August 5, 2013
Welcome to another edition of The Wrestling Post. This time we take a look at the WWE earnings call for its second quarter.
The WWE did not meet Wall Street’s forecasts but delivered a profit. For the quarter ending June 30, 2013, total revenues for the WWE increased $10.7 million up 8% from this time last year. The increased production and licensing of television content along with the ticket revenue from Wrestlemania 29 contributed to this year’s quarter increase. Moreover, the third hour of Monday Night Raw, Main Event and Saturday Morning Slam contributed to the revenues this quarter.
Conversely, operating income declined in the quarter as a result of “talent expenses” (i.e., paying for The Rock and Brock Lesnar). In addition, the WWE’s new strategic initiatives contributed to the cut in the profits as the big ticket item this quarter was the opening of a state of the art training facility in Orlando, Florida. The 26,000 square-foot training center cost the WWE $3.5 million.
PPV business was down which the WWE attributed to one less PPV during Q2. It should be noted that estimates for Wrestlemania 29 have been trending lower than expected. In fact, it was recalibrated to 1,039,000 PPV buys which is lower than the 1.2 million PPV buys from Wrestlemania 28. According to the presentation, the PPV profits were down $9.7 million from last year. So, while the attendance and gate were records, the PPV business did not live up to its expectations.
WWE Studios actually accounted for $1.5 million to its overall revenue. The much maligned division made $2.1 million in revenue as opposed to $0.6 million in 2012.
Also, still no word on when the WWE Network may launch.
This quarter’s earnings showed the company’s strength is its television shows. It also showed that it is willing to spend money to make money. The WWE Network is still out there and the company continues to spend money toward its launch someday. The building of a state of the art training facility reflects a big investment in training a next generation of sports entertainers. The question is whether these investments will see a return and when.
The Wrestlemania PPV buys are disappointing considering the amount of money it spent on talent and production. We should note that this was the first time the WWE raised its PPV price point to $70 for HD.
July 31, 2013
We have updated ratings for last week’s Fight Master episode, this past Saturday’s UFC on Fox 8 and WWE Divas. While Fight Master’s DVR +3 rating and UFC on Fox 8 updated ratings boosted the numbers respectively, the debut of E!’s new reality show about the WWE women did well.
Updated Fight Master DVR +3 ratings for Episode 5 raised its ratings from 441,000 to 498,000. Even with the additional days for viewers to watch, it did not do too much to raise the rating.
According to the Wrestling Observer (subscription required), UFC on Fox 8 received a final share of 1.5 and 2.384 million viewers which was down 32% from April’s UFC on Fox 7. This boosts the final number from a 0.9 share/2.04 million and the initial report that it was down 40% from April.
The WWE reality show about its women wrestlers which made its debut on E! television Sunday (and was rerun after RAW on Monday) had an impressive 1.3 million viewer average. The one hour show was heavily promoted by E! and the WWE.
Via Hollywood Reporter:
The 10 p.m. broadcast of Total Divas took in 885,000 adults 18-49 and a 1.1 rating among households, making it the most watched premiere since Married to Jonas last August. This comes on the heels of lackluster launches for other Sunday fare such as What Would Ryan Lochte Do? and The Wanted Life.
WWE Divas has been given every chance to succeed. It had E!’s biggest show, Keeping up with the Kardashians, as its lead-in and although it lost more than half of the Kardashian viewership (Kardashians had 2.8M viewers), it is in an advantageous spot. A rerun of the show did 700,000 viewers (500K of those in the 18-49 target demo).
The Fight Master updated ratings may be concern since it did not pick up many people that would have recorded the show for future viewing. In its fifth episode, one would have hoped it would have built somewhat of a base. As we indicated before, the UFC on Fox 8 rating was due to the card and the ratings (and attendance) reflected this. Finally, the WWE Divas show was a surprising success. An hour for relative unknowns, it will have to rely on a heavy base of young males.
May 30, 2013
Variety reports that the WWE and Warner Bros. have teamed to produce a WWE-themed Flintstones cartoon movie. The movie will go straight to home video but will be released in early 2015 featuring WWE superstars in Flintstone-like roles.
Vince McMahon, John Cena and C.M. Punk are some of the characters that will be featured in the film which will be produced by Warner Bros. Animation and WWE Studios. WWE will work the promotional end by talking it up on its multitude of shows on TV and online. Warner Bros. will be distributing the movie.
The Flintstones is the second cartoon to be given a WWE twist as “Scooby Doo” featuring WWE Superstars will be distributed sometime before Wrestlemania 30 in March 2014.
The article touches on The Rock ripping John Cena for wearing brightly colored clothes and calling him “Fruity Pebbles.” The WWE used this to develop a partnership with Post Cereals and Cena was on the cereal box of Fruity Pebbles. It shows the resourcefulness of the WWE and its ability to connect with brands and forging partnerships. For the WWE, the inroads with a family friendly sponsor (Post Cereals) assisted it to pitch this collaboration with Warner Bros. It allows the company to reach out to a kid-centric, family demographic it desires and it could also bolster a film division that continues to lag behind the rest of WWE business. For Warner Bros., it sees the WWE as infusing a fresh look into an aging brand (i.e. The Flintstones).
May 27, 2013
Figure Four Online reported over the weekend that the WWE has officially released its first Wrestlemania 29 buy rate. The worldwide buy rate for this year’s annual event was 1,048,000 which is lower than Wrestlemania 28.
The Wrestlemania 28 PPV buy rate was lowered a couple times from an initial 1.3M buys down to somewhere between 1.1 and 1.2M PPV buys. The WWE appeared cautious when it mentioned PPV buys at its First Quarter earnings call which led one to speculate whether the buy rate did not meet expectations.
This year’s PPV buy rate is likely an accurate buy rate and won’t be calibrated up and down too much as what occurred last year. This year the WWE bumped up its PPV $5 to $69.99 (for HD), $64.99 (non-HD). Could the price point be the reason for the less than expected buy rates. Or, was it the card featuring a rehash of last year’s main event, or maybe a combination? The WWE still had a stellar live attendance/gate with 80K plus attending for a gate over $11M. But, it believed that with the event being in the New York area (technically New Jersey), the company would do a better number than last year.
May 23, 2013
Welcome to another edition of The Wrestling Post. In this post, we take a look at Hulk Hogan’s ongoing battle with Gawker, the WWE donates money to head trauma research and a Court denies a WWE Motion to Dismiss in a Copyright Infringement lawsuit.
Hogan versus Gawker continues
Hulk Hogan is seeking to eliminate all semblance of his sex tape from the internet according to TMZ. The professional wrestler is embroiled in a lawsuit with the Gawker web site over the sex tape which Gawker had posted on its site.
Hogan successfully filed a temporary restraining order requiring that Gawker take down the video and the accompanying post describing Hogan’s tape. Gawker took down the video but left the post describing the video citing the Judge’s decision to grant the TRO as “unconstitutional.” Gawker also left on its site links to other web sites where one could obtain the video.
Hogan’s lawyers have filed a Motion an Order to Show Cause to determine why Gawker should not be held in contempt of Court for disobeying an Order from the Court. On the other hand, Gawker has filed a Motion for Stay of Hogan’s Temporary Injunction. In its briefing, it cites a list of reasons why the Judge’s granting of the TRO was incorrect. Two of the more interesting arguments is that the state court judge was “collaterally estopped” from its ruling as Hogan’s TRO was already ruled on in Federal Court in October. In addition, Gawker argues that the state court judge admitted (which she did) that she did not look at the video or plan to do so, yet ruled on the content.
Payout Take: This lawsuit will be interesting from the perspective of whether Hogan can rid the internet of the offensive tape. Gawker’s stance on the state ordered TRO is noteworthy considering that Hogan’s legal strategy may have doomed him (i.e., he filed his lawsuit in federal court first and then voluntarily dismissed the case but not before that Court ruled on this same injunction.) We will see how this legal case plays out to see whether a Court will overturn the injunction based on the prior ruling or whether the issue is moot due to the ruling in the present forum.
WWE donates $1.2 million to head trauma research
USA Today reports that the WWE has donated $1.2 million to head trauma research.
Via USA Today:
World Wrestling Entertainment, known for past stars such as Hulk Hogan and current champ John Cena, says it is making a gift of $1.2 million over three years to further research aimed at developing a treatment for Chronic Traumatic Encephalopathy. The brain disease, associated with repeated concussions, has come under scrutiny amid concussion-related lawsuits by more than 4,000 former NFL players against the league. CTE has been linked to depression and dementia.
The donation is being made to the Sports Legacy Institute in Boston, a non profit run by former WWE Wrestler and one time Tough Enough competitor Christopher Nowinski. Nowinski, a Harvard graduate, whose wrestling career was cut short due to a concussion.
Payout Take: The donation is a step in the right direction in the continued evolution of the the WWE that recognizes its newfound duties as a publicly traded company and the importance of corporate social responsibility. While many skeptics may think that the donation is “after the fact” for many wrestlers and/or preventative PR in light of the NFL concussion litigation, it shows that the WWE is taking steps to ensure that it does not make any further mistakes with the treatment of its talent.
WWE’s Motion to Dismiss Copyright Lawsuit Denied
The Hollywood Report reports that a Texas music composer has won an initial round in the legal battle over the rights to entrance music he composed for wrestlers. While Papa Berg, the composer that is suing the WWE, had portions of his lawsuit dismissed, the Court allowed him to proceed with his copyright infringement lawsuit. The WWE attempted to dismiss the lawsuit in its entirety or in the alternative, have the lawsuit moved to Connecticut (the WWE’s headquarters).
The bulk of the ruling by the Texas Court was based on jurisdictional issues, the lawsuit alleging that the WWE “misappropriated his songs, caused royalties to be misdirected and interfered with a video game deal.” In the latter claim, Berg did not discover that the WWE had the rights to his songs until video game maker (pre-Bankruptcy) THQ contacted him about the right to use a song in one of its WWE video games.
Notably, for those old enough to recall the AWA and NWA, Berg composed the Freebirds’ “Badstreet USA” entrance song and Sting’s “A Man Called Sting”
Payout Take: Although the issue at hand was a civil procedure question concerning jurisdiction, once the lawsuit gets to the merits of whether or not the WWE infringed Berg’s copyright will it get interesting.
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.
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.
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.
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.
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.
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.
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.
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.
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.