April 3, 2013
Welcome to another edition of The Wrestling Post. Its the biggest week of the year for the WWE as Wrestlemania 29 happens this Sunday at MetLife Stadium in New Jersey.
New Jersey Area Expected to Receive Huge Financial Upside from Wrestlemania 29
The Bergen Record (NJ) reports that the area can expect a financial impact to the region comparable to last year’s $102.7M economic impact in Miami. In addition, to the financial boon from wrestling fans from travel, hotels, food, rental cars and entertainment, Miami received $15.3M in local, state and county taxes. Last year’s attendance at Wrestlemania 28 was 78,363. First day ticket sales for this year’s event was at a record 52,000. This generated over $10 million in gross revenue as compared to $6.3 million last year. The report also states that hotels surrounding the event are sold out.
Some interesting demographic figures from the article:
Who goes? WWE.com attracts 12.3 million unique monthly visitors, and 58 percent of them have at least some college education and 46 percent have a household income greater than $60,000, according to a WWE website. The company says 74 percent of its television audience is over 21 years old, and 36 percent are female. It does particularly well with black and Hispanic viewers.
Payout Take: The wrestling may be fake, but the money is real. The annual wrestling extravaganza is a destination event for fans and the WWE has supplemented Sunday’s event with an Expo (WWE Axxess), a “Hall of Fame” ceremony and other events this week. The economic impact to the area is what appeals to cities to have this event in their city. Despite what you think about pro wrestling, Wrestlemania is one of the biggest economic generators around.
Social Media Explosion Supporting Wrestlemania
The WWE has announced a “record social media activation” for Wrestlemania 29. The number of initiatives going on this week include CEO Vince McMahon joining twitter, Wrestlemania will stream on multiple platforms including Apple, Android and Windows 8 devices. The WWE also will provide bloggers with embeddable content on a new Yahoo! web site. It has included celebrity “social media ambassadors” including Jimmy Fallon, Lil’ Wayne and Charlie Sheen to name a few. These ambassadors will be tweeting from various events the WWE will be conducting throughout the week.
Payout Take: The WWE is ahead of the line with social media and the brand activation shows. It has taken advantage of its tech/social media-savvy demo and given them tools to play with which in turn will help promote the WWE brand. Certainly, the WWE will be trending all over twitter this weekend. It is interesting that it has not utilized Tout more as it had invested in the video snippet, social media platform.
Hart Family Settles with WWE
The Washington Post via AP reported that the Hart Family has settled with the WWE in a lawsuit involving the rights to the likenesses and images of deceased WWE wrestler Owen Hart. Hart died in a staged accident at a WWE PPV. The Hart Family sued in June 2010 alleging that the WWE did not pay royalties to the Hart Family (or Owen’s estate) for the use of Owen in WWE produced content. No terms of the settlement were disclosed although it is rumored that the WWE will be able to utilize Owen’s likeness and images again.
Payout Take: The real in-ring death of Owen Hart was one of the more tragic events in pro wrestling history. Its good to see that the two sides in this lawsuit have settled and it appears that the sides have come to an agreement on the use of Hart’s likenesses and imagery in WWE content.
March 1, 2013
The WWE announced on Thursday the anticipated price point for its yet-to-be launched WWE Network. The WWE has set the monthly charge between $12.99 and $14.99 although no debut date was announced.
The WWE has decided to pursue a premium subscription model similar to HBO and Showtime in which subscribers will pay a monthly charge for the network.
Via Thursday’s WWE Earnings Call (h/t Cageside Seats):
Based on our [WWE] market research, we estimate that a fully distributed domestic pay network could ultimately attract between 2 million and 4 million subscribers at a “steady state.” These subscriber estimates derive from a projected base of approximately 47 million WWE digital TV households in the US (including lapsed fans), and the proportion of which have an affinity for WWE content, although there is no guarantee that this affinity will translate into actual subscribers. These take-rates are based on a value proposition for the network that reflects inclusion of our pay-per-view events, except WrestleMania, as well as compelling original content. Under our preferred subscription model, while our pay-per-view events would still be offered on an á la carte basis as currently available, the research indicates that a WWE network offering would drive significant consumer interest (including households that currently do not purchase pay-per-view events). At a proposed price per month between $12.99 and $14.99, this would represent incremental revenue to WWE of between $125 million and $250 million and incremental EBITDA between $50 million and $150 million.
The key words in the first sentence of the above snippet is “fully distributed domestic pay network.” As we’ve written about in the past, distributors like DirecTV have pulled back on carrying certain networks (i.e., Pac 12 Network, Longhorn Network) due to the retransmission rights. Yet, DTV did survey its subscribers on the possibility of subscribing. If the WWE is unsuccessful in finding distribution, where does it leave it. Are the projections ambitious? With distributors seemingly tacking on additional charges monthly, can fans afford it?
October 4, 2012
Welcome to another edition of the Wrestling Post. This time we take a look at the WWE’s new network show, Slamming TUF ratings on RAW and the King Mo’s debut on TNA.
WWE Main Event rating
The WWE’s newest show on the ION Network, “WWE Main Event,” airing on Wednesdays from 8-9pm earned high ratings in its most important demos during its debut this week. It scored the highest male audience in the last year on the network with the most Men 18-49 (422,000), Men 25-54 (444,000), and Men 2+ (876,000).
Payout Take: The debut had exceptional ratings in part by having two of its top main eventers (CM Punk vs. Sheamus) star in the debut so it is likely that the ratings will decrease considering the fact it cannot have those type of events each year. But, the ratings show growth for the network and another platform for the WWE brand.
WWE shows its smacking down TUF
On this past Monday Night’s RAW, the WWE ran a graphic which showed that Friday Night Smackdown on the SyFy Channel had 3 times as many viewers as TUF on FX. The graphic was shown touting its social media supremacy.
Payout Take: A valid statement that the UFC should take notice. It shows that Friday night is not an excuse for ratings. I find it interesting that each time the WWE takes a shot at the UFC, White does not respond back as he does to media reporters. Perhaps he realizes who he’s dealing with and wants to stay in his own lane.
Lawal upset with Zuffa matching rights
King Mo Lawal made his debut on TNA Impact Thursday. As you recall, Lawal will be doing pro wrestling with TNA and then fight for the Bellator promotion. Lawal signed with Bellator on May 10 will not participate with the organization until 2013.
MMA Junkie reported on Zuffa’s promotional agreement which feasibly could have retained the rights of Lawal after he was released. Ironically, the issue occurred in Bellator as Tyson Nam threatened litigation against Bellator as he was being held out of its tournaments while having opportunities go by the wayside due to the fact that Bellator retained his rights under contract. Dana White has been critical of Bellator for holding fighters like this. However, the UFC/Strikeforce have similar clauses and Lawal and his agent question why it is in the Zuffa contracts. Lawal’s agent had called White to see if the UFC/Strikeforce was still interested in retaining Lawal despite being cut.
Payout Take: Bad feeling between White and Lawal remain. Matching rights essentially is a right of first refusal which allows the company the opportunity to retain the person under contract usually by matching whatever offer is made to them. According to MMA Junkie, most MMA organizations including the UFC, Strikeforce and Bellator have them. The UFC explained its need to retain the rights of those that leave the promotion but in the form of video rights. Essentially, the UFC retains its rights to the images while the fighter was in the UFC. But, it does not explain why it continues to have a matching rights clause for fighters when it does not plan to exercise it. The fact is with all of the injuries, the UFC may have to enforce this clause to retain some healthy fighters for its events.
As a postscript, Roy Nelson sent out a tweet to his followers to watch Lawal tonight on Spike. The UFC probably is not happy about that tweet.
July 23, 2012
Bloomberg Businessweek featured Vince McMahon this week in lieu of Raw’s 1000th episode. McMahon gave his secrets to managerial success in the article.
Some of McMahon’s gems in Bloomberg included: Listen to your employees – and yourself, Treat every day like day one, Don’t cultivate fear, Clean your head and find your zone, Don’t settle for BS answers when interviewing job candidates and Complacency is your worst enemy,
USA Today also featured the company as it made it to 1000 episodes. The article was an overview of the company and how its grown since the first Raw.
McMahon via USA Today:
“Many years ago, I had a chief financial officer say, ‘Vince, you make your money on pay-per-view, so why do all this other crap?’ Without all the other stuff we do, pay-per-view doesn’t work,” says the CEO, whose PPV revenues are up 30% after setting a record with 1.3 million buys for Wrestlemania 28 in April.
We’ll see if these numbers hold true when quarterly results are revealed next month. We already know the PPV buys were lower than 1.3 million.
Despite what some may think about fake wrestling, there’s something to be said about the longevity its had on cable television. It’s somewhat amazing considering it was the early 90s when it first started and the company continues to reinvent itself. I’m not sure if its an achievement that the WWE is the longest-running weekly episodic program in TV history with no reruns or its a testament to the tireless workers in the company.
The WWE had some good publicity leading into its episode 1000. I think the Bloomberg article may be a little fluff considering the horror stories from some former WWE employees about working for the company.
February 18, 2012
Via WWE press release:
Governor Christie was joined by WWE Chairman and CEO Vince McMahon, New York Football Giants President and CEO John Mara, New York Jets Chairman and CEO Woody Johnson, NYC & Company CEO, George Fertitta and WWE’s Senior Vice President of Special Events John Saboor to make the announcement at a press conference held earlier today. WWE Superstars John Cena®, Triple H®, Sheamus®, Mark Henry®, Brie and Nikki Bella™ and special guest Dwayne “The Rock®” Johnson were also on hand at MetLife Stadium for the historic announcement.
The Rock announced that he would be at the NY/NJ WrestleMania although its not known whether he’d be performing or just participating in another way. His appearance can help with the early promotion for the event.
Even before this year’s Wrestlemania in Miami, the WWE has announced WrestleMania XXIX. Its a little surprising considering its held past Wrestlemanias at Madison Square Garden. But, the stadium venue falls in line with the company’s annual biggest event. Its a good acquisition for Met Life Stadium and a dress rehearsal for the Super Bowl which it will host in 2014. Despite what some may think of professional wrestling, the competition to host a Wrestlemania is as tough as it is to get a Super Bowl.
The positive economic impact it has for a city is noticeable as many fans travel to the city of the Wrestlemania and its a significant boost in tourism. The WWE has taken advantage of the event by promoting a week full of events to draw its fans to the host city. According to the WWE press release, “WrestleMania has generated more than $200 million in cumulative economic impact for its past four host regions.”
Last year, WrestleMania was held in Atlanta where it was reported it made a positive $62 million economic impact in the region. Likely, Miami will eclipse this number and next year’s WM in New York/New Jersey should be even more considering the attraction of visiting New York as well as the other activities that one could do in the area.
January 11, 2012
The WWE claims that the brand for WWE pro wrestler John Cena is worth an estimated $106 million in 2010. The report comes out with the announcement of a huge sponsorship deal between Cena and Post Cereal’s Fruity Pebbles.
ESPN’s Michelle Steele reports that Cena was an $106 million brand in 2010. It was confirmed by wrestling site, PW Torch, which added, “In 2010, WWE reported $477.7 million in total revenue, which translates to Cena directly contributing to 22.2 percent of revenue two years ago.” The Torch indicated that its the number it tells corporate sponsors about Cena’s brand value.
Post Fruity Pebbles and the WWE sent out a joint press release (a portion of which is below) to announce the sponsorship deal (h/t Cageside Seats):
Post Fruity Pebbles and WWE Superstar John Cena are teaming up for a new partnership, which includes a collectable cereal box and an instant-win promotion awarding a VIP meet-and-greet with the talent.
Cena’s passion charity, the Make-A-Wish Foundation, for which he has granted over 250 wishes for children with life-threatening medical conditions, and ‘be a STAR,’ the anti-bullying alliance co-founded by WWE and The Creative Coalition, are prominently displayed on newly-designed Fruity Pebbles cereal boxes featured nationwide January through March.
The on-pack instant win grand prize winners will each receive a VIP meet-and-greet with Cena, priority seating and transportation to a WWE live event, and an autographed “Rise Above Hate” T-shirt, in support of the ‘be a STAR’ anti-bullying message. First prize winners will receive an autographed version of the exclusive T-shirt. The second prize winners will receive the exclusive T-shirt. To enter, look inside the specially marked boxes featuring Cena for a special code to submit on www.PebblesPlay.com/Cena.
The sponsorship opportunity arose out of The Rock taunting (in perhaps an improv moment) Cena for his in ring wardrobe calling him “Fruity Pebbles.” And a sponsorship opportunity was born…
The news of Cena’s brand value may seem outrageous to many MMA fans considering he is “sports entertainment,” but Cena attracts mainstream corporate sponsors. In addition to the Fruity Pebbles sponsorship, Cena has deals with Gillettte and Subway. He is the biggest star in the WWE but the biggest decision for the WWE creative team is whether to turn him into a bad guy this year. This seems trivial from an outsider’s perspective but it also means big business when you consider sponsors and for Cena personally as he gets a portion of the WWE’s business including t-shirt sales and (likely) PPVs.
The Fruity Pebbles deals shows how opportunistic the WWE is with its product and its widespread popularity. The WWE probably was not looking for a deal with the cereal company prior to The Rock taunting Cena.
Will there ever be an MMA star with this much appeal and brand value? The UFC is still years away from having a star reach John Cena status. Maybe its unfair to compare but its still an interesting look at how much an individual can mean to a company.
January 5, 2012
MMA Fighting reportsWWE wrestler CM Punk will accompany Chael Sonnen to the Octagon at UFC on Fox 2. Punk, a Chicago native and MMA fan, appeared on an episode of the MMA Hour last year talking about his admiration of mixed martial arts.
Is the Punk appearance good for the UFC? Does Punk’s appearance muddy the lines between the UFC and WWE? Is it a sign of things to come with the new UFC-Fox relationship?
In the end, the Punk walkout may not be a big deal unless Fox picks up on it pre-fight. From a practical standpoint, the pairing of Punk and Sonnen will be an attraction for Chicago. It also makes sense because Punk’s character is anti-hero and Sonnen (in a way) mirrors that persona. But for the casual viewer tuning in for the first time, will they associate MMA with professional wrestling? From the WWE’s standpoint, its good, free publicity for its sport. Punk is becoming one of the top two or three wrestlers in the company and the appearance on network television can only help. Definitely, those anti-pro wrestling people cannot like the fact that the UFC is crossing over (again) into the world of pro-wrestling.
November 5, 2011
The WWE announced its 3rd quarter earnings this past Thursday in a conference call hosted by WWE Chairman Vince McMahon and other WWE executives. Despite beating analysts expectations for Q3 earnings, net income for WWE fell to $10.6 million vs. $14.3 million in 2010.
The WWE announced that revenues totaled $108.5 million as opposed to $109.6 in 2010. A decline of 1%. Analysts expected adjusted net income of $0.15 per share. WWE announced its adjusted net income as $0.19 per share.
One of the bigger questions on the earnings call was the WWE Network announced to debut in 2012. Notably, there was no talk about the recent announcement that there would be a WWE channel on YouTube. So, it appears that the WWE will go forward with an over the air network in addition to its YouTube channel.
McMahon and other WWE executives were quite vague regarding the plans for the WWE Network. But here are some tidbits.
Via Seeking Alpha:
(McMahon) Capital expenditure is about $10 million to $15 million mostly in equipment and construction for our network. And we believe that, obviously we have finally turned the corner on where we are with our network, and we’ll soon be making a very big announcement as it relates to that.
So that we are generally speaking of where we are with the quarter this year. And notwithstanding that, again, we are taking advantage as we always do with all of our strategic opportunities as well as I’ve said before, including launch of the WWE Network, so with that we can achieve meaningful growth as far as that in other aspects of our company is concerned.
We expect our fourth quarter 2011 results will reflect $46 million in startup operating expense and $10 million to $15 million in capital expenditures for equipment and construction. This investment will provide space for additional staff and production equipment and allows for a redesign of enhanced interactive website to support a full range of network programs.
- McMahon indicated that the network would not partner with distributors. The network will be wholly owned by the WWE.
- WWE entered into a revolving credit agreement of $200 million based on favorable conditions in capital markets. Although the WWE indicated no plans to borrow at the time, it could utilize the agreement for the WWE network.
- Q3 saw an impairment charge of $5.1 million coming from its film division
- PPV buys increased domestically by 3%, TV ratings were flat compared to Q2 and live attendance saw a 6% decline.
- Excluding the impact of the film impairments in the current quarter, Adjusted Operating income was $21.0 million as compared to $20.3 million in the prior year quarter. Adjusted Net income was $14.1 million, or $0.19 per share, as compared to $14.3 million, or $0.19 per share. (via WWE press release)
- Although the WWE announced a shift in its business strategy earlier this year. there are no threats of a takeover.
- Analysts actually take issue with the WWE’s creative team as it cites the lack of taking advantage of wrestler C.M. Punk’s anti-hero storyline. However, the return of The Rock to the WWE this quarter, it should help with ratings. McMahon addressed the fact that the WWE could address these “creative challenges”
WWE stock price was up to $10.70 but closed down slightly for the week at $10.58.
October 24, 2011
The Atlanta Business Chronicle reports that this year’s Wrestlemania brought a $62 million economic impact to the area according to an economic research study by the WWE. This is a record for the WWE and a $17 million increase in economic impact from last year’s Wrestlemania in Glendale/Phoenix, Arizona.
This year’s Wrestlemania, which featured the return of Dwayne “The Rock” Johnson, garnered almost $8 million in taxes for the area. A portion of the impact relates to the increase in out of state visitors staying in the area for the event.
Darren Rovell also tweeted that the WWE’s impact equated to 621 full-time jobs in Atlanta.
The study is being released a week before the WWE announces its earnings for the third quarter. So, maybe a bit of public relations by the WWE. The reported financial impact on Atlanta is similar to the boon Toronto received for UFC 129 and is good news prior to its earnings call. Obviously, one may argue the economic impact report is skewed since the study was done by a Stamford, Connecticut firm (where WWE headquarters is located) likely commissioned by the WWE. But, it shows the importance of the live event is to the UFC and WWE. Both have added to the live experience through Expos at big events which allow consumers more access and touchpoints to its brands.
October 12, 2011
TMZ broke the news that Brock Lesnar would be a character in the new WWE video game, WWE ‘12. Dana White told TMZ that he was “fine” with Lesnar being in the game.
Lesnar indicated that he would not have agreed to the WWE video game unless gave him the ok. In addition to the news, Lesnar told ESPN in an interview to promote the game that he could see himself back in the WWE for one match.
Brock Lesnar Via ESPN:
I think I will. I think under the right circumstances I will. I think if Vince McMahon and I were able to sit down at the same dinner table and break some bread that we could come up with some kind of game plan. At the end of the day, I’m an ultimate fighter. That’s who I am and that’s who I’ll always be. I was an entertainer but at the end of the day, I’m still as real as it gets. I think a lot of things have to fall in the right places for something like that to happen.
Here is the Brock Lesnar trailer for WWE ‘12. Notably, the video comes courtesy of Paul Heyman.
And here is Dana White being asked about Brock Lesnar in WWE ‘12:
WWE ‘12 will be available November 22nd – just in time for the holidays.
White dismissed any notion of confusion between UFC-WWE by having Lesnar in the WWE video game. He did state that it would be an issue if Lesnar wanted to wrestle while still under UFC contract. This is interesting considering Lesnar’s comments to ESPN. Of course, the Lesnar interview could be part hype for the video game. It could also mean that one day, after his UFC contract expires, Lesnar would go back to the WWE.
For White, granting Lesnar the opportunity to appear in the video game takes nothing away from the UFC business-wise right now. However, Lesnar’s appearance in the WWE video game may mean his departure from the UFC in the not too distant future. Lesnar has been the UFC PPV draw the past three years garnering over 1 million buys each time he fights. Without Lesnar, only Rashad Evans has had PPV success of over 1 million buys since 2008. (source: MMA Payout Blue Book). With Evans on the shelf again and Lesnar scheduled for a showdown with Alistair Overeem for UFC 141, the UFC might be concerned about its PPV business after 141. Certainly a Lesnar-Overeem matchup will do over 1 million buys. But, if Lesnar decides to leave in 2012, who will step up as the draw that could garner over 1 million PPV buys.
Notwithstanding the 1 million PPV buy threshold, the UFC may be concerned with its PPV business. With the UFC falling back with its scheduled time for PPVs, it hopes that the 2012 PPV business will be much more successful than this year.