.

Training Mask, Dynamic Fastener, AutoShopper.com and PeopleFinder.com were prevalent sponsors on multiple fighters during the night.

Rousey wore a Muhammad Ali Roots of Fight t-shirt at the weigh-ins.  Dana White also said some nice things about the clothing brand in a tweet. It’s a good brand which features many notable fighters, boxers and martial artists from the past.

I actually purchased a Roots of Fights T-Shirt in Vegas.  Unfortunately, it came with a preset ink stain.  Ugh.

Odds and Ends

A lot of talk at the pre-fight media scrum on the state of sponsorships.

Was it planned for Rousey to down McMann in front of the USA Judo signage in the Octagon?

Were you offended by Marlon Wayans’ Tweets?  Comedians have no bounds so jokes like these are expected.  Or should they be?

The Rock sent out his support of Rousey:

Bigger first?  Daniel Cormier eating salad for the first time during training camp or Dwayne Wade eating fish for the first time during All-Star Weekend.

Cormier’s performance at the pre-fight press conference was great as he was articulate, introspective and funny.  The revelation that he never had a salad before this training camp was as shocking as White not knowing the attendance figures before they were announced.  His breakdown of why street fights don’t last long (built on emotion) was great as well.

After Cormier’s admission of his love for Popeye’s Chicken, the chain provided his family with a meal after his decisive win.  But, no sponsorship from the company?

If any fighter wants to brand themselves, they should check out Patrick Cummins’ web site.  It tells his story in a short span and he has a memorable t-shirt he sells on his site.  That is what I found when I did a google search on him.  I did not find out about his jail time until later.

The UFC actively promoted using twitter.  Reading tweets from the #UFC170 hashtag seems to be the newest thing to involve social media.

Stone Cold Steve Austin, CM Punk, Nick Diaz and Will Smith were notables attending the event.  Please no more CM Punk to MMA talk.

Conclusion

According to Google Trends, Ronda Rousey was the third hottest search on Saturday with over 100,000 searches.  She was behind Justin Timberlake at 2 and El Chapo Guzman at 1.  Does this equate to PPV buys?  It’s hard to say but UFC 170 will be a test on whether Ronda Rousey is truly the top draw for the company at this point.  The fact that the Cormier-Evans fight fell through did not help.  UFC 157 did a buy rate of around 500K and while UFC 168 did over 1 million buys this is partially due to the Silva-Wiedman rematch.  Based on the late buzz, we could see this event doing 400,000 PPV buys.

Bellator to air in Latin American market via Fox Sports

February 24, 2014

Bellator will be available in Latin America starting this Friday, February 28th via Fox Sports. The company was originally scheduled to begin airing in 2015, but a new agreement has it available this Friday.

Via Bellator press release:

Through this new agreement, FOX Sports has acquired the exclusive rights to broadcast all 2014 Bellator live MMA events in Latin America. The agreement also includes airing 2014 Bellator content in Brazil, with a combined distribution of more than 50 million households in the entire region. The original deal began in October of 2013 with FOX Sports airing Bellator specials and now beginning in 2014, fans of mixed martial arts will have access to more than 25 live Bellator events per year on FOX Sports.

“We couldn’t have been happier with this new alliance,” said Francisco Pazmiño, SVP Programming and Acquisitions FOX Sports Latin America, “We are extremely excited to start our partnership a year earlier than expected. The response in the region has been fantastic. Live Bellator MMA fights will certainly strengthen our FOX Combat brand positioning, by offering our viewers the most exciting MMA fights combined with other great combat content currently airing on our networks in the region”

Payout Perspective:

This is good news for Bellator as it will be a big week for the company with the start of its 10th Season.  You may recall that the partnership was to begin with Bellator’s first PPV on November 2nd last year.  The new agreement sets its footprint in the region and it will compete for space with the UFC there.

Melendez re-signs with UFC, gets TUF coaching spot and title shot

February 23, 2014

MMA Fighting reports that Gilbert Melendez will remain with the UFC as it has matched the contract offered by Bellator. In addition, Dana White announced that Melendez will be the next coach on TUF opposite Anthony Pettis with the two meeting for Pettis’ title.

Dana White made a subtle announcement via twitter attaching the UFC press release announcing Melendez’s re-signing and that he would be a coach on Season 20 of TUF opposite Pettis.  As you may recall, TUF 20 will feature the 115 pound strawweight women’s division.  The press release states the show will debut September 10th.

MMA Fighting identifies some key issues with Melendez’s new UFC contract:

Per the terms of the agreement, according to several sources, Melendez’s deal guarantees that at least 75 percent of the 31-year-old’s fights will be contested on pay-per-view moving forward. Additionally, income earned from Melendez’s contracted pay-per-view points will kick in at a lower minimum buy rate than for any contract in UFC history, meaning Melendez will still earn pay-per-view point earnings on an event that performs poorly at the box office.

Regardless of Melendez’s placement on the card, he will receive his PPV points.

While no terms of the deal have been released, the article indicates Melendez’s UFC contract will make him one of the highest paid fighters in MMA.

Payout Perspective:

Not only does Melendez get a very good PPV upside package, he ensures that most of his fights will be on PPV and he gets an immediate title shot while getting exposure on TV.

Although Bellator loses out on Melendez, it shows a newfound strategy in attempting to acquire top-notch UFC talent.  The UFC matched the offer which was likely much more beneficial for Melendez than whatever the last offer the UFC gave him before the Bellator signing.  This has to put the UFC on notice that it will no longer have as much negotiating leverage as it once had.

Based on the intriguing contract details revealed in the article, we might see more fighters seeking representation from more traditional sports and entertainment agencies.  It was clear that Dana White was not happy with Melendez’s reps which included Rodolphe Beaulieu (GSP’s agent) and CAA.  Still, they got the job done and the contract terms appear to be advantageous for Melendez since it’s one of the most lucrative in MMA.  Certainly the contract reveal will be taken notice by all others in the MMA business.

MMA Payout will have more as details develop.

UFC 170 Post Fight Scrum – Gate and attendance in question

February 23, 2014

After UFC 170 concluded, UFC President Dana White held a post fight scrum where he briefly fielded questions from the MMA media, which included the gate discrepancy, performance bonuses, Cyborg, Cormier, Will Smith, and Rousey’s stardom.

Link: MMA Fight Corner

 

Payout Perspective:

One odd observation from the post fight scrum is the media asking Dana White about the UFC 170 gate and attendance.  Earlier in the week, Dana White stated that the gate for UFC 170 would be around $2M dollars.  During the post fight press conference, the attendance and gate was announced as 10,217 for a live gate of $1,558,870. White stated “Are you f*cking sh*tting me? It’s $1.5M?”  He did not know why there was a discrepancy but stated that it was a good question. Later in the video, he stated that this was still a good gate and said it was “a quarter of a million” more than her debut.  As a note, UFC 157: Rousey vs Carmouche at the Honda Center in Anaheim, California officially drew 13,257 in attendance for a $1,350,191 live gate.

As for comparison, UFC 157: Aldo vs Edgar in the same Mandalay Bay venue in Las Vegas drew 10,275 for a gate of $2.34 million, though it is notable that the ticket prices for this event were scaled back, which may explain the lower gate.  There is also an expectation of a high number of complimentary tickets, as MMAPayout expected yesterday.

UFC 170 attendance, gate, bonuses and salaries

February 22, 2014

MMA Junkie reports the attendance, gate, bonuses and salaries from UFC 170.  In the main event, Ronda Rousey stopped Sara McMann with a knee to the liver in the first round.

The attendance at the Mandalay Bay was reported at 10,217 for a live gate of $1,558,870.  In his media scrum on Thursday, Dana White indicated that the event would do a $2 million gate (around 19:15 mark).  The numbers were announced at the post-fight press conference and official numbers will be released by the Nevada State Athletic Commission next week.

As for the bonuses, which were $50,000 each:

Fight of the Night:  Rory MacDonald-Demian Maia

Performances of the Night:  Ronda Rousey, Stephen Thompson

No complaints here although Erik Koch could have earned a PON bonus.

In addition, the Nevada State Athletic Commission released the salaries for the event which reveals Daniel Cormier and Ronda Rousey topped the roster which had a total payroll of $843,000.

Via MMA Junkie:

Champ Ronda Rousey: $110,000 (includes $55,000 win bonus)
def. Sara McMann: $16,000

Daniel Cormier: $160,000 (includes $80,000 win bonus)
def. Patrick Cummins: $8,000

Rory MacDonald: $100,000 (includes $50,000 win bonus)
def. Demian Maia: $64,000

Mike Pyle: $96,000 (includes $48,000 win bonus)
def. T.J. Waldburger: $18,000

Stephen Thompson: $28,000 (includes $14,000 win bonus)
def. Robert Whittaker: $15,000

Alexis Davis: $30,000 (includes $15,000 win bonus)
def. Jessica Eye: $8,000

Raphael Assuncao: $56,000 (includes $28,000 win bonus)
def. Pedro Munhoz: $8,000

Aljamain Sterling: $16,000 (includes $8,000 win bonus)
def. Cody Gibson: $8,000

Zach Makovsky: $24,000 (includes $12,000 win bonus)
def. Josh Sampo: $10,000

Erik Koch: $30,000 (includes $15,000 win bonus)
def. Rafaello Oliveira: $14,000

Ernest Chavez: $16,000 (includes $8,000 win bonus)
def. Yosdenis Cedeno: $8,000

Payout Perspective:

As we reported earlier today, the demand for tickets for low thus despite the proclamation by White on Thursday that it would do $2.1 million was more hope than fact.  The last time a UFC PPV held an event at the Mandalay Bay, it was for UFC 156: Aldo-Edgar, which received 10,275 for a gate of $2.34 million.  So, while the attendance was about the same, it appears that Saturday utilized more comps than UFC 156.  We will learn more when the official numbers are released by the NSAC.  Rousey ends up tied with Daniel Cormier for highest reported earner of the night as she also received a $50K bonus in addition to her show/win purse.  Patrick Cummins received $8K for filling in late.

MMA Payout will have more on UFC 170 in its Payout Perspective.  Stay tuned.

Ronda Rousey’s Impact on UFC 170

February 22, 2014

UFC 170 was supposed to feature Ronda Rousey versus Sara McMann, Rashad Evans versus Daniel Cormier, and Gilbert Melendez versus Khabib Nurmagomedov. Three really great fights many fans were looking forward to since the announcement was made during the UFC 168 post-fight press conference. A lot has changed since then.

ufc-170-poster-Melendez

About a month after the announcement, we started to get some displeasure between the UFC and Melendez about signing a new contract.  The UFC quickly mentioned that Melendez vs Nurmagomedov was never official despite being on the UFC 170 poster.  Considering that Melendez eventually signed with Bellator and is now waiting to see if the UFC will match their offer, we now know what happened with that bout.  Just a few weeks later, Rashad Evans abruptly announced that he was being pulled out of his fight against Cormier due to a leg injury with only two weeks left until the event. That announcement created a mad scramble for the UFC to find an opponent for Cormier, which led to booking unknown Pat Cummins in the co-main event against Cormier.  That left us with only one fight in tact since the original announcement, Rousey vs McMann.

It’s rare to see someone with only two UFC fights being put in the position that Ronda Rousey is in for UFC 170, but considering the huge success of UFC 168, it left the UFC with no other options.  Rousey was always going to be the mainstream attraction for UFC 170.  But after Melendez and Evans pulled out of the card, there is no denying that the success of the event will be solely on Rousey’s shoulders, which is even more daunting considering the short turn-round and the lack of time to promote the event as UFC 168 and UFC 157 had. UFC 168 had 500K+ Google Hot Searches though it ended up with 2M+ due to Anderson Silva’s gruesome leg break. Rousey’s UFC debut for UFC 157 ended up with 200K+ searches, which is a better comparable than UFC 168. As the UFC 170 event begins, Ronda Rousey already has 100K+ searches without any other UFC search in near sight. UFC 169 only had 100K+ total searches for the event, which is a remarkable comparison.

With that being said, UFC 157 did an estimated 450,000 PPV buys with a ton of casual media attention as the UFC heavily promoted the debut of women in the promotion.  UFC 170 won’t have that benefit, but it does have the momentum UFC 168 created with MMA and casual fans.  If you look at the numbers and the lack of stars on the UFC 170 card, anything above 400,000 buys would have to see as a major win for the UFC and would make Rousey one of it’s biggest draws.  300,000 – 400,000 would be deemed acceptable and anything below 300,000 would be considered a disappointment.

With Rousey already having a couple of movies lined up in 2014, the UFC is trying to get the most out of their newest main-stream star by declaring a few days ago that they are planning to have her fight three times this year in addition to her movie responsibilities, which would be an incredible feat without burning out.  With the recent talk of Cyborg dropping Tito Ortiz as her manager, potentially dropping to 135 lbs and possibly facing Rousey this year, it would likely be the UFC’s biggest fight in 2014 when you consider the loss of Georges St. Pierre (on leave/retired) and Anderson Silva (broken leg/39 years old), two of their biggest stars and PPV draws.

UFC 170 pre-fight presser scrum focuses on fighter pay & sponsorships

February 22, 2014

UFC President Dana White discussed several topics during the UFC 170 pre-fight presser scrum, notably an update on the current status of Gilbert Melendez and recent fighter complains about fighter pay and sponsorships.

 

“It’s not my f— problem,” White told Iole and the media. “Getting sponsorship is a problem. It’s tough. It’s hard to do. That question is ridiculous. If a guy fights on Fight Pass, first of all, he’s getting paid to fight. That’s what he’s getting paid for. That’s what he does. How sponsorship works out for a guy is not my problem. That is not my problem. He’s a fighter, he gets paid to fight, period, end of story. Whatever extra money he makes outside of the UFC with sponsors and all that s—, that’s his f— deal.”

Link: MMAFighting.com

 

Payout Perspective:

Dana White came under a lot of heat during the scrum, specifically on the topics of fighter pay and sponsorships.  During the scrum, White’s insistence that fighters sponsorship money was not his problem troubled a number of fighters and media members.  MMAFighting’s Luke Thomas solid piece in response to White’s tirade titled “Actually, fighter sponsorships are the UFC’s problem” hit the nail on the head.  The UFC is now saying that this is not their problem now, but they have previously trumpeted fighter sponsorship as a rebuttal for fighters not getting paid enough.  They have also created an environment for fighters which makes it very difficult for sponsors to jump on board after paying a sponsor fee and determining how many viewers their brand will actually reach.

At a time when UFC has broken into a certain level of mainstream in the US after monumental TV deals with FOX, Globo, and other major sponsors, fighters are finding it now harder than ever to find sponsors.  As the article points out, there are many contributing factors that led to the current situation, but nearly all were self-inflicted by the UFC.  Specifically, the creation of the sponsor tax  and the banning of multiple lower-end sponsors have really hurt a large percentage of lower end fighters. In addition to the restrictions placed on the fighter-sponsor relationship, the UFC has continued to place it’s product on media platforms that have continued to drop in viewership and exposure throughout the years, such as the move from Spike TV, to FX & Fuel TV, to now FS1, FS2, and Fight Pass.

One of the biggest concerns right now for fighters is being placed on a Fight Pass card, which typically takes place out of the country with a limited stream viewership.  MMAJunkie’s Steve Morocco got a glimpse of what a fighter has to consider now when taking a fight as he spoke to UFC fighter Zach Makovsky.

“They were like, ‘You can turn it down and we can get you on later, but that could be on a card on Fight Pass in Brazil, against a Brazilian,’” Makovsky said. Such a booking would have brought a hit to his pocket book in the form of flying his coaches to the fight and selling sponsors on the still-developing digital network. “I think this was the best scenario,” Makovsky said. “I always wanted to fight in Vegas.”

There is no denying that the UFC is looking towards the future with the sponsorship tax fee, the rumored uniform, and the the Fight Pass digital network.  It does not appear that they were quite ready yet to make this transition as they are cutting the bottom half assuming that they will reap from the top, which does not appear to be the case yet. It may also not be the case 5 years from now and may take longer than they have anticipated, but they must workout some type of agreement with the fighters before the benefits of becoming an MMA fighter start to appear less and less beneficial for the lower end fighters.

Demand appears low for UFC 170 tickets

February 22, 2014

MMA Payout has an update on tickets for UFC 170.  While Ronda Rousey is an expected draw based on her last two UFC outings, the ticket demands for the event appear low.

Dana White said at his media scrum (19:14 mark) Thursday that the event would do a $2 million gate.  However, there are still quite a few tickets in the lower and upper levels left as of early Saturday morning for the event according to Ticketmaster.

Final_UFC_170_event_poster

Ticket prices were set lower than previous Vegas PPVs, which were held at the MGM Grand Garden Arena.  Saturday’s event will be held in the smaller Mandalay Bay Events Center.

The last event at the Mandalay Bay was the TUF 17 Finale from April 2013.  That event drew slightly under 6,000 fans for $569,075.  The last PPV at the Mandalay Bay was UFC 156: Aldo-Edgar, which drew 10,275 for a gate of $2.437 million.

A week prior to this event 6,400 tickets had been sold.

According to Seat Geek, the average ticket price on the secondary market is $203.  According to the ticket search engine company, only 10 fights in the last 40 going back to UFC 131 have drawn lower average ticket prices on the secondary market.

Seat Geek also had the following information:

–          Comparing the prior secondary ticket marketplace for Rousey, the average ticket price for UFC 168 was $536.  Of course, that fight was against hated rival Miesha Tate and the ticket resale market was also aided by Weidman-Silva II.  For McMann, her last fight at UFC 159 against Sheila Gaff went for an average of $276.  The headline for that event was Sonnen-Jones.

–          Tickets in the upper-level start at $81 on the secondary market although some have been able to get them for as low as $50, which was the lowest face value for entry in this event.  Lower-level tickets are available for $145 and up, and ringside seats are going for no less than $511 per ticket. At the high end, Seat Geek says there are some front-row ringside seats change hands for $1,700+ apiece.

More info on UFC seating from Seat Geek can be found here.

Payout Perspective:

We will see what the final announced attendance and gate will be for UFC 170 but from what it appears, UFC 170 ticket sales have been sluggish despite White’s claim that the event will garner a $2 million gate.  With the last minute injury in the co-main event, making Daniel Cormier fight a relative unknown, there are few other fights of note on this card.

TUF Nations Episode 6 nets just 78,000 viewers

February 20, 2014

The MMA Report reports the ratings for this week’s TUF Nations which aired on FS2.  TUF Nations, Episode 6 received only 78,000 total viewers which is the second time it has been on FS2.

TUF Nations: Australia vs. Canada

Episode 1:  371,000 viewers

Episode 2:  253,000 viewers

Episode 3:  107,000 viewers

Episode 4:  384,000 viewers

Episode 5: 187,000 viewers

Episode 6: 78,000 viewers

Payout Perspective:

A combination of live sports including the Winter Olympics, the NBA on ESPN and the fact that TUF Nations was switched to the less visible Fox Sports 2 is likely reasons for the lowest rating of this season.  The second lowest rating this season, also occurred on FS2 when Episode 3 received only 107,000 viewers.

WWE announces earnings for Q4

February 20, 2014

The WWE announced its fourth quarter earnings on Thursday and despite not beating loss per share estimates, its stock reached a 52 week high during the day. In addition, Vince McMahon spoke about the CM Punk situation.

As it relates to Punk, when asked about his abrupt departure from the WWE, McMahon indicated that he was on a “sabbatical” and left it at that without further follow up.  Without going further and/or causing a SEC investigation on the matter, McMahon left the door open for future work with Phil Brooks.  Regardless of the rumors of Punk released from the company, McMahon believes that its likely Brooks will return.  Certainly, how professional wrestling is, returning to the ring is always a possibility.

As for the financials, the WWE loss per share was at $0.10 per share.  Analyst estimates had the company’s losses per share for the fourth quarter of 2013 at $0.05 per share.

WWE’s total revenue for Q4 2013 was $118.4 million and it had a net lost $7.9 million.  In comparison, Q4 2012 saw it take in $115.1 million in total revenue which earned a $0.6 million profit.  The much-anticipated WWE Network costs, weak DVD sales (likely due indirectly by the Network) and “compressed television production margins” as stated in the WWE press release were the reasons for the losses this year.

Some other notes:

The company also released information for the full year 2013.  Last year, WWE made a $2.8 million profit with revenues at $508 million.  2012 saw $31.4 million in profits with $484 million in revenue.

PPV revenue increased during the Q4 due to having one more PPV in the quarter.  It earned $15.7 million for the quarter.

The WWE’s consumer products business decreased 31% to $14.1 million due to “declines in the Company’s home entertainment business and toy licensing.”  Although licensing revenues declined, domestic retail toy sales increased in 2013.   It also indicated that “construction toys” have demonstrated strong growth.  We may see more of this with its recent renewed agreement with Mattel.

The WWE’s movie division showed a $5 million revenue increase over 2012 but this was mainly due to timing of the release of the movies in 2012.

WWE stock was up 7.5% to $24.74 at the close of trading on Thursday.

Payout Take:

The overall takeaway from the numbers is that the WWE has spent a lot of money on the WWE Network.  One need only compare the revenues vs. profits in 2012 versus 2013 to know a bulk of the revenues is being reinvested into the Network. The WWE has already projected a $12M to $15M loss for this year’s first quarter due to the costs to launch the Network.  The good news is that most of its key areas are experiencing growth and while there may be some concern with its consumer products division, the recent Mattel deal should help with sluggish sales.  But of course, the big news is the bullish feeling analysts have about the potential rights fees deal the WWE is set to sign.

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