October 30, 2014
The WWE announced its 3rd Quarter ratings on Thursday as it reported a net loss of $5.9 million ($0.08 a share) compared to net income of $2.4 million ($0.03 a share) from the third quarter in 2013. The big news is that the WWE Network has not picked up subscribers as projected and now a new strategy has been implemented.
First, the WWE Network subscription number which one may conclude has been disappointing so far. This past quarter, it had just picked up a total of 31,000 subscribers total (including international subscribers). Eric Fisher of the Sports Business Journal (via twitter) indicated that it had a gross subscriber add of 286,000 to end up with the 31,000 number. As Fisher points out, lots of “churn” from people subscribing then dropping the network. In its first quarter of offering the Network in Canada, it added just 28,000 subscribers.
Average Paid Subscribers (numbers from WWE Investor Relations)
Q1 – N/A
Q2 – 665,000
Q3 – 723,000
Q1 – N/A
Q2 – 406,000
Q3 – 515,000
Perhaps as a direct result of this poor number, the WWE announced in an email to its subscribers that it will no longer require a 6 month commitment for those paying $9.99 per month as of the December billing period.
In addition, it now will be offering the Network for free to new subscribers for the entire month of November. You will see the new catchphrase/hashtag #FreeFreeFree everywhere.
In other segments of the business, from data from the WWE, the WWE is off of its 2013 earnings in domestic attendance, home entertainment ($718,000 vs. $429,000) and of course, PPV buys ($761,000 vs. $285,000 – which is due to Network). Online merchandise was up and the International attendance average for this quarter has gone up in comparison to last year.
On the brighter side, the WWE stated in a press release that revenue from its “seven new key television agreements is expected to increase from approximately $130 million in 2014 to approximately $235 million in 2018, providing over $100 million of revenue growth subject to counterparty risks.”
Overall, the WWEN is up 68% from the prior year but the financial investment of $5.1 million due to lost PPV revenue and additional costs have impacted the initial gain. The WWE hopes that availability in the UK will continue to grow the network but so far it does not seem to show growth with it overseas.
At the time of this writing, WWE stock is down 6% to $12.48 in early morning trading. This is before its earnings call scheduled for 8amPT/11amET.
The new strategies offered by WWE with its Network (no commitment/free to new subs in November) infer strong concern as it is way off its projections at this point. Earlier this month, it announced that it would be adding “limited advertising” to the network which may reflect a pressing need to find some financial gains in lieu of subscribers.
It’s interesting to see the divergent paths UFC Fight Pass and the WWE Network have taken since both started. While many thought that the WWE had the better platform at the beginning, it appears (from all reports) that the UFC Fight Pass is flourishing while the WWE news is discouraging. Obviously, WWE is the only one that has to publicly report its numbers so we really don’t know the whole story for the UFC. Still, this has been a rough year for the WWE.
October 27, 2014
A lawsuit filed last week in the U.S. District Court of Oregon by former professional wrestler William Albert Haynes III (aka “Billy Jack” Haynes) citing class action status related to “head injuries occurring in former and current WWE wrestlers” per the lawsuit.
Haynes wrestled in the WWE for only two years from 1986-1988. Perhaps his most notable match was at Wrestlemania III. Most of Haynes’ career was spent in the Pacific Northwest.
The lawsuit spells out the dangers of the professional wrestling business amplified by embedded photos in its lawsuit as well as YouTube links. Essentially, WWE allowed its wrestlers to perform dangerous stunts, some of which include taking shots to the head causing head injuries. The claim made by Haynes’ lawyers is that these head injuries cause traumatic brain injuries (i.e., concussions) and chronic traumatic encephalopathy (“CTE”).
A section of the lawsuit includes: “WWE is a Fake Sport with Real Consequences to Its Wrestlers.” It also cites the numerous matches which include the use of chairs, chains, ladders and tables. It also details different wrestling moves which involve potential trauma to the head including the “Brain Buster,” “Bulldog,” and “Facebreaker.” They also bring up the case of a 13 year old that killed his 5 year old sister while performing a move he saw from the WWE.
The lawsuit accuses the WWE of not protecting its wrestlers from brain damage. Essentially, Haynes and his attorneys accuse the WWE of doing little, if anything, to protect its wrestlers. It also claims to denying or concealing injuries of its wrestlers.
The claims in the lawsuit include:
-Fraudulent Concealment and Failure to Disclose or Warn
-Declaratory and Injunctive Relief
-Medical Monitoring –this claim requests that the WWE establish a trust to pay for medical monitoring of all wrestlers as frequent as medically necessary and would pay to develop and research other methods to reduce risks
-Strict Liability for Abnormally Dangerous Activities
In addition to the requests under “Medical Monitoring,” it is requesting that the court grant it class action status and designating the attorneys as Class counsel. It also is seeking actual, compensatory and punitive damages as well as attorney fees.
In response to the lawsuit, the WWE’s Senior Vice President of Marketing and Communications provided a brief statement: “Billy Jack Haynes performed for WWE from 1986-1988. His filed lawsuit alleges that WWE concealed medical information and evidence on concussions during that time, which is impossible since the condition now called chronic traumatic encephalopathy (CTE) had not been discovered. WWE was well ahead of sports organizations in implementing concussion management procedures and policies as a precautionary measure as the science and research on this issue immerged. Current WWE procedures include ImPACT testing for brain function, annual educational seminars and the strict prohibition of deliberate and direct shots to the head.” (H/t : wrestling-online.com)
I grew up watching Haynes wrestle in the Pacific Northwest mainly in a Portland, Oregon based promotion. He had a very brief stint with the WWE. This is a lawsuit that shall be interesting to follow and see whether or not the court grants Haynes class action status. For those wondering, the essential elements a court determines when deciding whether or not a lawsuit may receive class action certification are:
-Commonality: One or more legal or factual claims common to the entire class.
-Adequacy: The parties in the class must adequately protect the interests of the class.
-Numerosity: The class must be large enough that individual lawsuits would be impractical.
-Typicality: The claims or defenses must be typical of the plaintiffs.
The four elements commonly are remembered (mainly by bar exam takers) as CANT. It will be interesting to see whether or not the law firm can attain enough members willing to be a part of this lawsuit. Certainly there are enough wrestlers out there that could establish a sufficient amount of plaintiffs. However, how many are willing to come forward? On his own, Haynes may not have a strong case considering he only spent two years with the company and much of his time wrestling was on the regional circuit where he could have been subjected to similar risks and injuries. Thus, his case may not be as strong as someone who may have spent 20 years with the company.
This will be an interesting case that the UFC should take note of for future consideration. While the ways that the participants attainhead trauma are different, there are still issues related to MMA fighter safety and blows to the head that might be a part of future legal claims.
September 21, 2014
Welcome to another edition of The Wrestling Post. In this post we’ll catch up on Total Divas ratings and the WWE brokers a new television deal in Latin America.
Total Divas Ratings –Season 3, episode 2
The second episode of the third season of Total Divas did just 974,000 viewers with a 0.5 rating. It’s a decrease from the debut episode for the third season which drew 1.2 million viewers.
Payout Take: Without a Kardashians lead-in on the E! Network, Total Divas is finding it hard to grab its own audience. It also doesn’t help that it is up against the NFL and other must see Sunday night television. Don’t expect a huge uptick this Sunday as it goes up against a WWE live event on the network.
WWE and Fox Sports Latin America announce 5 year pact
Earlier this week, the WWE announced a deal with Fox Sports Latin America. The 5 year deal includes Fox Sports Premium platforms across all of Latin America which will make WWE programming available in 56 million homes. The deal begins October 6th with WWE airing Monday Night Raw across the Fox networks.
Payout Take: The move into countries like Mexico, Brazil, Argentina, Columbia and Venezuela will help with its global footprint. It will also help with the future proliferation of the WWE Network.
September 9, 2014
Television By Numbers reports that the debut of the third season of Total Divas on the E! network scored an average viewership of 1.2 million viewers with a 0.6 rating in the adults 18-49 demo.
Total Divas went up against the seventh season of HBO’s Boardwalk Empire which scored 2.37 million viewers and was shown in the same time slot as the WWE reality show about its women wrestlers.
The ratings are Live plus Same Day Viewing.
The season premiere was up 15% versus the season 2 premiere according to an E! press release.
Strong ratings considering it did not have Keeping Up With the Kardashians as a lead-in. It also did well considering it went up against Boardwalk Empire and Sunday Night NFL Football on NBC. The WWE is starting to infuse Total Divas storylines with its WWE programming storylines which allows for crossover viewership. Can we see more males tuning into Total Divas due to the crossover with Raw and Smackdown?
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.