April 18, 2014
Welcome to another edition of The Wrestling Post. In this edition we write about a new PPV announced, DirecTV plays hard ball and the latest ratings from Total Divas.
Ring of Honor tries PPV Sunday June 22nd
This week Ring of Honor announced that it would be holding its first PPV ever for the company Sunday, June 22nd.
Notably, the ROH PPV is the same weekend as Glory’s first PPV and a week after TNA Wrestling’s PPV, Slammiversary. ROH had previously put on iPPVs with some noted difficulties.
The Sinclair Broadcasting-owned ROH have expanded its reach with its weekly show as more affiliates carry ROH. Of course, it’s at 1:00 am on Friday night here in Seattle so you can still DVR the show. Hopefully promotion of the PPV will attract fans to buy the PPV.
Payout Take: The PPV can be seen as ROH capitalizing on the WWE popularity and its champion – Daniel Bryan worked Ring of Honor for some time. 104,000 buys is the unofficial number of ECW’s very first PPV – Barely Legal in 1997. We shall see if ROH can do better in 2014. ROH has more financial backing and should put on more of a polished product. Obviously PPV has evolved since the late 1990s and we will see which satellite/cable companies pick up the PPV but it will be an interesting comparison.
DirecTV drops WWE PPVs
Earlier this week, DirecTV announced that it would no longer offer WWE PPVs to its subscribers per PW Torch. WWE did release a statement acknowledging the move by the satellite company. “Yes, DIRECTV has decided to stop offering our PPV’s residentially and commercially. The only other option would be to work through the local cable provider.”
DirecTV did leave an out that it may return to carrying WWE PPVs. You may recall that the Dish Network first announced that it would no longer carry the company’s PPVs since it launched its digital network. However, the distributor changed its mind and carried Wrestlemania XXX. The domestic buys for Wrestlemania XXX, the first PPV carried on the WWE Network, drew 400,000 purchases.
Payout Take: While the WWE is hoping for the success of its network, it still seeks its distributors to continue to carry its PPV. Distributors such as DTV and Dish saw this as a direct hit against its profits from the WWE PPVs. We all knew that the WWE Network would cannibalize its PPV profits but would benefit the WWE bottom line in the long run. We will see whether DTV stands it ground. It has played hard ball in the past. One need only look at the acrimonious negotiations between DTV and the Pac 12 Network and The Weather Channel to see it doesn’t back down.
Total Divas ratings
Episode 4 for the second season of Total Divas on E! scored 1.164 million viewers for a 0.5 rating among adults 18-49 according to Television By Numbers. The episode was the first in two weeks having taken off for Wrestlemania XXX Sunday.
The 1.164 million is the second-lowest rating this season for the reality show. This season’s average is at 1.26 million viewers.
April 15, 2014
After the successful debut of Wrestlemania 30 on WWE’s Digital Network last week, WWE announced today taht the event did a record 1 million U.S. household reach along with PPV buys for the event.
STAMFORD, Conn., April 15, 2014 – WWE® (NYSE: WWE) today announced that WrestleMania 30 reached a record 1 million households in the U.S. alone on WWE Network and pay-per-view combined, the first time WrestleMania has eclipsed this mark domestically. With more than 667,000 WWE Network subscribers in the U.S. and nearly 400,000 domestic pay-per-view buying homes for WrestleMania 30, WWE is confident that it will reach its goal of 1 million subscribers by the end of 2014.
WWE Network launched on February 24 in the U.S. and successfully streamed six hours of live coverage of WrestleMania 30 on Sunday, April 6. Additionally, more than 7.1 million hours of video content was viewed on WWE Network during WrestleMania Week from Tuesday, April 1 through Tuesday, April 8.
WWE Network will be rolled out in Canada, the U.K., Australia, New Zealand, Singapore, Hong Kong and the Nordics in late 2014/early 2015.
If you add up the WWE Network subscribers (667,000) plus the number of Wrestlemania PPV buys (400,000), the total reach for the event results in 1.067M domestic households that purchased the event. The PPV price for a Wrestlemania event is $59.95. It’s no coincidence that the 6-month WWE Network subscription price is $9.99 with a 6 month commitment, which is $59.94, or roughly the exact same price as the Wrestlemania PPV. By doing so, the WWE can announce that they domestically sold 1.067M PPV buys for the event, which is an impressive number. Once you add up international PPV buys, and in the future, international WWE Network subscribers, the number could substantially grow.
All the work that the WWE is doing in terms of their digital network co-inciding with the PPV model is interesting to watch. Dish and a few other cable/dish PPV carriers have not been too thrilled about the WWE’s decision to start their own digital network and offer their PPV’s as well. At this point in time, it was a big win for the WWE to keep the cable and satellite companies still offering the event as a PPV. The UFC and boxing promoters will be watching this venture closely as they observe whether WWE’s new business model is sustainable. A big part of that if WWE’s hope that they can increase their WWE Network subscription base from 667,000 to 1 million by the end of the year.
April 10, 2014
Welcome to a special look at Wrestlemania XXX which took place at the Superdome in New Orleans, Louisiana.
Ultimate Warrior passes away
Perhaps the news of the death of Jim Hellwig (aka The Ultimate Warrior) has overshadowed the post-Wrestlemania news. Hellwig was inducted into the WWE Hall of Fame, made an appearance at Wrestlemania, signed a deal to be an “ambassador” for the WWE and appeared on television on the company’s signature show, Monday Night Raw. News broke late Tuesday night that he passed away in Arizona.
Similar to the passing of Randy Savage, the outpouring of condolences for the death of The Ultimate Warrior likely brought back fond memories of a person’s childhood for many that grew up watching him.
Attendance and gate
According to a WWE press release, it was a sellout with a gate of $10.9 million with 75,167 in attendance. Sunday’s event landed 5th in all-time Wrestlemania attendance.
For those in attendance, it may have been easier for fans to obtain unauthorized WWE merchandise as a Louisiana District Court denied the WWE’s motion to stop and confiscate bootleg merchandise from being sold in the area. An order like this is usually allowed as a way to protect the intellectual property of the company. However, the court decided it could not legally give the WWE this broad authority without identifying these potential infringers more specifically.
Don’t bet on pro wrestling
While we won’t necessarily get into the storylines from the night, it should be noted that The Undertaker’s win streak of 21 consecutive wins at Wrestlemania was broken by former UFC Heavyweight champion Brock Lesnar. While this was scripted, a gambling web site lost money on the fight as it expected that the WWE would not let the Undertaker lose. Fox Sports reported that the odds ranged from 14 to 1 and 8 to 1 for Lesnar to prevail. The maximum bet was $100 although some people were allowed to bet “as much as $500 on Lesnar.”
UFC hypes Lesnar
Not only was Brock Lesnar a part of Wrestlemania, but the UFC took advantage of the hype of the event by having the Rock (below), Jim Ross and Steve Austin talk about the former UFC Heavyweight champion. All of the videos were “Fight Pass Exclusives.”
WWE stock takes a hit
The day after Wrestlemania, the WWE announced its subscribers for the network. To the dismay of investors, it announced it had slightly over 667,000 subscribers which were below Wall Street expectations. While the WWE believes it will hit 1 million by the end of the year (the break-even point for the network), the stock fell almost 20% on Monday. At the end of trading Thursday, it is down to $21.12.
The WWE received a lot of mainstream hype for the 30th edition of the biggest professional wrestling event of the year. Most of this was focused on the new network and how it would fare airing such a heavily watched event. To its credit, the video stream had no noticeable hiccups which were a good sign for the future of the product. The question will be whether the negotiations for its rights deal will be affected in any way.
Payout Take: Although the stock is taking a drop, the broader takeaway from the event was that it did not suffer any tech issues which was a major concern considering the amount of problems it had when it first launched in late February. At least this shows that the product holds up. The next big test for the company is a rights fee deal which is anticipated to occur sometime late April/early May.
April 7, 2014
WWE announced in a press release this morning that it has 667,287 subscribers to its network which launched this past February and “is well on its way to reaching its goal of 1 million subscribers by the end of 2014.”
UPDATED 9:05am PT – 4/7/14: It looks like that investors are not impressed with the 667K numbers according to Deadline.com and the sell off is more than just investors capitalizing on the stock price. Deadline states that at least one analyst predicted the sub number to be between 500K-800K on Friday. The original expectation was that it was to be at 1M after Sunday’s big event.
The press release comes just one day after Wrestlemania 30 aired without major tech issues on its network. The news appears positive for the company long term although short term WWE stock is taking a hit. In morning trading Monday, the stock is down almost $4 as it appears that many investors are selling off the stock.
The WWE also announced that it broke the record for the Superdome (Mercedez-Benz or Silverdome if you are Hulk Hogan) as its highest grossing entertainment event for the venue. The announced attendance was 75,167 for a gate of $10.9 million.
UPDATE: It looks like Wall Street is not impressed with the 667K announcement as it expected a higher number of subscribers. The stock is taking a big hit as shares have gone done at least 20% today. We will see how this number is spun as the WWE is set to announce a new rights fee agreement in the coming weeks.
The network announcement for its subscribers should be seen as a success as there were many concerned about tech issues that would scare many away. However, there were few reported glitches on any platform for yesterday’s big event despite the fact it was likely the most watched day for the network as most WWE subscribers and many curious non-wrestling fans tuned in to see it. Looking at this strategically, the timing of the announcement makes sense since one would think many signed up close to Wrestlemania to take advantage of the streaming as opposed to paying $70 on PPV.
The real test will be how (and if) the WWE can retain these subscribers. Wrestlemania was the big carrot for the network this year and realistically a one-time thing. How will the WWE continue to grow its subscribers to reach 1 million?
Based on this information, can we assume that UFC Fight Pass is having similar success? While the UFC will not release any information, the speculation is that it is doing well with its digital network and since it is now available for international fans, it probably continues to grow its subscriber base.
April 3, 2014
According to the Hollywood Reporter, the U.S. District Court for the Eastern District of Louisiana denied the WWE’s request for a temporary restraining order granting the sports and entertainment company the opportunity to protect it from anticipated bootleggers that will sell unauthorized and infringing merchandise at Wrestlemania, the biggest weekend in the company’s year.
Judge Helen Berrigan issued the ruling which reasoned that since the WWE could not name the potential infringers (the lawsuit was filed against John Does) or at least provide some information, it could not grant the WWE the authority as a “judicial imprimatur” to determine “when and from whom seizure (of alleged infringing goods) is appropriate.”
The WWE requested, like other leagues and touring music acts have done in the past, for a Court order granting it the ability to stop and seize unauthorized vendors selling unlicensed merchandise which infringes on one’s licensed trademarks. Many fans of the WWE are in New Orleans for the 30th edition of the WWE’s Super Bowl. It’s the biggest event of the year for the company and its expected that there will be bootleggers selling counterfeit WWE goods.
While Judge Berrigan sympathized with the WWE and acknowledged the unenviable position it was in as a company which knows a wrong will happen but cannot tell the Court anything more than this, the Court could not grant it the relief it sought.
Judge Berrigan certified her ruling for interlocutory appeal which is an appeal of a ruling by a trial court that is made before the resolution of the claims. According to the THR article, the WWE has filed a motion for reconsideration. But, this motion will likely be heard by Judge Berrigan once again and unless there is something that was not brought up in the original WWE motion, it’s unlikely to succeed.
So, the WWE may still file the interlocutory appeal but this would have to happen now (the rules state it has 10 days but since Wrestlemania occurs this Sunday it’s now or never.)
The overarching legal issue is that the Court would not grant the WWE the right to enforce its trademark by allowing it the right to go around and stop non-licensed vendors and confiscate their merchandise. This was due the fact that it could not specify or identify the potential bootleggers. To give an example of how much may be lost; investigators on behalf of the NFL seized $21.6 million in counterfeit NFL merchandise at this year’s Super Bowl. The WWE claimed that their merchandise sales are “expected to be at least $19 million” per THR. The WWE is not the NFL but this should give one a snapshot of how much may be at stake. We will see what legal move the WWE does next but this ruling may be of concern for other big events where opportunists will try to make money selling counterfeit merchandise.
March 26, 2014
Forbes.com posted an article which features WWE chairman and CEO Vince McMahon. The article boasts the achievements of McMahon while cautioning about the risks of the WWE Network.
The article, written by Lifestyle editor Michael Solomon, is an overall positive piece on the McMahon success story. The piece highlights the company’s big investment in the network which is underscored by the fact that revenues “have barely budged (remaining at $500 million since 08) over the last few years.” This may be due to the $75 million it has reportedly spent on setting up the WWE Network. It also writes about the company’s failed attempt to establish its network as a “premium” channel to be distributed on the network. The Forbes.com piece spins this in the positive for the WWE and mostly everyone has bought into the“over the top” strategy of the network.
As it is currently set up, the network needs 1 million subscribers to break even. At 2 million subscribers, it projects adding $50 million to its EBITDA. The first numbers on the network will come out after Wrestlemania.
Due to the network, the WWE has cannibalized its PPV business which will change how the company will do business. The shift has drawn the ire of DirecTV and Dish Network. DirecTV had some harsh words for the WWE and Dish Network actually told its subscribers that it would not carry Wrestlemania XXX this April 6th. However, it has since backtracked on its stance and will now carry the show.
The article will be published in the print edition of Forbes the week leading up to Wrestlemania Sunday giving it a prime PR piece leading up to its biggest event of the year.
Television by Numbers reports the second episode of Total Divas (9pm ET/6pm PT) scored a viewer average of 1.28 million viewers on Sunday night. Thus, it did better than the last hour (936K average) of UFC Fight Night 36 although the last quarter hour featuring Rua-Hendo did 1.25 million.
Last week the WWE and Mattel, Inc. announced new kids property called WWE Slam City. In addition to merchandise, the WWE has launched a series featuring WWE characters which appears on WWESlamCity.com, YouTube and its Network. The obvious hope is that this property will facilitate continued growth in its consumer products division.
March 5, 2014
Welcome to another edition of The Wrestling Post. In this post we look at WWE stock, the net worth of Vince McMahon and a move in programming for the WWE Network.
WWE Stock at all-time high
Despite the rocky start to its network launch, WWE stock is trading at an all-time high. The stock price went up as high as $27.43 on Wednesday and was at $27.10 in after-hours trading.
Payout Take: The buzz around the WWE Network and the anticipated media rights deal has investors seeing value in the company. There are some that have been displeased with the network due to the many glitches during the first week but the WWE has done a good job in quelling the uprising of negative reviews and for the most part the tech issues have been addressed. This spring will be the biggest in the company’s history as its rights fee deal will likely occur sometime in April and it will reveal the first set of subscriptions numbers for the network. Both will be key indicators for the stock in 2014.
Vince McMahon is a billionaire
Forbes.com came out with a list of “notable newcomers” of billionaires based on net worth for 2014. WWE CEO Vince McMahon made the list with a net worth of $1.2 billion. Forbes.com describes McMahon’s source of wealth as the WWE and states, “…transformed the World Wrestling Federation from a regional operation into an international phenomenon. WWE went public in 1999 and today its programs are broadcast in nearly 150 countries and more than 30 languages.” McMahon returns to the list as his net worth had dipped in 2012-2013.
Other newcomers to the billionaire club include Michael Kors, Drew Houston (Dropbox founder) and Brian Acton (WhatsApp founder who was turned down by Facebook for a job. Four years later Facebook paid him $3 billion for his company).
Payout Take: With the WWE’s stock at all-time highs, the hopes of the potential Network revenues and an anticipated rights fee deal this spring that should double (if not more), McMahon’s wealth will only go up in the near future.
February 26, 2014
On Monday the WWE launched its much heralded Network which it advertised to be available on almost every platform imaginable. The good news is that number of those signing up exceeded expectations. The bad news is that it is experiencing technical difficulties across most platforms.
The WWE’s technological partner in the venture, MLB Advanced Media, indicated that it had not expected the demand it has received from people signing up. The WWE released a statement Monday regarding the issues upon signing up and the subsequent technical issues subscribers found once they were able to attain access.
MLBAM, WWE’s tech partner, was overwhelmed and its systems have been unable to process most orders since 9 am due to demand for WWE Network.
— WWE Network (@WWENetwork) February 24, 2014
The WWE also stated that MLBAM was aggressively working to resolve the matter on Monday morning. Although not directly, the WWE inferred that the fault lay with MLBAM for the tech issues. At least, that’s how it is being interpreted in the press. One would think that a part of this has to do with the one week free trial. Even as of Wednesday, there are still problems with logging in.
We are working to fix log-in issues on the @WWENetwork application that are effecting viewers with accounts created in the last 24 hours.
— WWE Network (@WWENetwork) February 26, 2014
In my own experience, I was able to sign up at 6:01 a.m. on Monday via PC, one minute after the promoted launch, but was only able to watch last year’s Wrestlemania in the first hour. I was not able to go through the library until mid-morning. Later that day, the stream was fine for me on the PC but I experienced issues on my iPad. Notably, I have experienced more buffering issues on the PC on Tuesday night and today.
Certainly, these issues are being worked on but the technical issues are a concern for the WWE going forward since its heavy investment in the product. The WWE and MLB Advanced Media must make the fixes soon. If the free trial ends with the problems persisting, its likely that the WWE will lose a lot of potential customers.
Tech issues were a given as to challenges facing this network. The question is how fast can the WWE and ML BAM fix them. If we are to spin this in a positive light, the overwhelming demand for the Network reflects the fact that its promotion of its product created a swell of interest. But, the tech issues could make folks concerned and they may decide not to subscribe if they feel that these issues will be an inherent part of being a subscriber.
February 17, 2014
Welcome to another edition of The Wrestling Post. In this post we talk about the looming WWE TV rights fee deal and a new toy deal for the company.
Exclusive rights period ends between WWE-NBC Universal
Friday was the last day for the exclusive negotiating period between the WWE and NBC Universal to come up with a deal for the WWE’s television rights. The WWE’s existing contract with NBCU ends this fall and the organization hopes to improve upon its current $139.5 million television licensing fees for its stable of WWE shows.
Although it identifies itself as a sports entertainment company, it hopes to score a television deal that mirrors some of the recent sports television rights fees contracts. The most recent sports rights fee deal had CBS earning the right to 8 NFL Thursday night games throughout the regular season for $250 million according to the NY Times. Notably, the NFL did not give up exclusivity as the games aired on CBS will also be available on the NFL Network. Many believe that the rights fee deal could rival the NASCAR deal which drew a total of $820 million over 10 years from Fox and NBC. Others believe that it may be able to double its current fees whish would still be a great improvement. WWE stock has gone up in the past month as it is trading in the $20 dollar range – a benchmark never seen by the company since it went public. This is due in part to the hedging that the rights deal will break the bank.
Payout Take: Losing exclusivity to deal with the WWE was a likely scenario as the WWE wants to field offers from others. We should see by the end of February where the WWE may land. It still could end up with NBCU but for a bigger price tag.
WWE-Mattel ink new deal
Variety reports that the WWE and Mattel have entered into 5 year agreement for Mattel to be the primary toymaker for the company. The agreement will go through 2019 and will encompass toys and video games.
Notably, the WWE obtained the trademark for CM Punk late last year for use in toys, action figures, dolls, etc. The WWE has had the use of the CM Punk mark for wrestling since 2009 and for use of clothing since 2011. It filed for the Daniel Bryan trademark for use with toys last week.
Payout Take: The deal is an example of how the WWE’s choice to more PG content has aided its business outside of the wrestling ring. Without the move to more family friendly content, it would not have landed Mattel. If you were wondering, if the rumors are true that CM Punk is gone from the WWE and Phil Brooks decides to wrestle again somewhere, he’d have to use his own name or else be subject to a lawsuit from the WWE.
February 8, 2014
Welcome to another edition of The Wrestling Post. In this post, we take a look at the WWE’s decision to release the Over The Edge PPV which included the accidental death of Owen Hart.
Many wrestling fans are anxiously anticipating the launch of the WWE Network which will occur on February 24th. This past week, the WWE released a list of the PPVs that will be made available to subscribers. Among the more than 400 PPV events from the past is the 1999 Over the Edge PPV which will live in infamy as the event where Owen Hart, dressed as his character at the time, The Blue Blazer, fell 70 feet to his death in the ring as a result of a harness malfunction. The accident, which did not occur on camera, caused controversy for how the WWE handled the situation. Rather than stop the event, it continued on despite not knowing of Hart’s condition.
The event has never been released on home video and there have never been any official showings and/or replays of the event. There is YouTube, but the WWE has never released the PPV via On Demand or DVD/Blu Ray release.
The WWE confirmed the release of the event on the network to a CBS affiliate in Pittsburgh (via Cageside Seats): “WWE Network will be airing the 1999 Over The Edge pay-per-view. However, portions of the event will be edited out of respect for Owen Hart.”
Payout Take: One of the reasons that this event, which was eerily ironically entitled, “Over the Edge,” has been sheltered away from public viewing was due to the lawsuit filed by the Hart family over the fall. I find the inclusion of this event an interesting decision by the WWE for the reason that it reminds people that despite the tragic accident that occurred, the company decided to continue on with the event. Even with the editing, it leaves the question of why put this on the network? Certainly, from a historic standpoint, it’s a part of the company’s history. Yet, why remind people of this terrible incident at the onset of its biggest venture?