White talks WWE, Mayweather on Arsenio

January 29, 2014

Dana White appeared on The Arsenio Hall show on Monday night and proceeded to call out the WWE and its new network.  White also took a jab at Floyd Mayweather.

Dana on WWE

Dana on Floyd in UFC

Payout Perspective:

White always seems to hold back on the criticism of Vince McMahon despite McMahon taking shots at the UFC and MMA in general.  Even here, he doesn’t go after Vince and his business unless you consider him calling followers of WWE fans of “male soap operas.”  Certainly, the two organizations will have two competing online services when the WWE Network goes live next month.  This may inhibit subscriptions to the UFC Fight Pass.  So, we may see a little more animosity between the two although White indicated that they were “cool” in the interview.  As for the Mayweather comments, this is nothing out of the ordinary.  White had called Mayweather a racist when he had made some comments about Jeremy Lin during the “Linsanity” era.

The Wrestling Post – 01.25.14

January 25, 2014

Welcome to another edition of The Wrestling Post.  In this edition we talk about WWE stock and an actual WWE Hall of Fame.

WWE stock hits 52 week high

On a day in which the Dow Jones U.S. Media Index fell nearly 2 %, the WWE stock hit a 52 week high and was up slightly at the close of trading on Friday.  WWE stock was as high as $21.05 and fell off slightly to $20.84.  Even at a company high, it is still listed as “Buy” by several research firms. Its current market cap is at 1.57B.

Payout Take:  Remember when you could have bought WWE stock for $12?  The positive press from the WWE’s upcoming network has helped raise the company profile.  But the stock gains may be attributed to the upcoming rights fee deal that will likely happen by the end of February.

NBCU sweetens deal with WWE Hall of Fame

Speaking of the WWE rights fee deal, NBCUniversal, seeking to retain the WWE is offering the company a Hall of Fame at its Universal Studios theme park in Orlando, Florida.  According to the New York Post, the Hall of Fame is part of a “final pitch” to Vince McMahon as its exclusive negotiating period ends February 1.

Payout Take:  The WWE rights fee deal will be something to watch next month.  While a Hall of Fame is nice, it will not substitute for the monetary value the WWE seeks for its signature franchises (i.e., Raw and Smackdown).

How does Court ruling on “Net Neutrality” relate to the WWE Network and UFC Fight Pass?

January 14, 2014

A District of Columbia Circuit Court ruled that the Federal Communications Commission (FCC) could not prohibit internet providers from blocking or discriminating against traffic to lawful websites.   The ruling which impacts “Open Internet” (aka net neutrality) may mean issues for the UFC Fight Pass and WWE Network in the future.

In Verizon v. Federal Communications Commission, the Court held that the FCC is not able to impose “anti-discrimination” and “anti-blocking” rules on Internet providers.  The Court ruled that, “…even though the Commission has general authority to regulate…it may not impose a requirement that contravenes express statutory mandates.  Given that the [Federal Communications] Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such.”

CNET breaks down the ruling:

In plain English, the court rejected Verizon’s argument that the FCC had overstepped its authority to regulate broadband access, instead acknowledging that the FCC has general authority to impose regulations on broadband and wireless service providers. But because the services these providers offer are classified differently from traditional telecommunication services, the justices reasoned in their decision that they are not subject to the same statutes, which guide the agency in forming its regulatory policies.

The general theory of “Net Neutrality” regulation is to keep a public right of way to access certain services.  As stated in the CNET article, for the internet, it means that the infrastructure used to deliver web pages, video and audio-streaming services is open to anyone accessing or delivering the content.  It would thus be illegal for an ISP to block a competitor’s internet traffic simply because they are competitors.  With the Court ruling, it would seem to imply that blocking competitors may be an option.

If you are a proponent of “net neutrality” what may happen as a result was recognized by the Court in its opinion:

“…broadband providers might prevent their end-user subscribers from accessing certain edge providers (those providing content (i.e. UFC and WWE)) altogether, or might degrade the quality of their end-user subscribers’ access to certain edge providers, either as a means of favoring their own competing content or services or to enable them to collect fees from certain edge providers.”

There was no immediate word whether there would be an appeal of this decision.

Payout Perspective:

So what does this mean from a combat sports perspective?  With the UFC Fight Pass and WWE Network relying heavily and essentially depending on internet streaming services in order for its services to be viable, we could see internet providers being able to regulate the bandwidth and streaming of these services.  ISP providers may affect UFC and WWE subscribers as identified in the Court opinion.  The UFC and WWE might have to “play ball” with these ISP providers in order to obtain the best access to the end-user.

With the ruling occurring today, it’s still too early to know what may happen but MMA Payout will keep you posted.

WWE Announces Network Details

January 8, 2014

The WWE announced the launch of its much-anticipated launch of its Network Wednesday night at the Wynn Hotel in Las Vegas as part of the Consumer Electronics Show occurring this week.  The details impressed most and many instantly compared the WWE Network with the UFC Fight Pass.

-The network will be $9.99 month requiring a 6 month commitment.

-All 12 live WWE PPVs including Wrestlemania (which was $70 alone on PPV last year) will be on the network.

-The launch officially occurs with the RAW post-show at 8:05pm PST on February 24th.

-Similar to the UFC Fight Pass, you will get a free trial period.  However, the WWE will give you just one week starting on the morning of February 24th at 6:00am PST.

-It looks like the complete WWE library will be available on-demand including past WWE, WCW and ECW PPVs.

-The network will also feature original content although Total Divas will likely stay on E! for now.

-The network will be available across almost all platforms including PS3, Xbox360, Roku, smartphones, desktops and laptops.

-MLB Advanced Media will operate the network as well as provide tech support.  MLBAM also distributes all of ESPN’s online video and March Madness live games for Turner and CBS.  This is in addition to what it does for MLB.

-The network will not be available around the world although it is scheduled to launch in the UK, Canada, Australia, New Zealand, Singapore, Hong Kong and the Nordics by the end of the year, early 2015.

(H/t: The Wrestling Observer)

Payout Perspective:

It’s safe to say that tonight’s announcement will turn out better than the XFL.

The WWE estimates between 800K to 1 Million subscribers to break even on this endeavor according to The Wrestling Observer.  According to the LA Times, the WWE has spent over $40 million in the development of the network.  There are many big things with this announcement.  The first is the variety of platforms it will be available on.  This will allow fans the opportunity to choose the platform they possess or desire to use for access to the WWE Network.  The second is that all WWE PPVs, including Wrestlemania, will be on the Network.  This is huge although many believed that this is where WWE PPVs were heading.  The PPV buys for most of its B-scale PPVs were doing so-so numbers.  However, many believed Wrestlemania would be left off the network because it did the best in PPV sales annually.  Perhaps the decision to include it in the Network is that it would attract more subscribers, something it needs to break even here.

The $9.99 per month fee seems to be the consumer sweet spot.  It’s not the price of an HBO or Showtime which may have soured fans.   The six month commitment does not seem to bother anyone at this point but we will see how retention goes after the first year.

All in all if the WWE delivers February 24th, the many delays will have been worth it.  More than just sports-entertainment fans will take notice of this venture.  It’s another step in the direction of over-the-top content as a way around the traditional cable and satellite distributors.

In after-hours trading, WWE stock is up slightly to $16.35.  The stock is at an all-time high at this point and the company is looking up as it goes into its bid for a new rights fee deal.

Obviously many have immediately compared this to the UFC Fight Pass.  While there was an initial buzz for the Fight Pass, the Network now overshadows the UFC’s offering and for those that are fans of both we may see a competition between the two over which company gets their $9.99 per month.

The Wrestling Post – 01.03.14 Edition

January 3, 2014

Welcome to the first edition of The Wrestling Post for 2014.  But before we dive into this year, there are a couple issues to follow up from 2013.

WWE shopping rights fees

Last month, Variety wrote an in-depth article on the WWE’s mission to seek out a rights fees deal for its product this year.  Its existing deal with NBC Universal (the owners of the USA and SyFy Networks) is set to expire and WWE hopes to improve on its $139.5 million it receives in TV licensing fees and align itself with the deals from the NBA, NHL and NASCAR.  Notably, NASCAR’s deal with NBC and Fox is worth $820 million a year.  The NBA’s deal is not up for a year although it is prospecting this year for a new deal with Adam Silver taking over as Commissioner on February 1st.

The WWE has been waiting for this moment for some time having aligned all of its properties to be sold as a package.  And while it sees itself as an “entertainment-based” company, it hopes that its rights fees are comparable to sports properties.  The WWE’s contention is that its television shows, “RAW” on USA and “Smackdown” on SyFy are as attractive as sports properties that have been driven up due in part to the access to a target male demo and its “DVR-proof.”  In addition to its male demos, 44% of fans are under 34 which appeal to advertisers.

According to the Variety article, negotiations and bids can take place until Feb. 15.  At the time, NBCU can accept or reject WWE’s final offer with other bids by the 28th of February.  The WWE will be selecting by March 4th.

Payout Take:  Will the UFC be taking notes from the WWE?  It may be too early to determine whether the UFC will command value when its deal is up with Fox but the WWE’s rights will be a unique acquisition.  Coupled that with the upcoming WWE Network, we will see what 2014 will hold for the company.  At the end of 2013, investors seem to think, that the company is going in the right direction.

Total Divas ends second half of first season

One of the surprises of 2013 was how well WWE’s Total Divas was received by audiences.  The season finale on December 15th received an average viewership of 1.29 million viewers.

Episode 9:  1.25

Episode 10: 1.41

Episode 11:  0.92

Episode 12:  1.44

Episode 13: 1.20

Episode 14: 1.29

Payout Take:  The second half of the first season came to an average of 1.25 million viewers.  Total Divas will have a second season and its likely this will be an ongoing franchise for some time to come.

The Wrestling Post – 12.10.13

December 10, 2013

Welcome to another edition of The Wrestling Post.  This week we take a look at the location of the next two Wrestlemanias as well as the latest ratings from Total Divas.

Wrestlemania 31 in Bay Area

The WWE announced that Wrestlemania 31 will take place at Levi’s Stadium in Santa Clara, California in March 2015.   Levi’s Stadium is still under construction and is estimated to open August 2014.  It will be the permanent home of the San Francisco 49ers.  The stadium’s capacity is set for 68,500 but could be expandable to 75,000.

The NFL has committed Super Bowl L in 2016 (L is the Roman Numeral for 50) to the site.

Wrestlemania has been an economic boon for the cities that host it.  Aside from the event itself, there are week-long activities which bring in thousands of WWE fans to the city.  The WWE announced that New Jersey received an economic impact of $101.2 million received from non-locals spending that were visiting specifically from Wrestlemania 29.

For those wondering, Wrestlemania 30 is in New Orleans this year and Wrestlemania 32 will be held at Cowboys Stadium although no official announcement has been made.

Payout Take:  Cities clamor to host the WWE’s biggest event of the year.  Certainly the hospitality industry does well during Wrestlemania week and the reported economic impact is something that every city desires.  The WWE’s announcement makes sense as Levi’s Stadium will be less than a year old with enough capacity and a healthy surrounding region to support the event.

Total Divas drop to 1.2 million viewers this week

This week’s Total Divas episode this past Sunday was down as it received only 1.2 million viewers according to The Wrestling Observer (subscription recommended).  The ratings may have taken a slide due to the lack of lead-in since “Keeping up with the Kardashians” season ended.

Payout Take:  The ratings for the second half of the first season are as follows via TV By the Numbers:

Episode 9:  1.25

Episode 10: 1.41

Episode 11:  0.92

Episode 12:  1.44

Episode 13: 1.20

Even though last week’s ratings have dipped, its overall ratings have been pleasing and a second season is on its way.  The season finale airs December 15th.

The Wrestling Post – 11.28.13

November 28, 2013

Welcome to another edition of The Wrestling Post.  In this edition we talk Total Divas renewal and TNA’s new television deals.

Total Divas renewed for second season

With the ratings success of Total Divas, it was given an extended first season and now comes news that it will be given a second season.

Via Variety:

“Total Divas” has averaged 1.4 million total viewers since its summer debut, making it one of E!’s most promising new entries and a strong performer on Sunday nights in the 18-34 demo. From WWE and Bunim-Murray Prods., series centers on the lives of femme WWE stars both inside and outside of the ring.

Total Divas ratings took a step back this week with the first rating under 1 million viewers this past week but this may be due in part to the NFL (Broncos-Patriots) and the company’s own PPV, Survivor Series.

Payout Take:  The reality show was one of three new reality shows the network announced as returning for another season.  It received an optimum amount of push by the WWE (with promotion during its programming) and by E! as its primary lead-in was the network’s highest rated show, “Keeping Up With the Kardashians.”

TNA Wrestling forges TV agreement in Japan and Australia      

TNA Wrestling announced an agreement with the Nippon Television Network Corporation.  TNA Impact Wrestling will be seen every Saturday and PPVs will be shown monthly.  In addition, it has signed a two-year deal with Fuel TV Australia.  In addition to the weekly program in Australia, TNA will introduce shoulder programming to complement TNA in Australia.

Payout Take:  The agreements abroad appear to be ways to expand the TNA brand and maybe keep the company afloat amidst rumors of its financial trouble. On another note, Sports Illustrated featured TNA’s head Dixie Carter in an interesting read about how her family decided to purchase a majority interest in the company.

The Wrestling Post: 11.20.13

November 20, 2013

Welcome to another edition of The Wrestling Post.  This time we take a look at Wrestlemania’s economic impact on New Jersey and this week’s Total Divas ratings.

New Jersey Receives Economic Impact of $101.2M from Wrestlemania

The WWE and New Jersey Governor Chris Christie announced that this year’s Wrestlemania 29 taking place at Met Life Stadium provided a $101.2 million economic impact to the region according to a study.  Its the second straight year that the WWE has provided such a strong economic boost for its host city.

Via press release:

“On behalf of the great state of New Jersey, we thank all of WWE’s devoted fans who descended on our region from all over the world to be a part of WrestleMania,” said Governor Chris Christie. “The entire week of events helped generate a tremendous boost for our economy, and we look forward to the possibility of MetLife Stadium hosting a future WrestleMania.”

A capacity crowd of 80,676 fans from all 50 states and 34 countries attended WWE’s pop-culture extravaganza this past April, making it the highest grossing entertainment event at MetLife Stadium. Key highlights from the study include:

  • $101.2 million of direct, indirect and induced impact derived from spending by non-locals visiting specifically for WrestleMania 29.

  • 54% of fans that attended WrestleMania were from outside the New York/New Jersey area and stayed an average of four nights.

  • The economic impact derived from WrestleMania Week was equal to the creation of 943 full-time jobs for the area.

  • $5.2 million was spent by non-locals at New Jersey and New York restaurants.

Payout Take:   Regardless of what you may think of professional wrestling, the money the WWE generates from its annual event, Wrestlemania, brings in tremendous amounts of real money.  This is the reason why you see cities vying for the right to host the event.  The amount of people traveling to the event from around the world is a testament to the WWE and its brand.  It also is a boon for the hospitality industry in the region.

Total Divas 2nd Episode Up in Return

Television By Numbers reports that WWE’s Total Divas scored an average viewership of 1.4 million viewers.  The show which airs on Sundays at 7 p.m. PT/10 p.m. ET improves from last week’s 1.3 million average.

Via Television By Numbers:

  • E!’s “Total Divas” on Sunday, November 17 from 10-11pm scored the series’ best episode since September 1 across nearly all demos including P18-49 (903,000), W18-49 (558,000), M18-49 (346,000), P18-34 (537,000), W18-34 (363,000), Total Viewers (1.4 Million) and HH (1.0 Million).

  • The show also grew week-to-week across all demos including P18-49 (+21%), W18-49 (+12%), M18-49 (+40%), P18-34 (+3%), W18-34 (+1%), M18-34 (+7%), Total Viewers (+12%) and HH (+11%).

Payout Take:  The interesting takeaway is that the series which mainly drew from a woman audience is not picking up males 18-49 (up 40% this week).  This week occurred without the network’s top show, “Keeping Up with the Kardashians.”  Despite what you may think about the show, it is drawing.

The Wrestling Post – 11.11.13

November 11, 2013

Welcome to another edition of The Wrestling Post.  This time we take a look at the second half of the first season of the WWE’s Total Divas on E! television.

Picking up from where it first stated WWE’s Total Divas scored a respectable 1.3 million viewers and 746,000 viewers in the 18-49 demo according to a press release from E!

Via E!’s press release:

The fall premiere of “Total Divas” also surged past its mid-season finale on September 15 across all key demos including Adults 18-49 (+10%), Women 18-49 (+16%), Adults 18-34 (+26%), Women 18-34 (+27%), Total Viewers (+21%) and Households (+20%).

The lead-in, “Keeping Up With The Kardashians,” scored 2.3 million total viewers and 1.6 million viewers in the 18-49 category.

Payout Perspective:

Despite a 1 million viewer drop from its lead-in, you could consider the return of the WWE reality show about its women wrestlers a success.  The previous average (1.37M) is on par with Sunday night’s new show.  It will be interesting to see how the second part of the first season goes.  The WWE and E! are pleasantly surprised with its success.  The amount of women watching the show is interesting as it appears that people are watching the show not based on the pro wrestling tie-in but based on the characters.

The Wrestling Post: WWE Third Quarter Earnings

November 4, 2013

Welcome to another edition of The Wrestling Post.  This time we take a look at the third quarter earnings for the WWE.

For the quarter that ended on September 30, 2013, revenues for the WWE increased $9.1 million.  However, this was offset by an impairment charge based on losses from its movie division.

Notably, Summerslam PPV buys were down from the previous year.  In 2012, the annual event in Los Angeles did 358,000 PPV buys.  But this year with Daniel Bryan in the main event, it only drew 296,000 PPV buys.  PPV revenue was down 10% from the 3rd quarter last year due in part to the poor Summerslam numbers.  Vince McMahon inferred that this year’s Summerslam was not an attraction fans wanted to see.  This could be a direct jab at Bryan.

On the plus side, TV rights fees increased 30% from last year from $34M to $44.1M.  There is an expectation that the WWE will broker new television deals by April 2014.  The U.S., U.K. and India deals for Raw and Smackdown are due and the company feels it’s positioned to be an attractive property for networks. During the Thursday teleconference, it mentioned the recent NASCAR/NBC Sports deal.  While the NASCAR/NBC Sports terms were not disclosed, the 10 year pact is said to be around $4 billion.  Previously, ESPN and TNT paid a combined $2.8 billion over 8 years.  Its likely the WWE would like a deal in this neighborhood.

Other notable information from the third quarter earnings:

-          The WWE is starting a John Cena apparel line to be sold at K-Mart.

-          PPV events are now being offered on Microsoft’s Xbox Live and on the Sony Playstation 3.

-          THQ’s video game, WWE ’13 saw sales of units drop over the prior year quarter.

-          Analysts seem optimistic about the potential future earnings based on the TV rights deal and the WWE Network.

-          Capital expenditures for 2013 included replacement of a corporate jet.

Payout Take:

Although there was no announcement about a WWE Network, it was reported that Stephanie McMahon did an interview with Broadcast & Cable and listed a launch for the network during the first quarter in 2014. This might be optimism more than reality as nothing specific came up during the earnings call.  What was of significance was the success of the E! reality TV series featuring the ladies of WWE, “Total Divas.”  It was so well-received that it earned another round of shows starting this month.  Also, the potential for a blockbuster rights fee deal is just around the corner which may have some analysts/investors interested on the WWE stock.  It would be interesting to see if the WWE does not get what it wants in terms of a deal from NBC Universal (owners of the USA Network) and shops around.  There is always the speculation that Fox Sports may jump into the mix for the WWE to give its new networks a jolt.  Of course, this is mere speculation here but that scenario could mean an instant influx of viewership.  It would also mean an astronomical monetary deal.

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