February 25, 2015
The WWE celebrated the one year anniversary of its network on Tuesday by allowing all free access to its network. Variety also posted an article summarizing what the company learned with its over the top network.
Its clear that the Network is inextricably tied with the company’s future financial performance as it is stated in the WWE’s latest earnings report that the company’s future financial performance is dependent on subscription adoption of the WWE Network.
The company surprised analysts by besting Wall Street expectations for the fourth quarter and all of 2014. While the company has incurred a net lost due primarily to the large investment in the network, it has not been as heavy as previously predicted.
As it reported in January, the network surpassed 1 million subscribers and is picking up more viewers as it rolls out in more foreign companies. It has also done well with its promotions for the network including a free November and allowing subscribers to pay mont-to-month rather than establish a 6 month commitment as it was originally rolled out.
Variety cited 4 lessons the WWE has learned since its launch last February. Among the lessons it indicated the “balancing act” the company had with its “direct-to-consumer” initiative while maintaining its partnerships for distribution. Essentially, this means keeping the people paying for its television rights fees happy as while as having amicable relations with the cable and satellite company. The latter being a harder balance considering the company has cut into PPV revenues. It also may have angered companies by playing most of the Royal Rumble last month during an episode of Raw due to the live event cancellation as a result of snow.
The WWE Network has had measured success despite criticism about the product. It may have not met its lofty expectations of subscribers yet but one may have to wait to see how it fares with international distribution. For its part, the WWE has been willing to make changes on the fly to the network (i.e. Free November, month-to-month payment, content, convenient options for viewer usage, etc.) It was a bold move for the WWE to take this step to create the network and the early adopters have spoken. In year 2, we will see if more subscribers add on, or if the Network will face more hurdles for subscribers and retention.
February 21, 2015
MMA Fighting reports that UFC fighter CM Punk and indy wrestler Colt Cabana are being sued by a WWE doctor for defamation among other claims resulting from Punk’s comments on Cabana’s “Art of Wrestling” podcast last year.
The lawsuit filed in Cook County Circuit Court (IL) by WWE doctor Christopher M. Amann accuses the former WWE wrestlers (Cabana had a brief stint with the company) of making defamatory statements regarding his professional duties as a medical doctor for the company.
In support of Dr. Amann, the WWE has released a statement and video which refutes Punk’s story told on Cabana’s podcast that he had a MRSA staph infection on his back and Dr. Amann misdiagnosed it. Punk also indicated that the doctor did not treat him for a concussion.
Cabana was sued as Dr. Amann claims that he “helped Brooks falsely depict Amann as lazy and a bad doctor per the Cook County Record.
When I first heard the much heralded podcast where Punk aired out the WWE, I wondered about whether there would be any response by the WWE on the comments made by Punk on how his injuries were addressed. It appears that the lawsuit is the response. Certainly a physician filing a defamation claim against what was essentially a patient are unusual. One might think that Punk may now bring a counterclaim alleging medical malpractice based on his side of the story from Cabana’s podcast. Then again, the WWE statement (via the Wrestling Observer) includes a claim that there are no medical records documenting Punk’s condition and that Punk did not communicate his condition (i.e., lump on back) with the WWE’s doctors.
The news of Punk’s health will be interesting when he applies for a license to fight. We will see if this lawsuit brings up additional information since it is an issue in this lawsuit. Punk is at an “advanced age” for a first-time MMA fighter and one would think an athletic commission would look more closely at his health history when issuing him a license.
But, the Punk-WWE legal issues look to continue.
February 20, 2015
Cassandra Frazier widow of the late WWE wrestler Nelson Lee Frazier (aka Mabel, Viscera, Big Daddy, V, King Mabel) has sued the WWE in a wrongful death lawsuit filed in the Circuit Court of Shelby County, Tennessee.
The 124 page claims that Frazier suffered multiple head injuries/concussions while he wrestled with the WWE. The Complaint claims negligence, negligent misrepresentation, intentional misrepresentation and loss of consortium, a personal injury to Ms. Frazier among other claims asserted in the Complaint.
Frazier, who weighed near 500 pounds while wrestling for the WWE, died of a heart attack on February 18, 2014 at the age of 43. Perhaps in honor of the anniversary of his death, the lawsuit was filed February 18, 2015.
The Complaint includes a timeline of events in which Frazier suffered injuries while working for the WWE. It also includes a list of nearly 40 WWE wrestlers (photos of each included) that have passed due to issues related to head trauma. Notably, the lawsuit includes some information revealed by CM Punk and Colt Cabana on Cabana’s infamous podcast last year.
Ms. Frazier claimed her husband suffered concussion symptoms, CTE, disfiguring scar tissue, head trauma
The WWE released a statement with respect to the lawsuit by Frazier (via Wrestling Observer):
“WWE has not been served with a lawsuit by Cassandra Frazier. If served, we will vigorously contest this lawsuit brought by the same lawyers who have been soliciting people to sue WWE without merit.”
This is the third lawsuit in less than a year against the WWE which relates to the issue of head injury/concussions that may have caused injury to former performers. “Billy Jack” Haynes filed a lawsuit he had hoped would gain class action status in Oregon and Vito LoGrasso and Evan Singleton in Philadelphia. As you can tell from the WWE’s initial statement, it is shifting the focus to the fact that we have “ambulance chasing” lawyers and not true claims. The lawsuit has been filed by one of the lawyers that filed suit in the LoGrasso and Singleton case. Hence, the statement by the WWE. The Complaint includes information revealed by CM Punk on Colt Cabana’s podcast about the WWE medical policy. The veracity of the statements made on the podcast are in question as a WWE doctor has filed a defamation lawsuit against Punk and Cabana.
MMA Payout will keep you posted.
February 13, 2015
WWE Earnings for the 4th quarter of 2014 exceeded company expectations as it increased 19% to $140.5 million from the fourth quarter of 203. WWE announced the results during a conference call on Thursday. The company stock is up over 7% at close of trading on Thursday.
During the 4th quarter (October-December 2014), the WWE Network added 85,000 subscribers which reached 816,000 by the end of 2014. The “free” November promotion was credited with adding 242,000 trial subscribers. It appears that the WWE seeks to replicate this strategy with a free February for new subscribers. In January 2015, the network indicated it had exceeded 1 million subscribers.
On the conference call, WWE CFO George Barrios stated that the network reached 1.4 million unique subscribers as of the January 27th “1 million subscriber announcement” with 71% of the subscribers’ active at that date.
The U.S. version of the WWE Network was made available in more than 170 countries and territories in August 2014 and had approximately 44,000 international subscribers. Barrios indicated that he hoped the network would be available in all of Canada by Wrestlemania this year. The WWE also announced a deal for the Network with OSN in the Middle East and North Africa.
Overall, in 2014, the Network revenues reached $115 million which reflected an almost “break even OIBDA for the year” according to Barrios. The WWE’s adjusted OIBDA (Operating Income Before Depreciation and Amortization) for the Network was $5.1 million.
Vince McMahon noted that its social media reached over 454 million followers as of the end of January and that its YouTube content reached over 3.9 billion which put it as the number one sports channel on the platform overtaking the NBA.
One of the interesting things coming out of the conference call was the question about whether the outrage over the outcome of the Royal Rumble was a concern. Essentially, WWE fans angered that Roman Reigns won the Rumble started a #cancelwwenetwork twitter hashtag. McMahon stated that the controversy was good for the WWE. More importantly, it did not result in substantial losses in subscribers.
There was a question by an analyst about whether the WWE could compare and contrast its fan base with that of MMA. Barrios indicated that the WWE is “multi-generational family viewing.” The inference is that MMA is for a different demo, namely the young adult demographic. Thus, the WWE has a broader audience.
Other tidbits worth noting:
- WWE Network advertising revenues in the quarter were not substantial.
- WrestleMania, the company’s biggest event, will continue to be carried by satellite and cable providers despite also being carried on the Network. Barrios stated that the pricing is set by the cable operators.
- When asked about subscription “churn” post-WrestleMania, Barrios indicated that it would provide “great content” and indicated that there would be “a lot of new content” which the WWE intends to combat the possibility of subscribers dropping the Network after WrestleMania.
One note to mention about the Network is the success the company had with the strategy of “sampling.”. The company attributes some of the additional subscribers to the “free” November. The WWE hopes that it will happen again with a “free” February. The Network may still be behind the projections but it is catching on and will gain more subscribers as it expands globally.
It is interesting that WrestleMania will still be available on the Network for $10 (per month) while satellite and cable operators will likely charge $60 for it.
January 27, 2015
The WWE announced that its WWE Network has surpassed 1 million subscribers in just 11 months. Despite early concerns about retaining subscribers, the company has hit a significant benchmark with its digital platform.
The announcement comes a week ahead of its 4th Quarter earnings for 2014. The increase in its subscribers is a dramatic turn from its 3rd Quarter announcement of 731,000 viewers. The WWE offered a free November for potential subscribers to have a chance to check it out. It appears that this promotion, the appearance of “The Rock” and others at the Royal Rumble as well as launching the network in the U.K. and Ireland have helped boost the subscription number.
The results reflect a 37% increase globally and 24% domestically. Despite the buzz that people were going to cancel the network en masse due to the Royal Rumble result, the show actually reflected positive gains.
WWE stock is up 20% on Tuesday at the time of this writing.
Great news for the WWE Network as it is near the 1.4 million subscriber number which would put the WWE investment in the platform at break even. It is behind its projected 1.25 million subscriber number per Dave Meltzer. Yet, with the rumor that it will once again offer a free February and with “Wrestlemania Season” upon us, the subscription number should remain solid for now. The 1 million subscribers could be attributed to the “Free November” which was interesting considering the content during that month was not astounding. MMA Payout will keep you posted on the earnings report next week.
January 20, 2015
Two former WWE wrestlers have sued the company in Federal Court in Philadelphia claiming they suffer from serious brain injuries as a result of “repeated concussions” in the ring. The lawsuit is said to be similar to the one filed by “Billy Jack” Haynes in Oregon.
Vito “Big Vito” LoGrasso and Evan “Adam Mercer” Singleton are the plaintiffs. The lawsuit seeks class action status and accuses the WWE of “selling violence” and turning a blind eye to the health of its wrestlers including “ignoring” concussions suffered by the plaintiffs.
LoGrasso wrestled for the WWE from 1991 to 1998 and from 2005 to 2006. He claims to suffer from “serious neurological damage.” Singleton wrestled for WWE from 2012 to 2013 and was one of the youngest wresters in WWE history at 19. He also claims to have “an array of serious symptoms” as a result of his time in the WWE.
The WWE’s attorney, Jerry McDevitt, claims that the company has “never concealed any medical information related to concussions, or others.”
The lawsuit seeks unspecified economic damages and medical monitoring.
LoGrasso is now 50 years old and Singleton is only 22.
It will be interesting to see if this lawsuit will be tied with the Haynes lawsuit. One of the law firms involved in the LoGrasso/Singleton lawsuit may be involved with the Haynes litigation as well. The WWE will file its response to the Haynes lawsuit shortly. LoGrasso’s stint in the WWE should help with the claims as both Haynes and Singleton had shorter stints with the company. These lawsuits appear to be patterned after the NFL concussion lawsuits. We will see if more wrestlers join the litigation which may evolve into a class action. If that is the case, it could spell big trouble for the WWE.
MMA Payout will keep you posted.
January 9, 2015
In the second half of its third season, WWE Total Divas drew a season high rating average of 1.41 million viewers according to Television By Numbers. The WWE reality show on the E! network received help from the Kardashians.
Total Divas drew a 0.7 rating while it was aided by lead-in Kourtney & Khloe Take the Hamptons which drew 1.836 million viewers and a 0.9 rating. It was the season finale for the Kardashian show. The show which is morphing into its own reality to the annoyance of some WWE fans is building its own audience in addition to WWE followers.
Payout Take: Total Divas did not lose a lot of audience from the Kardashians which is an actual positive sign. Notably, the Kardashian replay which took place after Total Divas drew 806,000 viewers for a 0.4 rating.
January 6, 2015
2014 was supposed to be a big year for the WWE. With the launch of its network and its media rights fees up for grabs, the company stock skyrocketed on speculation that the company would become an instant revenue-generating machine. The stock went as high as $31.39 in March but fell to $10.85 just two months later due to market realities.
WWE Network Launches
In February, the WWE launched it’s over the top network which came with much anticipation and fanfare. Despite technological issues from launch, people were still bullish on the network. But the momentum came to a halt with the reveal of the first subscriber numbers. With a target of gaining 1 million subscribers by the end of 2014, the WWE officially reported just slightly over 667,000 at the end of the second quarter. It then just grew to 731,000 viewers at the end of the third quarter.
The WWE initially offered the network for $9.99 with a 6 month commitment. It’s key selling point from the start was that those who signed up would receive Wrestlemania for just $9.999 instead of the traditional price point of $60-$70.
After sluggish numbers, it allowed a free month preview in November. It also eliminated the 6 month commitment so that no one would be latched on by a 6 month commitment.
It was known that the WWE would lose money this year due to starting the network and essentially losing its PPV business. But, it appears at this point it overestimated the subscriber interest in the network. With the rollout of the network in other countries, the WWE hopes that its subscribers will grow as well.
Wrestlemania still an economic boon
Wrestlemania XXX in New Orleans generated an economic impact for the region of $142.2 million which is a record for Wrestlemanias and the third straight year it has generated over $100 million in positive economic impact for its host city. With Wrestlemania available on the WWE Network and on PPV, the total amount of viewers exceeded 1 million.
WWE renews rights with NBCU
In May, the WWE renewed its media rights with NBC Universal. Immediately after the announcement, stock shares dropped which would indicate that the deal was not near what investors had wished. The initial hope was to double its prior deal of $140,000 to $280,000. However, this did not happen. Low advertising rates and the negative perception of its programming likely held back the WWE’s hopes for a NASCAR or MLS-like deal.
Ring of Honor on PPV
In June, wrestling promotion Ring of Honor tried its hand at traditional PPV. It was a way for ROH’s parent company, Sinclair Broadcasting, to see where it could take the company. Dave Meltzer of The Wrestling Observer reported 10,000 buys which was the break even mark for the company. In comparison, kickboxing organization, Glory only had 6,000 PPV buys for its PPV held the same weekend in June.
TNA Wrestling leaves SpikeTV
In July, TMZ Sports broke the news that Spike TV was not renewing Impact Wrestling for 2015. Despite initial reports that the sides were still negotiating an extension, it was confirmed that 2014 would be the end of the road for the 2 hour show on the network. In November, TNA announced it had signed a pact with Discovery Communications for its show to air on Destination America starting Friday, January 16th. Coincidentally, it is the same night that New Japan Wrestling premieres on AXS TV.
Lucha Underground debuts on El Rey
A new lucha libre, telenovela-style show backed by Mark Burnett (of Survivor and The Apprentice fame) debuted in October. The show was made available in English and Spanish. It has received rave reviews although the ratings have not mirrored the praise. It is a different type of show which infuses drama and action.
Former wrestler sues WWE in first concussion lawsuit
In October, former WWE wrestler Billy Jack Haynes sued the WWE claiming that the company knew of the inherent risks its wrestlers took when it allowed them to perform stunts which included taking shots to the head causing head injuries. Haynes and his attorneys are seeking class action status. The lawsuit, filed in the federal district court of Oregon, is ongoing and the WWE lawyers have requested an extension of time to answer the Complaint.
New Japan Pro Wrestling
The Japanese wrestling promotion will make its way to American television in January 2015 as it will appear on AXS TV starting Friday, January 16th. 13 episodes will run on the network and will have the broadcast team of Mauro Ranallo and Josh Barnett dubbing in the commentary.
In following in the footsteps of the WWE, New Japan unveiled its own over the top streaming network for 999 yen or $8.40 U.S. Wrestling fans may start to see more of New Japan in 2015.
December 9, 2014
Welcome to another edition of Payout Perspective. This time we take a look at UFC 181 which took place at the Mandaly Bay Events Center in Las Vegas, Nevada
CM Punk signs with UFC
Usually we start off with the main events, and there were two very good ones, but the big news coming out of the PPV was the announcement that Phil Brooks (the artist formerly known as CM Punk – the WWE owns the trademark and we’re not sure if terms of his settlement included continued use of the name) has signed with the UFC. Brooks is 36 and has no formal experience in MMA unless you count his training in BJJ and Kempo. Recently, Brooks talked about a variety of health issues he had while in the WWE as well as the indication he has had a lot of concussions (12 or 13 per the Cabana podcast). The concussions do not even count the ones that were not medically recorded. We will definitely talk about this more but as it relates to business, this is a calculated risk for the UFC. It should bolster a UFC for the sheer curiosity from former WWE fans.
Lawler edges Hendricks for UFC title
Robbie Lawler started and finished the second fight with Johny Hendricks in a flurry. And it might have been the last flurry in the end that solidified the win for Lawler. Maybe Hendricks fell into the same trap of confidence as he did when it appeared that he had defeated GSP. Hendricks had turtled up in at least two rounds allowing Lawler to seemingly pound away at him. Even if the blows did not hurt, the appearance made it seem that Lawler had the advantage. In the end, Matt Hughes had the opportunity to put on the belt for the new champion.
Although a third fight would make sense, Rory MacDonald was in attendance and should be the next in line to challenge for the belt.
Showtime crisp in title defense
Anthony Pettis is good. That’s an understatement. Despite a shaky first round against Gilbert Melendez, Pettis took advantage of a shot from Gil and quickly secured a guillotine. He’s now subbed Benson Henderson and Gilbert Melendez with ease. It’s clear that Pettis is the tops of this division. Pettis is athletic and quick and if he avoids significant injuries (wrote this before news of his hand), he can be a force in the UFC.
Up next for Pettis should be Khabib Nurmogomedov who showed up at the press conference to ensure Showtime knew who he was.
Attendance and gate
MMA Junkie reports the attendance and gate at the Mandalay Bay Events Center in Las Vegas. The attendance announced post-event was 9,617 for a gate of $2.488 million. The last event at the Mandalay Bay was UFC 170 in February 2014 for Ronda Rousey-Sara McMann. That event drew 10, 217 for a gate of $1,555,870.
Promotion for the Fight
UFC Embedded was the main driver once again and offered some good background on Hendricks-Lawler and Pettis- Gil. It also covered the Pettis Wheaties box cover announcement and the Reebok uniform announcement. Hendricks’ sponsor, Bass Pro Shops, received some exposure as Johny was seen shopping for a rifle at the outdoor sporting goods store.
The UFC released Hendricks-Lawler I online which one must consider was one of the best fights of the year.
UFC 181 sported a comic book theme with the fight poster. A nice change from the usual face offs.
UFC 181 was slated for movie theaters once again.
In the Octagon were Wargaming.net, Alienware, Matefit.me, Fram, Musclepharm, Metro PCS, Harley Davidson, Air Force Reserve (a Robbie Lawler associated sponsor), Toyo Tires and Bud Light in the center.
Johny Hendricks had a new sponsor for the fight, Zak Products, an official NASCAR sponsor.
— Johny Hendricks (@JohnyHendricks) December 3, 2014
Hendricks and Pettis, already sponsored by Reebok, wore the brand into the Octagon. Perhaps the Pettis walkout shirt is a glimpse of what to expect from the brand in July.
Dynamic Fastener made its presence known in the Octagon. Hopefully, viewers will figure out what it does before it goes away in July.
Harley Davidson had a promotion where the winner of the Travis Browne-Brendan Schaub fight won a Harley. For those that didn’t watch, Browne won the motorcycle.
Odds and ends
Raquel Pennington-Ashlee Evans Smith ending was a cliffhanger of sorts since FS1 cut to commercial as Pennington had the choke on Smith and it was not clear what had happened. I recall the same thing happening with Dan Henderson-Shogun Rua.
Great wins for Todd Duffee and Josh Samman, the latter with a great headkick KO of Eddie Gordon. Gordon wore a legalize MMA shirt into the Octagon as he fights out of Matt Serra’s gym in New York.
There was some foreshadowing about 181 by Dana White on the Jim Rome Show.
Another interesting question in light of the Reebok deal.
— UFCONFOX (@UFCONFOX) December 6, 2014
Urijah Faber took what is becoming a normal spot as the final bout on the UFC Prelims. It’s interesting that he’s becoming a mainstay in this position but according to Dave Meltzer he chooses to be on FS1 rather than PPV because more people watch. It makes sense considering he is a name, can draw viewers to the FS1 prelims and is a good bridge to the PPV telecast.
Interesting that they dropped the lights for Pettis-Gil but not for Hendricks-Lawler.
The production for the promos for UFC 182 and UFC 183 were great and showed more of a entertainment edge to them.
A good read on referee Mark Smith, who is a retired Air Force pilot. Only coincidence that Air Force Reserves was a sponsor on the Octagon mat.
UFC 181 was one of the best cards of the year. From the Prelims to the main event, it came through with action fights, KOs, submissions and a surprise announcement. Does that mean it will cash in with PPV buys? Google searches were high on the search terms UFC and CM Punk in the U.S. as both were trending 3rd and 6th respectively with over 100K searches each. While this does not necessarily equate to buys (e.g. Manny Pacquiao registered over 500K searches yet scored a reported 300K PPV buys), we should see UFC 181 doing well and above this year’s PPV average. Look for somewhere between the 400-500K range.
November 29, 2014
The Sports Business Journal revealed its annual reader survey on various topics related to sports business. This year included questions about the UFC, WWE and boxing.
In a survey related to over the top networks, readers indicated that the UFC is the “Fight sport” that will see the biggest growth over the next five years. Of the 684 readers that responded, the UFC garnered 72% while boxing drew 17% and the WWE had 11%.
It also asked readers which over-the-top service was their favorite. Of the 818 responses, NFL Now drew the most votes with only 11%, followed by 120 Sports with 9%, WWE Network with 4% and then UFC Fight Pass with just 1%. Notably, 75% of the respondents stated it did not watch any of them.
On an unrelated, yet interesting note on digital league subscriptions, readers found MLB.tv (22% of the 818 respondents) their favorite followed by NFL Sunday Ticket (18%) with NHL GameCenter Live coming in third (14%). This is interesting considering the NFL usually takes tops with its coverage.
SBJ indicates it has a readership of over 54,000 with many business executives in sports reading the trade publication. The UFC is periodically featured in the publication and the UFC and WWE both advertise in it. Obviously, the survey is not based on anything other than the opinions of the readers. Still, it’s an interesting viewpoint on the business from those that do not closely follow the UFC. With the “growth” aspect, it’s clear that the UFC is moving into more global markets and are forging overseas television deals to advance its product. The WWE is already global and it depends on what organization you look at when looking at boxing. Certainly, Top Rank is trying to tap into the Chinese market. As for the over the top networks, it appears that we are still in the “early adopter” stage for the platform. The WWE has gone all in with its network but the UFC seems to be doing much better with Fight Pass despite the perception from the survey.