The Wrestling Post – 05.14.13
May 14, 2013
Welcome to another edition of The Wrestling Post. This week we take a look at the WWE’s online move to Yahoo!, a pro wrestler gets in trouble on twitter and TNA moves one hour later while Bellator goes to Wednesday nights.
WWE moves content to Yahoo! Divas get own show on E!
Variety reports on Yahoo!’s partnership for showing exclusive WWE content online. Earlier this month engaged in a content agreement E! Television. Despite its time on YouTube, the WWE passed on being one of the new channels on YouTube’s fee based subscription service.
As if there wasn’t enough wrestling on Monday night, Yahoo! will air a 30 minute pregame show for Monday Night Raw among other original content. The deal includes Yahoo! having access to the WWE’s library. The Big Show and Stephanie McMahon made an appearance at the upfronts for Yahoo! WWE content should make its debut this summer on Yahoo!
In addition, the WWE Divas will have their own one hour reality show on the E! Network. Presumably, it will follow the women of the WWE backstage and through their “real” lives.
Payout Take: The new Yahoo! deal is an interesting switch from YouTube as the two parties decided not to renew its deal. WWE has opted to stick with an ad-based model (relying on ads for revenue) for its online content rather than join YouTube in a subscription-based model. As we know, the UFC and TNA Wrestling have pay channels in YouTube’s pilot program. Perhaps the WWE did not want to have fans to spend money on a subscription-based channel when it plans to have its own network to subscribe to soon. It could also be that the WWE saw more of advantage with ad revenue than subscriptions.
ROH disciplines its Champion for Offensive Tweet
The Wrestling Post does not usually cover independent wrestling organization Ring of Honor but its champion, Jay Briscoe, got into some hot water after making some controversial tweets about gay marriage. Briscoe, a native of Delaware, reacted via twitter to the recent passage of his state’s new law allowing gay marriage. Essentially, he’s not a fan of it.
In an effort to make things right, Ring of Honor made Briscoe apologize in the ring and he indicated that he would make a donation to an anti-bullying organization.
Payout Take: Even in the independent wrestling circuit, protecting the brand of the company and its image is necessary. The actions by Ring of Honor may not have happened on the independent circuit 10 years earlier. But, in an effort to be more inclusive and realizing that the world is much more accessible via the internet (i.e., people from all over the world can buy its DVDs, iPPVs, t-shirts, etc.) the organization made a decision to have its wrestler make a real apology.
TNA Moves to 9pm while Bellator moves to Wednesdays
In a move that will have more ramifications than just the wrestling show, Spike TV has decided to move TNA’s Impact Wrestling to 9pm/8pm Central on Thursday nights starting May 30th. The network announced that Bellator would move to Wednesdays starting with its Summer Series in July.
Payout Take: Maybe its a move for daylight savings time as many people will be outside enjoying the extra daylight and not inside watching TNA. We will see how this will impact ratings. For Bellator fans, how will moving to Wednesday nights affect its programming? There was not much proven correlation between TNA as its lead-in as Impact had a bigger audience that seemingly tailed off once Bellator came on. Yet, having a strong lead-in may mean more viewers checking out the Bellator product.
The Wrestling Post: WWE First Quarter Earnings
May 6, 2013
The WWE announced results for its first quarter for 2013 on Thursday via conference call. The WWE’s revenues were flat from last year thanks to the film business.
There is no word on the launch of the WWE Network although it spent $500,000 on it in the first quarter.
The WWE revenues were up modestly from last year: $124M from $123.9M. But, its net income was down sharply from $15M last year this quarter to $3M.
Other notes:
WWE Films’, Dead Man Down, lost $4.7 million while the bankruptcy of its former video game maker, THQ, caused a $2.1 million positive impact. Dead Man Down which starred Collin Farrell was a box office flop domestically. It was advertised during UFC 156. In fact, Bigfoot Silva knocked out Alistair Overeem in front of the Dead Man Down signage during their fight. It was probably the lasting memory of that movie. It anticipated a $3M loss from video game sales due to the bankruptcy of THQ but wrote it off and settled with the bankrupt video game manufacturer in order to sign an agreement with Take Two. Thus, in its balance sheets it showed a positive impact of $2.1M positive impact to revenue and $3.4M positive impact to operating income.
The WWE also spent money on the construction of a training facility in Orlando, Florida to support its up and coming wrestlers.
Although PPV buys and domestic attendance were up, international attendance at events were down. Also, paying The Rock and Brock Lesnar offset the revenue by the WWE although one may expect their appearances may benefit in the long run.
Payout Perspective:
The WWE may be nearing an end to its film division if it continues to lose money. “The Call,” starring Halle Barry has been the studio’s only real domestic hit. It was expected to make between $11-12M at the box office its first weekend in limited theaters but ended up making $17M. Yet, this was offset by “Dead Man Down” this quarter. With the WWE focusing its spending on the anticipated launch of its network, we may see the company take a critical look at this division. The second quarter is likely to be better as we should see the results of this year’s Wrestlemania as it is being reported that PPV buys are over 1 million.
The Wrestling Post – Wrestlemania 29 earnings
April 25, 2013
Variety reports that Wrestlemania 29 set a record in earnings with $72 million. This year’s event bested last year’s Wrestlemania in Miami which earned $67 million.
The $72 million figure includes ticket sales and PPV buys. The event was up $5 to $70 (in HD). Early PPV estimates have it at 1 million with the possibility of it hitting 1.2 million PPV buys. Attendance at MetLife Stadium set an attendance record of 80,676 fans.
Payout Take: Obviously, the increase in the PPV price may have helped bolster the earnings figure. Also, tickets for the event were likely more than the usual WWE event. Still, the $72 million figure is a good number for the event and should help jump start the fiscal year. We shall see with the earnings report coming out next Thursday.
The Wrestling Post: Post-Wrestlemania 29 Edition
April 16, 2013
Welcome to another edition of The Wrestling Post. In this edition we take a look at the post-Wrestlemania 29 numbers and problems with its live stream during the event.
Wrestlemania 29 Attendance 80K plus
According to The Wrestling Observer (subscription required), attendance at MetLife Stadium in East Rutherford, New Jersey was announced at 80,676. The figure would place it second among Wrestlemanias only second to the famed 93,000 plus at the Pontiac Silverdome in Detroit for WMIII.
The live gate was $11.3 million which is a pro wrestling record. The gate falls short of UFC 129 ($12,075,00) in Toronto in terms of all-time MMA/Pro Wrestling gates.
No PPV buy numbers have been revealed although with the higher price ($70 for HD), its likely to break any PPV buy revenues. WWE officials had predicted the event to do 1.3M buys. One may recall that last year it was reported that Wrestlemania 28 received 1.3M PPV buys only to have it lowered twice to somewhere between 1.1-1.2M buys.
Payout Take: Its unusual to think that the PPV lasted 4 hours yet ran out of time as one match was scrapped and carried over until the next night. While the attendance figures may be augmented on behalf of the WWE, the gate numbers are a better indicator of the revenue generator by just the event. Moreover, the PPV buys will likely surpass all records for the organization as not much has been said of consumers passing on the event based on the price increase.
Digital Issues with Online PPV during WM 29
WWE.com experienced outages during its biggest event of the year. The WWE App also crashed during the event and thus foreclosed those who wanted to order through the app. Although the issues were rectified in time for the replay, the frustration of not being able to watch an event that you paid for live is an issue that organizations wanting to put on events online must handle.
Payout Take: The problems with online live streaming. Invicta fell victim to this issue when it first attempted to charge viewers on UStream. Its second time around was much better. There were also issues with at least two wrestling iPPVs during Wrestlemania weekend. Obviously while the technology is there, the issues remain which will deter consumers from attempting to use the platform. Until problems are rectified, it remains an uncertain option.
The Wrestling Post – 03.22.13
March 22, 2013
Welcome to another edition of The Wrestling Post. This week we take a look back at a fight Dana White turned down, Wrestlemania is $70 and an interesting lawsuit involving the independent contractor/employee question.
Vince challenges Dana
One of the stories that was buried under the Nick Diaz press was Dana White revealing that Vince McMahon asked him to do a match with him at Wrestlemania 27 in Atlanta. Wrestlemania, the annual big event for the WWE usually pulls out all the stops including celebrity participation. Instead of White, the WWE had the Jersey Shore’s “Snooki” participate in a match. Previous celebrities included Donald Trump, Mike Tyson and host more. White smartly turned down the offer from McMahon.
Payout Take: Despite being different, the two organizations seem to always be connected. White seems to have respect for McMahon and perhaps vice versa. While we may criticize White for many business decisions, declining the spectacle that it would have been was the correct choice. Although it would have helped with UFC publicity, it would have made the two organizations synonymous which the UFC definitely does not want to do.
PPV model to go away but it will be $70 for Wrestlemania 29
WWE Chief Financial Officer George Barrios speaking to financial web site 4-traders.com indicated that the WWE’s pay per view model will eventually go away. This seems to be based on the hopes of the launch of the WWE Network which still does not have distributors or a launch date. Presently, the WWE plans to run its usual PPV events on the subscription based network with the exception of Wrestlemania in addition to running its events on regular PPV. However, Barrios believes that those PPV fans will “migrate” to the WWE Network. At some point, pay per view will eventually go away.
In the meantime, Wrestlemania 29 has been priced at $70 for the 4 hour event. This is a rise of $5 from last year and is on par with the Pacquiao-Marquez IV fight in December.
Payout Take:
The WWE seems to have gone all in on the WWE Network as it appears that they are set on having a network which will do away with its PPVs. Obviously, the “migration” of its fans is key to its success. I tend to think that the WWE’s PPV business is just one revenue stream of its business now and that the statement should not be surprising.
As for the $70 for Wrestlemania, I would think that the UFC is looking at this and seeing how successful the event is in terms of buys to see if it could raise its price point in the future. I think that this would be unlikely in the near future but something it could look at down the road.
Former TNA Wrestler Daphne settles injury lawsuit
An interesting lawsuit was settled at mediation earlier this month as Former TNA wrestler, Daphne, decided to settle her case with TNA instead of moving forward to trial. If the former wrestler had moved to trial, the first issue that would have been decided was whether the wrestlers are independent contractors or employees.
Shannon Spruill, Daphne’s real name, sued TNA for medical bills exceeding $26,000 from an in-ring injury. According to Spruill, she was promised that her bills would be paid by TNA but in the end, they were not.
Payout Take:
I will try to obtain a copy of the lawsuit (which I believe was filed in Tennessee state court) but the issue of independent contractor versus employee has come up again. The independent contractor status is something that has been used in professional wrestling to the detriment of the wrestlers. In MMA, most organizations, including the UFC, have its fighters as independent contractors and not employees. The UFC does offer its fighters under contract insurance which would have helped Spruill here. If Spruill and TNA had gone to trial on the issue of independent contractor/employee, it would have certainly raised some eyebrows if the court had decided she was an employee. Moreover, it would have opened up a ton of discussion (i.e., lawsuits) within the industry.
The Wrestling Post – WWE Q4 Earnings
March 6, 2013
On Thursday, the WWE released its earnings report for the end of the year for 2012. While Q4 turned a profit, the bigger news was that it anticipates that the company could double or triple its 2012 earnings by 2015 with the aid of the WWE Network.
One big asterisk with the earnings bonanza. The WWE projects that it must have at least 1 million subscribers to break even with the investment of the WWE Network. As we wrote last week, plans were revealed for the network which includes a premium subscription model with a price point between $12-99 and $14.99.
While the company has not shown significant earnings since 2007, its a solid dividend stock and as a digital content provider, could experience growth with content providers such as Apple, Hulu and Netflix looking for inventory to appeal to a young demographic.
The earnings report showed an increase in overall revenue while some sectors remained flat. Revenue was up 2% for the fourth quarter ($115.1M vs. $112.9M). However, it was relatively flat over the 12 year period from 2011 to 2012 ($483.9 vs. $484.0).
Fourth Quarter Revenue highlights via WWE Investor Relations:
- Hulu and YouTube agreements helped with the digital media growth.
- WWE acknowledged the THQ bankruptcy while announcing that Take Two obtained the license to make the WWE video games.
- Television was up 56.7 percent primarily due to production and licensing of new programs which include the additional hour of Raw, WWE Main Event on ION and WWE Saturday Morning Slam.
- WWE.com was up 3.5 percent due to rights fees associated with licensing of original short-form content to YouTube and next-day access of current TV programs to Hulu Plus.
- Home Entertainment was up 3.1 percent
- Live events declined 3.7 percent driven by 8 fewer live events and a decline in average attendance declined 11% at international events to 5,600 and fell 5% at North American events to 5,700.
- WWE Studios was down 3.7 percent which reflected the timing of releases. It will be interesting to see how the release of “Dead Man Down” will do this quarter as it stars Colin Farrell and Terrence Howard.
- Pay Per View was down 1.6 percent due to one fewer event during the quarter and a 3% decline in buys for events.
- Licensing was down 1.1 percent
Tuesday, the WWE stock closed up $.12 at $8.72.
Payout Perspective:
Some key takeaways from the Q4 earnings:
- Content is King. The WWE has done well with the addition of its content (i.e., RAW going 3 hours, WWE Main Event and Saturday Morning Slam)
- Attendance is down. The number reflect that less people are attending house shows.
- The financial future of the WWE stock hinges on the success of the Network.
More on the Network
The WWE’s Powerpoint Presentation goes into great detail of how the company believes that there is a need for WWE content. It also provided analysis that the value of content is expected to rise overall. This is premised upon network advertising and consumer paid subscription revenue. Obviously, with the announcement of Fox Sports 1 launching late summer, this research can’t be all wrong.
Page 17 of the WWE’s Powerpoint Presentation offers the most interesting view of the company’s outlook on the impact a potential Network would have for the company. It lists 4 scenarios of “economic potential” of a domestic pay channel in a “steady state” after ramping up subscribers. The scenarios estimate revenues for the company assuming a steady subscriber base. The WWE states that “[u]ntil a base of approximately 1 million subscribers is achieved, the network would represent a net investment for WWE.” What this means is that the WWE would be losing money if it does not have a steady base of 1M subscribers.
Is it possible that the WWE could attain this goal or will this network investment turn into the XFL? The network would be offering its PPVs (except Wrestlemania) which would offer some appeal (although it would cannibalize the PPV revenue). The WWE has been successful in licensing its content with Hulu and YouTube so there is some demand but will it be enough to sustain a full network.
DirecTV survey about WWE Network
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)
Payout Perspective:
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.
The Pro Wrestling Post – 02.07.13 edition
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.
The Wrestling Post – Lesnar renews contract with WWE
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)
The Wrestling Post – Cena returns to Fruity Pebbles box
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.
