February 9, 2013
The Wrestling Observer reports that DirecTV has sent out surveys to its viewers as to whether it would be interested in the WWE Network.
The Observer (subscription required) notes that the new network would be airing 11 of the 12 PPVs a year of the WWE. WrestleMania, the biggest PPV of the year for the WWE, will remain exclusive via PPV.
The price points given were: $12.99, $14.99, $16.99, $19.99, $24.99 and $29.99. The survey asked whether subscribers would subscribe and how much would they be willing to spend.
The news that DirecTV is putting out feelers on whether it would offer the WWE Network is surprising considering its recent troubles in negotiating carriage deals with the Longhorn Network, the Pac 12 Network and several regional sports networks. It recently shut down its NASCAR Hot Pass offering and there are rumors that it may allow its exclusive NFL Sunday Ticket deal to lapse after the 2014 season. (h/t: Sports Business Journal, subscription required)
DirecTV’s survey may be nothing more than that and we may not be any closer for the WWE Network launching. Of course, we will see what the WWE says on February 28th when its quarterly earnings are released. Investors and analysts will continue to press about a network that was promised last year.
As for DirecTV, it has taken a critical look at the marketplace and has drawn lines in the sand when it comes to sports network carriage deals. DirecTV has determined that certain networks are not worth the amount it would cost to carry for its subscribers. Set upon this backdrop, it would be a surprise that the WWE Network would be offered by DirecTV to its subscribers. The prices listed in the survey are steep to add to a cable bill. Right now, HBO is the most expensive premium channel at $15.99. It would be hard to imagine anyone (outside of a diehard WWE fan) would subscribe to the WWE Network for a price over $14.99.
February 6, 2013
Welcome to another edition of The Pro Wrestling Post. In this edition, we take a look at the dismissal of a lawsuit, what’s next for the future of WWE video games and its YouTube channel tops 1 million subscribers.
TNA dismisses lawsuit against WWE
In mid-January, TNA dismissed its lawsuit against the WWE as the parties settled the case out of court. The case was based on claims that a former TNA employer that was hired by the WWE provided the WWE with confidential information he obtained while a TNA employee. Despite WWE turning over the documents, TNA claims it took the WWE three weeks to provide them with the documents and used them in attempting to acquire TNA talent, notably Ric Flair.
The parties quietly agreed to dismiss the lawsuit without further fanfare. TNA had requested to depose the likes of Triple H and Ric Flair to determine the extent the WWE knew of the documents provided by the former TNA employee.
Payout Take: It appears that cooler heads have prevailed in this standoff without any heated depositions. TNA believed that the WWE would use the documents as leverage, but as it stands now, Ric Flair is the only notable TNA contracted performer (at the time of the allegations) to have made an appearance with the WWE. Flair had been on the outs with TNA and is only making occasional cameos with the WWE.
Take Two to buy WWE video game franchise
Kotaku reports that video game maker Take Two, owned by 2K Sports, will purchase the WWE license to make its video games As you recall, THQ holder of the WWE’s rights to make its video games filed for bankruptcy late last year. The WWE is an unsecured creditor, owed an estimated $45 million by THQ.
Payout Take: It will be interesting to see what video titles the WWE will release (if any) this year. There is debate as to whether Take Two will produce an arcade style game or a simulation game. It will be interesting to see how this acquisition will affect the WWE’s business in this sector.
WWE tops 1 million subscribers
The WWE announced that it hit 1 million subscribers on its YouTube channel this past week. A press release by the WWE marked the accomplishment. It is one of the top 15 most influential brands in social media.
Payout Take: While the UFC is one of the pioneers of social media to promote its sport, the WWE has invested in it and developed new ways in reaching its audience. Its partnership with YouTube and producing original content on its channel has been a success. I think one of the markets it may have tapped into is the cord-cutters and the youth that feel as comfortable in front of a computer screen (or tablet) to watch “television.” The 1 million subscribers also speaks to its global reach, something the UFC is still in the infancy stages of developing.
January 28, 2013
Brock Lesnar has signed a 2 year extension with the WWE. The deal dispels rumors of a return to the UFC.
Lesnar’s WWE commitment was solidified when he showed up on Raw Monday night and F5’d Vince McMahon. The appearance likely means that Lesnar will appear at Wrestlemania this spring. PWInsider.com first reported the re-signings of Lesnar and Chris Jericho. Lesnar had signed a limited one year deal which expired this spring. This deal will have him with the WWE through Wrestlemania 31.
Payout Take: Interesting to note that Lesnar still sports Jimmy John’s and Case IH, an agricultural equipment company, on the back of his shirts. Its a prudent move despite the rumors that Brock might have been willing to come back to the UFC. Certainly he could make more money with the WWE taking less physical abuse than he would in the UFC. At his age and with his past medical issues, its the better business move.
(Photo: via Wikimedia Commons)
January 12, 2013
TNA Wrestling has announced that it is restructuring its PPVs for 2013 and will only have 4 instead of 10. It will now have PPVs in January, March, June and October.
Late last year TNA had announced that it was reducing its PPVs from 12 to 10. Only a month or so later it announced it would only have 4. However, the wrestling organization announced that it would tape 3 hour specials which would be available on PPV for a reduced rate of $20 a month. This would compensate for the 3 less hours per month of content for its international distributors.
TNA will continue to air its 1 hour Video on Demand programs entitled “Unfinished Business.”
Notably, DirecTV is not carrying TNA’s Genesis PPV on January 13th. Its not clear the reasons for the abrupt change in strategy. TNA Wrestling is still pulling ratings at an average of over 1 million viewers a week nd will be the anchor for Thursday night combat sports viewing on Spike TV. It will serve as the lead-in for Bellator. But, the move away from PPV and focusing on pre-produced content may be seen as a cost-saving measure. The new alternative, “One Night Only” 3 hour specials for a reduced rate might be attractive to the TNA fan interested in seeing more but not wanting to pay the $50 for a PPV.
The “less is more” strategy may help with overall PPV buys as the company can focus on developing its characters and storylines in leading up to the PPVs.
January 8, 2013
AdAge.com reports that WWE wrestler Jon Cena will be involved in a Fruity and Cocoa Pebbles promotion in which Cena will grace the boxes of 4 million boxes. Cena’s presence will grace the cover of the kid’s cereal.
Cena famously (or infamously) received the nickname of “Fruity Pebbles” from The Rock during the leadup to their main event match at Wrestlemania 28. In describing Cena’s colorful ring attire, The Rock called him “Fruity Pebbles” in what was likely a PG ad lib.
Last year at about this time, the WWE and Post Cereal announced an initial deal in which Cena would grace the cereal box of Fruity Pebbles. This time around, Cena will replace Fred Flinstone on the cereal box.
Payout Take: The deal is the “most-significant partnership with a mainstream, family food brand since the organization began seeking such deals” in toning down its content according to the AdAge article. While the “Fruity Pebbles” moniker could be taken as a jab at Cena’s sexual preference, the WWE contends that it is a commentary on Cena’s ring attire. The second straight year of Cena on the cereal box helps foster further inroads into finding more family friendly, mainstream partnerships. The deal is an interesting commentary on how the WWE has been able to curb its content to appeal to a bigger, family friendly audience as compared to the “Attitude” era. While its still able to have some matches of “violence,” most of its content on television is acceptable for children.
December 24, 2012
Welcome to another edition of The Wrestling Post. This edition we’ll take a look at THQ’s bankruptcy, the Survivor Series buy rate and Daniel Bryan makes a young boy’s dream come true.
THQ goes bankrupt
The Wrestling Post takes a look at THQ’s Chapter 11 Bankruptcy filing and what that means for the WWE. According to court filings, the WWE is an unsecured creditor that is owed $45 million.
The video game maker had been accumulating losses over the past couple years which caused the company to file a Chapter 11 reorganization plan.
The WWE sent out a statement this past Wednesday which likely was sent out to ease the minds of its investors. It indicated in a short press release that it anticipated “actively participating” in the bankruptcy proceeding.
The WWE is listed as an “unsecured” creditor in THQ’s bankruptcy filing indicating that the company owes the WWE $45 million which reflects the entirety of its multi-year agreement with THQ.
The WWE indicated in another press release on Thursday that the amount owed by THQ would not impact the financials of the company. It went on to state that even if the $45 million debt would have an impact on the financials it would not affect its stock price.
THQ will not cease operations as it is in the process of being purchased which means that THQ may still have an existing contract to make the WWE video game franchise. The bankruptcy court would have to allow the purchase to go through.
Payout Take: Being an unsecured creditor in this type of bankruptcy proceeding means that its highly unlikely that the WWE would recoup any of its $45 million from THQ. Although it indicated that it would actively participate in the bankruptcy proceedings it may be more saber rattling than having a good chance of collecting on the debt. The press releases were investor relations PR to ease the minds of its stockholders. Losing $45 million is not a good thing for the company and letting investors know it wouldn’t affect its financials seems more important than actually recouping the debt. Although, both would be nice if you were Vince McMahon.
Survivor Series buy rate disappointing
The Wrestling Observer (subscription required) reports that the Survivor Series buy rate received only 212,000 buys. In comparison, last year’s Survivor Series did 281,000 buys. Of course, the main event featured The Rock and John Cena. But, the year before, the 2010 Survivor Series received 244,000 buys for a Randy Ortron-Wade Barrett PPV.
(h/t Cageside Seats)
Payout Take: Poor ratings for what used to be the biggest event of the fall for the WWE. A CM Punk-John Cena-Ryback main event failed to draw enough interest from fans. It will be interesting to see what the WWE will do to create more interest for its PPV buyers considering the vast amount of WWE content via many platforms.
Bryan taps for a good cause
On a recent stop in Pittsburgh by the WWE, wrestler Daniel Bryan made a pre-show visit with a young fan with cancer. The highlight of the visit was the young boy putting Bryan in a submission hold and Bryan tapping. (via CBS Local Pittsburgh)
Payout Take: Despite some of its questionable storylines, the WWE recognizes its obligation to charity including the Make A Wish Foundation. John Cena has made many appearances with young children with terminal diseases. While the appearance by Bryan is good publicity for the company, it also fulfilled the dream of a young boy. A very good story for the holiday season.
December 15, 2012
Welcome to another edition of The Wrestling Post. This week we look at TNA’s venture into lottery tickets, reduction in PPVS and the WWE’s iPad App.
TNA agrees to pact with lottery ticket maker
MDI Entertainment, LLC has signed a deal with TNA wrestling for lottery branded scratch tickets with images of TNA stars. The agreement includes images on promo materials as well as the possibility of personal appearances and public service announcements. The agreement includes the possibility of second chance prizes including the possibility of TNA merchandise and/or trips to TNA events.
(H/t: Cageside Seats)
Payout Take: A good partnership for both companies as it allows some promotion of the TNA brand and it gives the company some exposure to a greater population of people.
WWE’s iPad App offers second screen experience and PPVs
Last week, the WWE began promoting a second screen experience entitled “WWE Active” which allows users of the App access to additional information including polls, trivia and the opportunity to watch backstage features during the live edition of RAW. In addition, the WWE announced that users could eventually order PPVs on the App which would allow mobile access to watch WWE PPVs
Payout Take: The WWE iPad App is very popular with 2.7 million downloads in 215 countries. Having used the app, it definitely is one of the better free downloads for iPad users. The move to utilize the app to include additional original content allows more interaction with its fans. The PPV component is one way to monetize the app and give fans another way to access the WWE.
TNA reduces PPV schedule
The Wrestling Observer (subscription required) reported that TNA Wrestling will be reducing its total PPVs for 2013 from 12 to 10. This would allow for better buildup between pay per views.
Payout Take: Less is more. This is a good move by the company as it can build on storylines and hype the matches for a PPV. The move should help with overall PPV sales for the year and shave down production costs for two less PPVs.
December 11, 2012
Bellator officially announced its debut on Spike TV for Thursday night, January 17th. It will be in a two hour block starting at 10:00PM PT/ET.
Via Bellator Press Release:
Emanating from The University of California’s Bren Center in Irvine, CA, featherweight world champion Pat Curran defends his title against explosive knockout artist Patricio Pitbull, while lightweight world champion Michael Chandler battles former Olympian Rick Hawn in their highly-anticipated Bellator Championship showdown.
The action-packed night also features the Bellator debut of decorated MMA veteran Renato “Babalu” Sobral, who will fight in the quarterfinals of the Light Heavyweight Tournament against Russian submission ace Mikhail Zayats.
“Our Thursday, January 17th premiere on Spike will be an incredible night for MMA fans; two epic world title fights and an amazing collection of tournament fights” said Bellator Chairman & CEO Bjorn Rebney. “Spike TV is the home for MMA and this event will be a great way to kick off that homecoming.”
With the UFC announcing TUF’s move to Tuesday nights on FX, Bellator made its departure from Fridays official. It will be interesting to see how each does on its new nights. TNA’s Impact Wrestling will be the lead-in for Bellator. We’ll see how the new network and new time slot does for ratings for Bellator.
November 22, 2012
Welcome to another edition of The Wrestling Post. This week we look at the WWE calling out TUF, a new distribution deal for the WWE and CM Punk not happy with management.
WWE makes another run at the UFC
During this week’s Monday Night Raw, the WWE took a shot at the low ratings of TUF. In one of its intro bumpers it boasted that the WWE’s Friday Night Smackdown on SyFy was the most socially active show on broadcast and cable TV. The bumper went on to state that it beat The Ultimate Fighter “by 10 times!” (via MMA Fighting).
Payout Take: The implication is that the WWE has more viewers and a bigger fan base promoting the product via social media than the UFC. Yet, as the MMA Fighting article points out, neither company considers the other a direct competitor. Usually, the WWE touts (no pun intended) its company versus others in the marketplace. This past Monday, another one of its bumpers stated sales of the WWE’s game, WWE ’13, exceeded that of Madden and NBA2k13.
The interesting thing is that the UFC usually does not return fire at the WWE even though Dana White is known for responding to anything negative about the UFC.
WWE forges new international distribution deal
The WWE announced it has entered into an agreement with FremantleMedia Enterprises (FME) for the exclusive home entertainment rights to WWE’s catalogue of programming across Europe, Middle East and Africa. (EMEA).
According to the press release FME will manage the DVD, Blu-ray and digital rights for all new and existing WWE content, making it the first time that fans of WWE’s popular programming can access it digitally across EMEA.
Payout Take: The move should help with growth internationally and bolster the profits overseas. The digital media sector is lagging based on the 3rd Quarter results from the company so this move looks to assist with this issue.
CM Punk appears on The Talking Dead; gets to be Grand Marshal of parade
WWE Champ CM Punk will appear on AMC’s The Talking Dead, the shoulder programming for the network’s big hit, The Walking Dead. The interesting part of this is that Punk was critical of the WWE for not promoting his appearance this Sunday.
The WWE has promoted its talent on other programming. This past Monday, it promoted the WWE taking over the E! Networks “The Soup,” on Raw this past Monday but no mention of Punk’s appearance.
Payout Take: Whether or not Punk is in his bad guy character when he’s tweeted his disappointment for not promoting his appearance. It could be a part of his gimmick but I would think that the WWE would want to take advantage of any mainstream publicity it could especially since The Walking Dead is one of the more popular shows out there. Even if Punk would be on the talk show supporting TWD, it would be beneficial for the WWE. Overall, appearances by WWE characters on The Soup and The Talking Dead help the brand and its characters and reflect an emphasis on the Entertainment part of WWE.
November 1, 2012
The WWE announced its 3rd Quarter earnings on November 1st with mixed news as the company saw a decline in its profits and revenue from last year yet it beat analyst expectations. The big news from the earnings call is that the WWE has decided on a pay subscription model for its WWE Network.
The WWE net income for the third quarter of the year was $3.5 million and 5 cents a share whereas it earned $10.6 million and 14 cents a share in 2011. Thus, the net income was down 67%. The earnings for Q3 in 2012 would have been $5 million and 7 cents a share but for a one-time expense adjustment.
Revenue was down 4% from $108.5 million to $104.2 million this quarter.
Good news for the company was that average attendance in North America was up 6% and PPV buys saw an increase of 13% for 3 events in the quarter. This rise was anchored by Summerslam which was up 21%. This can be attributed in part to Brock Lesnar’s participation in this year’s Summerslam main event.
Notwithstanding the financials, the big news coming out was the WWE Network. The WWE produced research which indicates “a significant WWE U.S. fan base of 57 million households.” A detailed survey of over 9,000 households was conducted and the findings concluded that 50% of U.S. households can be considered a “WWE fan household.”
Last week, industry trade RBR.com reported on the study compiled by SNL Kagan which indicates that 20% of the 57 million are hardcore wrestling fans that follow the wrestlers, the storylines and regularly watch the WWE shows. A bigger subset of casual fans (40%) are not heavily invested in the program and while the research identified another subset of “lapsed fans.” These are individuals that used to watch wrestling and may be able to be attracted back to watching. I would contend that many of us are “lapsed fans” to some extent.
But, based on the research to support its choice, the WWE Network will be a premium subscription channel which will have some form of interactive component. McMahon indicated that the network would be an “add-on” to its complement of shows on cable and its PPVs although there is a possibility that PPVs may be included on the network.
As more news on the network continues to trickle out, it would be interesting to know what investors think of this investment. We can be skeptical of the SNL Kagan study like we may have been with the WWE’s economic impact report on host cities for Wrestlmania but there is a segment of the population that likes wrestling. The big question is how much? I am not sure that consumers would be willing to spend $10-$15 a month on one premium channel for wrestling. Certainly, this is the WWE’s challenge. I surmise that the WWE is hoping to utilize its vast wrestling library to conjure up some of the memories of the past to attract some of those lapsed fans while providing fresh content for its hardcore fans. The price point will be the big influencer on its success. Analyst Brad Safalow of PAA research believes that the premium model could pan out well for the company.
Via the LA Times:
“Subscribing to the network would be a ‘no brainer’ for the company’s hardcore fans,” (Brad) Safalow wrote in a recent report. Safalow said he anticipates a price of $14.95 for the channel and that WWE should be able to get 400,000 subscribers out of the gate and almost double that in two years. In 2014 Safalow projects that a pay channel could add as much as $141.6 million in revenue to WWE.
400K subscribers and $141.6 million in “add-on” revenue would perk the ears of investors but the questions remain as everyone waits for a launch date and more specifics.