June 2, 2015
Welcome back to another edition of The Wrestling Post. This time around we take at the WWE Network offering another free month and the uncertainty of the status of TNA Wrestling.
WWE offers another free month on its Network
With the success of recruiting and retaining more network subscribers through its “free” network months, the WWE has added another free month of June for non-subscribers. It just came off a “free” month of May which culminated in a special live show.
Payout Take: There is no initial reason given for the second consecutive month of the “free” Network offer. We can’t read into anything but from the past indicators, the WWE has been able to collect a fair number of new paid subscribers from its free promotion. Thus, when people sign up for the free month, they tend to stay on and pay the following month instead of cancelling after the free month is up. The one question is whether the “free” month will be a mainstay for the network. It appears that the this strategy is the “go to” move to boost subscribers. We shall see if this means another improvement with its overall subscription numbers when it makes another announcement after the end of the second quarter.
Ring of Honor now on Destination America; TNA status in jeopardy
In what was a newsworthy week last week for the Discovery Network’s offshoot, Destination America, it was announced that wrestling promotion Ring of Honor will air on the network starting Wednesday, June 3rd. The interesting part about this situation is that the ROH announcement came after news that Destination America would not renew TNA Wrestling next year. The Wrestling Observer first reported the news that TNA Wrestling would be not renewed as Dave Meltzer obtained an internal memo from Destination America indicating that the promotion would not be renewed. TNA Wrestling is being moved from Friday to Wednesday and will now serve as the lead-in for ROH. While there was the possibility that Destination America could have changed its mind if TNA ratings skyrocketed on Wednesday nights, the ROH announcement makes it highly unlikely TNA will be back on Destination America once its contract ends this year. The station had an “out clause” at the end of the current TV season according to The Wrestling Observer.
Ring of Honor programming is currently available regionally via the Sinclair Broadcast Group. The Destination America deal is great for the promotion since it gives them national exposure and taps into markets that it could not reach with Sinclair. According to The Wrestling Observer, the deal with ROH will only go through December 2, 2015 so we may see more movement from Destination America this year.
Payout Take: Regardless of the semantics (cancelled vs. not renewed), Destination America made the decision that the production costs of carrying TNA Wrestling outweighed the ratings (and ad revenue) it received from the program. Ring of Honor is a cheaper alternative for Destination America since it will not be paying for production costs for ROH. Wednesday will be filled with wrestling as it joins Lucha Underground and NXT with live wrestling that night.
April 30, 2015
The WWE announced its results for the first quarter of 2015. In a release from the company, it stated that revenues increased 40% to $176.2 million which is the highest quarterly revenue in WWE history. The results exceeded analyst expectations for the company.
After five consecutive quarters in the red, it’s the first quarter where the WWE has shown a positive operating income. As for the WWE Network, it reached 1.3 million total subscribers, a benchmark it announced the day after Wrestlemania. The WWE reports that its average of network subscribers is at 927,000 at the end of the first quarter. Again, the network’s free promotion, which was February this quarter, contributed to the Network’s growth as 154,000 subscribers converted from free to paid subscribers.
For its quarter ending March 31, 2015, it reported net income of $9.8 million ($0.13 per share) as compared to a net loss of $8.0 million ($0.11 per share) in the first quarter last year.
According to Chief Strategy & Financial Officer George Barrios the positive financial results were “driven primarily by the escalation of our [WWE] television rights fees and the expansion of the WWE Network subscribers.”
The WWE indicated that it will implement a five-part strategy the rest of 2015 for the Network. This includes 1) creating new content; 2) implementing high impact customer acquisition and retention programs; 3) introducing new features; 4) expanding distribution platforms, and 5) entering new geographies.
As for the rest of WWE business, each division, except WWE Studios ($1.5M vs. $4.3M) is up over this quarter last year. The total net revenues for this quarter were $176.2 as compared to $125.6 at the end of the quarter for 2014. The Network segment, which includes revenue generated from Network and PPV increased $19.2 million from the prior year quarter. The Network alone generated $28.6 million in revenue based on an average of 927,000 paid subscribers.
At the time of this writing, WWE stock is down slightly at $14.16 per share.
A good quarter for the WWE. Beating the analyst expectations is a good achievement by the company. Wrestlemania was the likely key driver here especially when you look at the number of converted free to paid subscribers going into March, which was Wrestlemania month. Of course, we do not know how many dropped the network in April. We will see if the WWE can continue its positive momentum and see if its strategy for the network continues to net subscribers.
March 30, 2015
The WWE announced its network subscription numbers on Monday and Wall Street was unimpressed. The WWE Network surpassed 1.3 million subscribers which is almost double its total from a year ago. The current average is approximately 918,000 paid subscribers through the first quarter of 2015.
The WWE stock dipped during the day on Monday on “confusion over the company’s subscription growth,” according to analyst Laura Martin of Needham & Co. Last year, the company announced WWE Network subscriptions at 667,000. The average is at 918,000 per company press release.
The WWE Network surpassed 1 million subscribers in late January.
As of the time of this writing, WWE stock was rallying in after-hours trading. The 1.3 million subscribers sounds like a good number considering we are over a year in with the platform, but the fluctuations in how many subscribers there are at a current time still remains a source of confusion for investors. Thus, this may be the reason the stock dipped today. The network announced 8 new original series for the network during WrestleMania 31 on Sunday which the company hopes will facilitate consumer retention of the network.
March 30, 2015
The WWE announced an attendance and gate record for Wrestlemania 31 from Levi’s Stadium in Santa Clara, California. In a press release it indicated that it grossed $12.6 million with an attendance of 76,976.
It was the 5th highest attendance figure in Wrestlemania history. It also set a mark for attendance at Levi’s Stadium (previously 70,799 for the first regular season game for the San Francisco 49ers). Wrestlemania 29 at MetLife Stadium in 2013 had the previous record for highest gross with $12.3 million.
For the Bay Area, Wrestlemania served as preparation for Levi’s Stadium to host Super Bowl 50 next February.
The company’s annual event proved once again why cities vie to host WrestleMania each year. All of the events during the weekend surrounding Sunday’s show also provided a great influx of revenue to the Bay Area economy. Many fans make it an annual trip and local businesses benefit. While the attendance figure might be skewed, and as Dave Meltzer pointed out, the attendance record for Levi’s Stadium will likely be eclipsed by Super Bowl 50 next year, it still shows the continued popularity of the event. Even though the WWE has received criticism over the build of this show, it pulled off one of the best shows in Wrestlemania history.
March 29, 2015
Ronda Rousey made a special appearance at Wrestlemania 31 in Santa Clara, California at the WWE’s biggest event of the year. Rousey and The Rock appeared in a promo with Triple H and Stephanie McMahon which was signed off by the UFC.
Rousey actually got physical in the WWE ring as she gave Triple H a judo throw and grabbed McMahon’s arm and performed an arm crank and then “rag dolled” her around the ring.
According to MMA Fighting, The Rock and Rousey share the same agent. The appearance was likely part of a promotion for “Fast and Furious 7” which both make appearances in.
It was clear that the UFC had agreed to her participation at Wrestlemania. Rousey is a big wrestling fan and was in the front row of the event with the other three “Four Horsewomen.”
It was definitely a Wrestlemania moment with arguably the UFC’s most popular star in a WWE ring. Who said that the two audience demos are not the same? Even though the physical altercation was minimal, it’s still surprising that the UFC allowed this to happen. But, since Rousey is a big wrestling fan, it was probably something the UFC let her to do. I doubt she appears in a WWE match while still under UFC contract without some sort of monetary exchange.
I realize that this is not her first physical involvement at a wrestling event as she did what seemed to be an unrehearsed weak chop on a wrestler at a PWG show late last year. The Wrestlmania appearance was a way to promote Rousey and the Rock (who hosted SNL Saturday night) at the same time on one of the most viewed platforms (Wrestlemania) of the weekend. It will certainly grab some mainstream interest on Monday.
March 23, 2015
The WWE and NBCU have entered into a broad marketing plan the first of which will start during Wrestlemania this Sunday as Viacom’s Paramount has signed on to promote its new film, “Terminator: Genisys” with the WWE per company announcement. “For the Hero in All of Us,” campaign will air across NBC’s network and digital properties as well as all WWE platforms.
The new film, featuring Arnold Schwarzenegger will be promoted by the WWE starting this Sunday through its release in July. This Sunday, Triple H will make his entrance to the ring utilizing imagery from the movie. Triple H has a match with Sting this Sunday in one of the featured bouts of the annual event.
In addition, the new campaign includes WWE giving unprecedented access to its Superstars and Divas for creating custom “on-air campaigns, in-show integrations, and social campaigns to its advertisers.”
The new campaign spot created by the WWE is here.
Via WWE release:
Four key, tentpole marketing opportunities have been created for advertisers to take advantage of by utilizing WWE’s powerful engagement at scale:
- “The Road To WrestleMania” – a 32-day build up to the Super Bowl of sports entertainment.
- “The Slammy Awards” – an amped up version of WWE’s annual awards show that moves to first quarter in the heart of the red carpet season.
- “Champions of Fatherhood” – a special series which turns the spotlight on America’s unsung heroes.
- “Heroes of Tomorrow” – a way to highlight WWE’s legion of young fans.
It appears that the WWE and NBCU will work more hand in hand when approaching advertisers for the WWE product. Perhaps this is an effort to attract more advertisers with the eventual end game of boosting ad sales of the WWE product. The new strategy hopes to capitalize on the WWE’s broad social media and digital presence and NBCU broad scope of mainstream contacts to enhance advertising for the WWE.
March 22, 2015
On Friday night in Mexico, Perro Aguayo, Jr. passed away during an event in Tijuana, Mexico. The tragic death is a grim reminder of the safety issues associated with combat sports.
For those that do not know, the Wrestling Observer reports that wrestler Perro Aguayo, Jr. died, apparently in the ring, in a match Aguayo, Jr. was in a tag team match which included former WWE wrestler Rey Mysterio, Jr. Aguay, Jr., 35, was a popular wrestler in Mexico.
According to reports, Aguayo, Jr. died of a cervical spinal injury. While it’s still unclear about whether his death could have been prevented after the in-ring injury, it should be noted that two other wrestlers were injured on the same event earlier in the night. It’s not known at this time whether there was a delay in medical help to Aguayo, Jr. due to the other injuries. But, the ringside doctor was in the back tending to another wrestler at the time of the incident. The report is that there were two ambulances at the show but both stretchers were being used and a plywood board was used to carry Aguayo, Jr. from the ring to the back. Also, the match continued for a couple minutes before anyone recognized the severity of his injuries.
A CBS news report is stating that the Baja California state prosecutor is opening up an investigation of possible manslaughter.
The death is a reminder that even in professional wrestling there are high risks taken by the performers. It also reflects the fact for the need for medical attention at these events. Unfortunately, it appears that the doctor on site was attending to another wrestler. The medical needs of medical professionals at combat sports seem overlooked at times and there is a balance between the costs of providing such assistance versus the precautionary need to ensure safety. Notably, in Washington State, it revised a law this year which requires at least one physician and an ambulance or paramedical unit on scene at the event. Previously, it was either one or the other. The implication is that if someone is taken to the hospital by the ambulance, the event must stop until another ambulance returns to the event. Another issue is the cost to pay both physician and ambulance at an event. This was brought up when comment was requested of the revision to the law. Specifically, for smaller organizations, the costs are a hurdle.
It might be that even if there were a physician immediately there treating Aguayo, Jr., it might not have helped. We may know pending further investigation. Obviously, the Commission in Tijuana is different and has called the death “an unfortunate accident like those that occur in other high-risk sports.”
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.