August 28, 2014
Variety reports that Mark Burnett, the creator of the reality show, “Survivor,” has a new show which follows Lucha Libre wrestlers which will air on the El Rey Network. “Lucha Underground,” is an hour long show which will feature five Luchadores from the AAA promotion in Mexico.
According to TV By The Numbers which has the original press release, shooting for the show begins in Los Angeles next week with a premiere date of October 8th.
The El Rey Network is owned by NBCUniversal and targets Latino audiences. It is available on Comcast, DirecTV and Time Warner Cable.
Payout Take: If you recall, Mark Burnett created “The Contender,” a short-lived reality show about boxers trying to make it. Although not widely distributed, this should be an interesting show to give a chance. It definitely caters to the Latino audience as Lucha Libre is popular in Mexico as the Variety article cites that Lucha Libre draws over 85% of Mexican television viewers.
August 13, 2014
Welcome to another edition of The Wrestling Post where we write about the WWE Network launching overseas and the news that tickets demand are lowest in four years for Summerslam.
WWE Network launches overseas
The official launch of the international over the top network went live this week as it was made available in 170 countries outside of the United States. The hope is that it will pick up much needed subscribers after meager additions after the company’s second quarter. In addition, in order to entice fans that do not want a longer commitment, it is offering two other tiers of subscription.
Via WWE press release:
The U.S. English language version of WWE Network is now available, on an over-the-top basis, in more than 170 countries and territories, including Australia, New Zealand, Hong Kong, Singapore, Mexico, Spain, and the Nordics, among others. The network is expected to be live in the U.K. by this October and plans for the network in Italy, UAE, Germany, Japan, India, China, Thailand and Malaysia will be communicated at a later date.
For $9.99 (U.S. dollars) per month with a six month commitment, fans have access to 24/7 programming, all 12 live WWE pay-per-view events, and the most comprehensive video-on-demand library. In addition, subscribers can now choose a monthly offering at $12.99 (U.S. dollars) with no commitment and the ability to cancel at any time. The $12.99 price point is a change from the previously announced $19.99 monthly plan and allows WWE to offer an option with no commitment that we believe better reflects the variety of economies that exist internationally.
Payout Take: We will see how many subscribers latch on to the WWE Network. Overseas growth had been key in the past for WWE traditional businesses. Certainly, the WWE hopes that proves the same with its network.
Summerslam Ticket prices lowest in 4 years
In addition to the WWE Network subscriber disappointment, tickets for this Sunday’s big event, Summerslam, ticket demand for this year rivals that of UFC 174.
According to TiqIQ, the average price for SummerSlam is currently $205.99 with a get-in price of $67, both lows since 2011. Last year the average price was $213.71 with a get-in price of $71. Neither year come close to the peak from 2011 and 2012, which had average prices of $248.31 and $249.64, respectively, with a get-in price of $75.
Payout Take: Take it for what it’s worth as the article was written by the CEO of TiqIQ and he sources his own company for the ticket information. Summerslam 2014 is likely not as bad as UFC 174, but if we assume that the ticket demand is down from last year, it reflects a bad spate for the WWE. Even with Brock Lesnar-John Cena in the main event, the interest appears to be off for this year if we are basing it on the ticket demand. Due to cost-cutting measures from the expenses incurred from the WWE Network, the WWE did away with its mini-exhibition, Axxess, during Summerslam although it will have a scaled down version.
August 10, 2014
The Sports Business Journal (subscription required) reported on the WWE’s launch of its network as part of its feature last week on Over The Top (OTT) networks. The article compliments another within the same issue which talks about the new platform in general.
The article on the WWE reports on the tumultuous time it has had with the launch of the network. Upon the announcement in January, there was much anticipation. But, after the initial numbers came out coupled with the general disappointment the rights fees deal caused the stock to drop and momentum to stop.
The WWE did receive some interesting information from the first few months from subscribers. Despite being off on its projections, the subscribers that have the network are very satisfied with the network. Many utilize the network at least once a week. Also, Xbox and Playstation are the two platforms used by most subscribers. This last part of information would suggest that a younger demo has purchased the network and maybe not as many older viewers (those that one would presume would subscribe for the older content) have the network.
The overarching theme about OTT is the direct competition it has with traditional platforms. At this point, OTT does not offer live sports with the exception of the WWE Network. No big revelation in the article about the WWE. Although the number of subscribers did not hit its target, the users that have it like it. What may be lacking is the older demo that the WWE thought would have been brought in by the vast WWE library.
July 31, 2014
WWE announced its 2nd Quarter earnings on Thursday. The big news was that the WWE Network added just 33,000 subscribers from the 1st Quarter. In addition, it reported laying off 7% of its work force.
While the number of subscribers is off from the company’s initial projections, the WWE indicated that the existing subscribers are happy with it. The company indicated that the Network will roll out in its present form internationally.
Similar to how the UFC introduced pricing options for Fight Pass, the WWE will also roll out options to its current payment plans. Fans can now pay $19.99 per month with no commitment to renew. This is likely to grab those wanting to order specifically to watch a “PPV” event. The other new option is that one can pay one time the $9.99 x 6 months. These two options will be in addition to the current $9.99 per month plan with a 6 month commitment.
The WWE also announced a 10 year deal with Rogers Communications in Canada for the Network to be a traditional pay-tv option.
Overall, WWE reported a Net loss of $14.5 million, or $0.19 per share compared to last year’s second quarter net income of $5.2 million or $0.07 per share. The wide swing is due to the costs for the Network.
Payout Take: WWE stock was up slightly to $12.48 on Thursday. Unfortunately, when a company cuts jobs, the stock experiences a positive bump due in part to the belief that the company is addressing issues with excess. The Hartford Courant states that 53 of the 762 positions with the company would be cut. The article also states that the cuts “along with other efficiencies” should improve the operating income by $30 million (before depreciation and amortization) in 2015.
As for the Network, the number of gained subscribers at this point suggests that it will not reach its targeted goal of 1 million by the end of the year.
July 31, 2014
On Tuesday this week, a Minnesota jury found in favor of former governor and professional wrestler Jesse Ventura in a defamation case against the estate of a former Navy SEAL that wrote in his best-selling book about a fight with Ventura. The jury awarded Ventura $1.8 million.
Ventura won $500,000 for his defamation claim as he denied getting into a fight with Chris Kyle, a former member of the Navy SEALs and elite sniper. He also won $1.3 million for unjust enrichment.
Essentially, the book, “American Sniper: The Autobiography of the Most Lethal Sniper in U.S. Military History,” written by Kyle included a part wherein he talked about an encounter at a bar in Coronado, California where a “celebrity SEAL” was talking a little too much. In the book, he was referred to as “Scruff Face.” Kyle stated that he punched him. It came out in media interviews promoting the book that the “celebrity SEAL” was Ventura.
Ventura sued in 2012 and continued the suit against the estate of Kyle after Kyle died in a shooting at a Texas firing range. He claimed that the book caused him to lose earnings and alienated him from the SEAL community
Source: NY Times
As a public figure, the standard for proving defamation is higher than that of a private person. Ventura is considered as a public figure for a variety of reasons including formerly holding public office, performing as a wrestler and hosting a variety of television shows.
In honor of those that have taken the bar this week, here are the factors for defamation:
- There must be a statement that has been published;
- The statement is false; and
- The false statement must cause injury.
For a public figure, like Ventura, to win a defamation claim, he must prove that the writer had knowledge that the information was false.
There’s no indication that the estate of Kyle will appeal the ruling. It appears that insurance paid the defense for Kyle’s estate and presumably will pay the verdict. Ventura states that the jury award will essentially pay off the lawyers. The jury deliberated several days after closing arguments which some suspected that Ventura had proved his case and it was a matter of how much he would receive. It would be interesting to know the evidence which showed that the incident retold in the book was false.
July 28, 2014
TMZ Sports first reported that TNA Impact Wrestling on Spike TV will not be renewed by the network. The company has been with Spike TV since October 2005.
While ratings usually hover around 1.2 million viewers on Thursday nights and once served as lead-in for Bellator, the promotion has fallen on hard times. Attendance and finances have been the leading causes for the downturn in what is the de facto number 2 professional wrestling company.
According to Dave Meltzer on Sunday night’s Wrestling Observer podcast, the TMZ report has been confirmed by people within TNA. The current deal runs through October although it’s not clear whether Spike TV will continue to air it through the end of the deal.
Recently, King Mo re-emerged with the organization and it’s not clear whether he will continue on as part-time wrestler, part-time MMA fighter if TNA continues on another network.
Payout Take: It’s an interesting move on the part of Spike TV to cancel TNA as it does have a following of at least 1 million viewers each week. Compare that with Bellator ratings and TNA would seemingly be safe on the network. Perhaps TNA is going a different direction here. As for TNA, it’s not clear if the company will fold or seek to find another network to air on. But, if you look at the WWE’s rights fee deal, pro wrestling may not be a burgeoning property in the television industry.
July 16, 2014
MMA Junkie reports that King Mo Lawal, Cheick Kongo and Bobby Lashley have been added to Bellator 123 which takes place on September 5th in Connecticut. Lashley is a pro wrestler with TNA Wrestling and is currently its Heavyweight champion.
In addition to his pro wrestling experience, Lashley has competed in MMA. The move attempts to bulk up an already stacked card which is headlined by Pat Curran defending his Featherweight title against Patricio Freire.
The current card via Bellator press release:
Bellator Featherweight Title Fight: Pat Curran (20-5) vs. Patricio Pitbull (21-2)
Bellator Heavyweight Feature Fight: Cheick Kongo (21-9) vs. Lavar Johnson (18-9)
Bellator Light Heavyweight Feature Fight: King Mo (12-4) vs. Tom DeBlass (9-2)
Bellator Heavyweight Feature Fight: Bobby Lashley (10-2) vs. Josh Burns (8-7)
The Bellator card will go head to head with a UFC Fight Night card that has been bulked up due to the cancellation of UFC 176. The card, which takes place at the Foxwoods Resort Casino in Ledyard, Connecticut is headlined by Gegard Mousasi taking on Ronaldo Souza.
September 5th will be a big night for MMA fans as it’s the first time the two organizations go head-to-head on television and in the same state. The signing of Lashley is somewhat surprising but it does add name recognition for the crossover pro wrestling fans. With TNA Wrestling taping most of its shows through August already, it’s unlikely that Bellator can take advantage of the crossover on its weekly TNA shows (which draw over 1M viewers) unless it edits in info about Lashley in voiceovers. Lawal and Kongo also make sense as Lawal can sell his fights and the ratings reflect that Kongo (for some reason) produces good ratings for Bellator.
May 30, 2014
Before we head into one of the bigger combat sports Saturdays in a while, we welcome you to another edition of the Wrestling Post.
In a bit of bad timing for the WWE, this Sunday its Pay Per View event, Payback in Chicago will now go up against Game 7 for the Chicago Blackhawks as it plays the Los Angeles Kings to see who makes it to the Stanley Cup. The card itself is not that strong and the importance for many Chicago sports fans will be centered around the hockey team.
Also on Sunday will be the Season Finale for Total Divas on E! In its second season, (and renewed for a third) the episode culminates at Wrestlemania and Daniel Bryan’s wedding. This season’s average through 10 episodes is slightly over 1.16 million viewers. It’s likely that it will not surpass its first season of almost 1.3 million viewers per episode. For the second time this season, the episode will run up against its own brand so we might expect a certain segment of fans putting the finale on the DVR.
Regardless of the outcome of the finale, Total Divas has proven to be an asset for the E! network. According to a recent press release, the network credited Total Divas for its 7% increase across key demos.
Via E! press release:
Returning series Total Divas is one key driver of growth, out-delivering year-ago programming across all key demos by impressive triple digit growth up to +135% in Total Viewers (1.0 Million), +103% in Women 18-34 (252,000), and +142% in Adults 18-49 (628,000). Total Divas is pacing as E!’s best sophomore original series in two years (since May 2012) and is the network’s second-most watched original program after Keeping Up with the Kardashians. Total Divas also ranks as a Top 5 ad-supported cable show on Sundays 9pm to 10pm in Women 18-34 (#3) and Adults 18-34 (#5).
Payout Take: Despite what you may think about the reality show, it has become valuable to the E! network. Even though there has been a slight decrease in viewership this season, it is doing well with key demos. In its first season, it was positioned to succeed with a prime spot after its top series, Keeping Up with the Kardashians. This season has gone without Kim and Chloe as a lead-in but still has produced on one of the busiest nights on television.
May 21, 2014
The WWE conducted a special conference call on Monday in order to mitigate some of the damage that occurred with the announcement of its deal with NBC Universal. Although terms of the deal were not divulged, investors took the news as bad and the stock has tumbled.
The conference call did not reveal anything new except for the fact that WWE CEO Vince McMahon stated he was “a little disappointed” in its new deal with NBC Universal. He indicated that the deal altogether was “at about $200 million.” McMahon was frank on the conference call stating that the deal was not what the company wanted or what its researched showed with respect to its domestic television deal. He also admitted in the Q&A portion that launching the WWE Network had a negative impact on negotiating its TV rights deal.
One of the takeaways here is that the WWE may have underestimated the impact the loss of its PPV revenue may have on its core business.
It still projects that it will have 1 million network subscribers at the end of 2014 and the possibility of 2 to 2.5 million subscribers at the end of 2015. With the subscriber projection of 1 million at the end of 2014, it would have an estimated 2014 OIBDA (Operating Income Before Depreciation and Amortization) loss of $40 million for the network alone and $35-$45 million for WWE. If the WWE achieves its 2 to 2.5 million subscribers number by the end of 2015 it will have turned around the loss to an OIBDA of $105 million to $160 million for the network and $125 million to $200 million for WWE.
Despite the promising outlook, investors are not happy right now. Marketwatch reports that the Former Attorney General of Louisiana has commenced an investigation into the WWE. The crux of the investigation will seek “whether WWE and/or its officers and directors violated state or federal securities laws.”
Unless the investigation produces material information that the officers and directors knew that it was misleading investors, it’s unlikely that the investigation would produce much. McMahon alluded to the fact that the company’s research reflected the fact that a TV rights deal could garner double the WWE’s current deal. Obviously, if the research was flawed and/or not sound in its conclusions, there may be an issue. But, I would not suspect any criminal or civil penalties as a result of a disappointint TV deal.
Monday’s Business Outlook Conference Call was a way for the WWE to calm its investors. But the conference call probably did not make any holder of the stock happy considering McMahon expressed his own dismay on the new deal. Earlier this year, the rights fee deal was thought to be a big boon for the company based on other sports’ rights deals such as NASCAR, but it did not come to fruition. Based on the huge hit the WWE took after news of its domestic television deal and the news that PPV revenue will contribute more than expected to the company’s losses, many investors are cutting their losses. The steep decline in stock price caused an investigation and the possibility that executives will be removed to satiate angry stockholders that saw their portfolio take a huge hit.
Just a few months ago, the WWE stock was trading above $30 and now (at the time of this writing) it’s trading below $11. The stock has been downgraded by analysts which can’t help foster confidence right now. Now, analysts will take aim at its network to see if the company can come through with its projections.
May 2, 2014
On Thursday, the WWE announced its First Quarter earnings for 2014. Despite a loss of $8 million ($0.11 per share) due to the WWE Network, it beat analyst expectations by 0.05.
This quarter in 2013, the WWE saw net income of $3.0 million or $0.04 per share.
The most notable news was the lack of news on a new domestic rights TV deal which was initially thought to be completed by late-April or early May. Yet, there was no word on the status.
The WWE reported that despite the $4.4 million of network subscription revenue (based on 495,000 subscribers at quarter’s end), it was partially offset by $1.3 million decline in pay-per-view revenue. Notably, Wrestlemania XXX was not factored into these numbers. Here, we see the obvious cannibalization of its product. The announcements by DirecTV and Dish Network that it would not carry this Sunday’s PPV are a looming threat to the PPV revenue. The concerns would be whether purchasers of the WWE PPVs could transfer to the WWE Network to view the PPVs and how much more PPV revenue could it lose if big distributors refuse to air its PPVs.
It reiterated its belief that it would have 1 million subscribers by the end of the year. It also believed its expansion of the network to more platforms (e.g. Xbox One) and international markets will provide long-term growth over time.
WWE stock finished up 4% slightly over $20 for Thursday but is off 7% as of this writing on Friday.
There was nothing earth-shattering about the losses as most knew that the WWE would be reporting this due to the Network expenses. The lack of news of a new domestic rights TV deal is hard to read. It could be good news or bad news. Based on the stock price, it appears that investors are taking this as bad news. The Network remains the big news this quarter. While Wrestlemania viewership on the Network and PPV did over 1 million viewers, we may not see these types of combined numbers again. The news that distributors are beginning to backlash against the WWE for its Network is something to keep an eye on the rest of this year.