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.
April 9, 2011
World Wrestling Entertainment announced that it is changing its name to WWE in a rebranding effort that includes a new business strategy. The purpose of the change is to “better reflect the company’s global entertainment offerings.”
Two key components to WWE’s brand expansion will be the active pursuit to acquire entertainment content companies and the outsourcing of WWE’s core competencies – television and film production, live event production and licensing. As part of the new business model, the company will also focus on the development of new television products including scripted, non-scripted and animated programs, as well as the launch of a new WWE network in the next 12-18 months. The first new program of the brand expansion is Tough Enough®, WWE’s non-scripted program that debuted on the USA Network on Monday.
This new rebranding initiative will be highlighted through a national consumer and business-to-business advertising campaign entitled “Bigger. Badder. Better.™” The campaign kicked off at WrestleMania® XXVII on Sunday and will be featured on cable TV, print and online.
More from the LA Times:
The moves come as WWE looks to rebound from a tough end to 2010 that saw attendance at its events and pay-per-view revenue both drop 15% in the fourth quarter. The declines were blamed on the economy, although WWE probably didn’t help matters by raising prices at a time when its core audience was feeling the pinch.
There is some skepticism of the expansion outside the ring as well as concern that the WWE is losing some of its market share to MMA.
“I think that the most important thing right now is the return of the health of the core business,” said Jay Kaplan, portfolio manager for Royce & Associates, which holds about 9% of WWE stock. “One of the market’s big concerns is are they losing market share to real fighting,” Kaplan added, referring to mixed martial arts and ultimate fighting.
The WWE new strategy is risky. But, it is familiar with taking risks lest we forget the XFL. How much of the refocusing has to do with the fact that MMA has taken some of its core audience? The timing of the move is curious considering the financials. There are some positive signs: Wrestlemania 27 was a success, the debut of Tough Enough received good ratings and the WWE will see a boost with The Rock back. Prior to the refocusing of its business strategy, there were plans of further international expansion. Als0, its film division has made stars out of some of its in ring talent (e.g., John Cena, The Big Show, Triple H).
Dropping “wrestling” from its name may benefit the company in working with mainstream companies. If it is to extend its brand and compete with the likes of AEG in live entertainment production, the name change could help.
Another intriguing aspect of this is the development of a WWE network. With a vast wrestling library at its disposal, it would not be far fetched to create a network. This could be the blueprint for the UFC to one day have its own network.
One final interesting bit from the LA Times piece is the question of whether the rebranding effort will attract a bigger company to purchase the WWE. Vince McMahon denied this is the reason for the new strategy. It would seem unlikely that this would be the case knowing how hard McMahon worked to build the WWE.
February 15, 2011
Dwayne “The Rock” Johnson’s triumphant return to Monday Night Raw to announce that he will host Wrestlemania XXVII was fueled by Johnson’s Facebook page. In fact, a recent article on social media blog Mashable spoke with WWE’s digital team to discuss its social media strategy.
The WWE identified 4 parts to its strategy.
- Learn from the evolution of web usage
- Produce original content for its sites
- Extending the storylines from the television shows
- Building the brand of individual stars
Some interesting takeaways from the Mashable article:
- WWE claims an online fan base of about 14-15 million unique site visitors globally. Its fans are vocal and passionate and spent much of their online time of social sites, primarily Facebook,
- The WWE digital strategy team takes a strong stance that it’s important to go where “people are nesting,” instead of spending marketing dollars to cajole them to consume branded content within the confines of the WWE web site. On that principle of going where the people are, WWE has focused its efforts on making sure its content is available on the key social sites where its community is flocking, namely Facebook, Twitter and YouTube.
- WWE produces about 1,500 unique pieces of content for its website per week, which it then optimizes across its social sites.
- On Facebook, WWE maintains 108 unique pages; including the main WWE page, Stand Up for WWE, pages for most of its top talent and pages for individual TV shows.
While the UFC is the industry leader in social media when it comes to MMA, the WWE is the gold standard. Obviously, the two organizations have differences as the WWE strategy is predicated on the fact that the organization operates in unison. Meaning: its sports entertainment and the matches are predetermined. Thus, it can advance its stories and determine future matches and use its entire complement of social media to promote the events. The UFC (or Strikeforce as we saw this weekend) cannot predict who will win, lose or will be out with an injury. In addition, I assume that the WWE has many more people on staff dedicated to social media. Also, it has a vast global reach, something the UFC aspires to do.
An interesting take from the article was that the WWE attempted to make its own community web site: WWE Universe. The site was fueled entirely by WWE fans. From April 2008 to January 2011, 750,000 fans created accounts but the WWE decided to shut it down as it found that the Facebook pages received more traffic.
Dwayne Johnson’s web page has over 1.6 million fans and the number probably increased dramatically after The Rock announced his Facebook address live on Monday Night Raw. The Rock’s appearance last night even received a tweet from UFC head Dana White in which he tells his followers to follow The Rock on twitter. The Rock’s twitter has been up for one day, with only four tweets. Yet, he already has 84,468 followers (as of 9:56 am west coast time).
As an aside, I was flipping channels and caught The Rock’s appearance and could not turn the channel. Even seven years removed from wrestling, everyone remembers his catch phrases and the fans were in the palm of his hand.
October 6, 2010
Barron’s featured former WWE CEO/Senatorial Candidate Linda McMahon and the decline in finances of World Wrestling Entertainment. As McMahon’s political career heats up, the WWE business is cooling.
The article points out that the past three years; WWE popularity has taken a nose dive whereas the UFC has taken over in PPV dominance.
Revenues began to slip at WWE well before Linda [McMahon] left and eventually won the Republican nomination to face Democrat Richard Blumenthal in what looks like a tight contest. In 2009, total sales of $475 million were down 10%. But [WWE] Chief Financial Officer George Barrios proudly notes that profit margins have generally improved since he arrived in 2008. He says WWE earnings should rise when the company finds new performers that connect with its fans. “We are actually pretty happy with the way we’re doing,” says the financial chief.
A reason for the decline in the WWE PPV buys has to do with the poor economy and the frequency of PPVs. Not only does the WWE compete with the UFC for PPV dollars, it is being challenged by rival wrestling organization, TNA, a league that includes Hulk Hogan, Ric Flair and Cactus Jack – notable wrestling figures albeit older. As Barrios indicates, the WWE needs to find a new performer to connect with fans. Although John Cena is a viable candidate, he cannot carry both its Raw brand on USA and Smackdown on the SyFy network. If you do tune in, there are many younger wrestlers that have been given the chance to become the next big thing. But, they have not found the popularity or gimmick that will sell them to the fans.
PPV fatigue can be another reason for the WWE decline in numbers. As mentioned, the lack of recognizable stars along with the saturation (WWE has 3 or 4 original programs on per week) on TV plus the tightening of discretionary income may equal the decline of WWE PPV buys.
The UFC rise in popularity the past couple years is another reason for the decline of the WWE PPV numbers. With the slowed economy, many fans are choosing the UFC over the WWE when it comes to spending their discretionary income on PPVs.
It will be interesting to see how the UFC PPV numbers will be for UFC 121 as the UFC seems to be heavily promoting this show hoping for a big gate and PPV buys. Also, after UFC 121, Zuffa will have done 4 live shows in the past 30 days. The lukewarm reviews of UFC 119 were a red flag for many UFC fans that usually made the monthly PPV purchase. Bloody Elbow notes how some have criticized the UFC for possible PPV-fatigue which has shown through lack of production innovation and a failure to stock its monthly cards with marketable stars. Certainly, the WWE decline in PPV buys could happen to the UFC down the road. It will be up to the UFC to see how it can sustain its market of PPV buys.
August 25, 2010
Dana White confirmed speculation that UFC ring girl Arianny Celeste will be appearing in Playboy. In an interview with MMA Fighting on Wednesday, White was asked about about a picture Celeste put on her twitter page which appeared to be a picture of the Playboy offices. White acknowledged that Celeste would appear in the November issue of Playboy.
Celeste becomes the second UFC ring girl (Rachel Leah was the first) to appear in Playboy. During the interview, Ariel Helwani astutely points out the WWE’s successful working relationship with Playboy in which several WWE Divas posed nude for Playboy. The WWE-Playboy relationship garnered record magazine sales for Playboy.
The UFC hopes record sales for Celeste’s issue. Not only will Celeste expose the audience to the world of MMA, it will elevate her status as well. It could mean more opportunities for Celeste in the future. Playboy hopes that the Celeste cover will equate to record sales similar to the WWE Divas.
August 24, 2010
Shine Fights announced that its fans will have the chance to vote online to decide first round match-ups for its eight man, one night lightweight grand prix tournament on September 10th. The fights will be on PPV.
From MMA Fan House:
Shine Fights announced its lightweight tournament earlier this month and has added a wrinkle with the fan balloting. In a release from the promotion, Shine said it wants to become “MMA’s most fan-friendly organization” and believes allowing fans to pick the first-round bouts heads it down that path.
The eight competitors for the tournament have already been chosen. But fans can set the matchups they want to see in the first round and e-mail those to GrandPrixPick@Shinefights.com. According to the promotion, the fight combinations that get the most votes will be the ones used in the tournament’s opening quarterfinal round.
“Every MMA organization tells fans what fights they are going to see, even though the fans are the ones paying the money,” said Shine Fights COO Jason Chambers. “We are saying, ‘You are buying the pay-per-view, you are buying the tickets, so you tell us what you want to watch. We feel it’s one of the most unique opportunities fight fans have been given to date.”
The concept of fans choosing matches is not a unique idea. In professional wrestling, the WWE has used a Viewer’s Choice format when deciding match-ups. Fans would go to the WWE web site to vote on what matches they would like to see that night. Of course, since it is pro wrestling once matches are voted on, the outcome is likely discussed and choreographed. Still, the concept of fan interaction is similar.
Since its last attempt at a show failed, Shine has to do something to regain fan interest in its product.
The novelty of playing matchmaker should attract fans. The opportunity to have perceived control over what you watch is appealing from a fan standpoint. One issue that may come up is name recognition. Will a casual MMA fan know these fighters. Although the fighters include vets from other organizations, is that enough. Will Shine promote the eight fighters so that there can be some semblance or reasoning when picking the match-ups.
Shine hopes that the marketing strategy of a one night, survive and advance, winner take all tournament will give fans a reason to purchase tickets and the PPV.
April 7, 2010
- UFC 111 PPV Buys Update
- Vince McMahon seeking to get UFC banned in key European countries
- UFC is caged and ready to rumble, finds its first Arab voice
- Dana White talks to MMA Business about everything!
- First hand look at MMA fails to sway Begel
UFC 111 PPV Buys Update
Updated UFC 111 numbers look to be coming in at around 770,000 buys. With Georges St. Pierre as the headliner, the numbers were strongest in Canada… (Wrestling Observer Newsletter)
MMAPayout Note: Previous preliminary UFC 111 PPV trending numbers had the event at 850K PPV buys, which appears to now be downgraded to 770K PPV buys. Coming out of the event, MMAPayout gave a buyrate estimate at somewhere in the range of 700K PPV buys, which may not be too far off the current projections.
Vince McMahon seeking to get UFC banned in key European countries
Sometimes the most intriguing wrestling news stories are broken or teased on the Wrestling Observer / Figure Four Online message boards. This is one such case, as UFC.com writer/German UFC commentator (and former German WWE commentator/marketing staffer/keeper of savage secrets) Oliver Copp let the news leak that Vince McMahon is attempting to sabotage UFC’s expansion into key European markets in a thread about Dana White’s recent ambition to hold an event at the newly opened largest domed stadium in the world, Cowboy Stadium in Dallas.(Wrestling Observer Newsletter, Cageside Seats)
UFC is caged and ready to rumble, finds its first Arab voice
For Lee Charteris, the director of operations for the event organisers, Flash, and the army of 300 staff and sub-contractors he commands, the work started in early December.
That was when construction of a purpose-built venue that will be able to hold more than 12,000 people at the Ferrari World amusement park on Yas Island began.
He said the structures his company built for the Aerosmith and Beyoncé concerts during the Abu Dhabi Grand Prix last year were impressive enough. (The National)
Arab ears may not be accustomed to translations for brutal fight moves such as the “triangle choke hold”, the “clinch” or the “arm-bar technique”.
Come April 10, Mohammed al Housani, a 25-year-old Emirati, will announce those and other combat manoeuvres on Arabic-language television for the first time at the Ultimate Fighting Championship (UFC) event in Abu Dhabi. (The National)
Dana White talks to MMA Business about everything!
MMA: Let’s talk about television. Spike TV and Pay Per View seem to do very well for UFC events and for The Ultimate Fighter. But the networks or ESPN can deliver even more viewers. Is that a consideration?
White: I definitely consider this. I would love to get UFC together with either ESPN or a major TV network, but we haven’t been able to do that yet. We’ve been close to big deals like this. But I’m not gonna just jump at something. This might be stupid, but I think we’re bigger than HBO or CBS. I really do think UFC is bigger than any of those networks. I’m not gonna go in and cut some deals just because they are who they are. We’ll do what’s right for UFC and for our events. (MMA Business Magazine)
First hand look at MMA fails to sway Begel
For those who have been keeping score, I’ve been writing about how horrible I think Mixed Martial Arts is for several months. The guys (and they seem to be all guys) who have written in, have all complained that I’ve never even seen a match. They invited me to this one and I took them up.
The very nice guy who promoted the thing made every effort to, as he put it, “change my mind.”
No such luck, although there was one minor change. Instead of not liking MMA because of the brutality and violence, I also now don’t like it because it’s about as boring as a sport could possibly be. I mean excruciating. (On Milwaukee)
VIDEO OF THE DAY
IMAGES OF THE DAY
- Paul Buentello has been officially cut by the UFC after his loss to Kongo. (MMAPayou)
- Huerta, Hinton Cleared for Bellator Season 2 Debut (Sherdog)
- Lawal, Mousasi Wage Mental Warfare Heading into April 17 Bout (Sherdog)
- CEO estimates up to 12,000 attendance for “Strikeforce: Nashville” on April 17 (MMAJunkie)
- Strikeforce reserves June 26 for San Jose’s HP Pavilion, Fedor-Werdum talks ongoing (MMAJunkie)
- CBS to air Jason “Mayhem” Miller vs. Tim Stout on “Strikeforce: Nashville” broadcast (MMAJunkie)
- Full UFC 114 fight card released, Duffee and Sanchez on PPV main card (MMAJunkie)
- Tickets for Boston’s Bellator 17, Eddie Alvarez vs. Josh Neer “super fight” now on sale (MMAJunkie)
- White: Liddell vs. Ortiz to Headline UFC 115 (MMAFighting)
- Huerta: Locked In a Cage, But Finally Free (MMAFighting)
- MELENDEZ-AOKI COULD TRIGGER REMATCH IN JAPAN (MMAWeekly)
- ALVES EXPLAINS SURGERY AND DESIRE TO FIGHT FITCH (MMAWeekly)
- Anderson Silva vs Demian Maia UFC 112 Preview Video (Heavy)
- HDNet Fights Vault: XFL Team Takedown at 8 PM ET on HDNet (04/09/10)
- Fighting Words with Mike Straka (feat. Matt Hughes) at 8:30 PM ET on HDNet (04/09/10)
- InsideMMA (Aaron Simpson, CB Dollaway, Javier Vasquez) at 9 PM ET on HDNet (04/09/10)
- HDNet Fights: K-1 World GP 2010 at 10 PM ET on HDNet (04/09/10)
- UFC 112 : Silva vs Maia at 10 PM ET on PPV (04/10/10)
- UFC 112 : Silva vs Maia at 10 PM ET on PPV (04/10/10)
- HDNet Fights: KOTC Bad Boys Too at 10 PM ET on HDNet (04/16/10)
- Strikeforce Nashville: Henderson vs Shields at 11 PM ET/PT on CBS (04/17/10)
- WEC 48: Aldo vs Faber at 10 PM ET on PPV (04/24/10)
- HDNet Fights: MFC Vindication at 10 PM ET on HDNet (05/07/10)
- UFC 113 : Machida vs Shogun 2 at 10 PM ET on PPV (05/08/10)
- Strikeforce St. Louis: Overeem vs Rogers at 10 PM ET/PT on Showtime (05/15/10)
- UFC 114 : Rampage vs Evans at 10 PM ET on PPV (05/29/10)
March 15, 2010
Street and Smith’s Sports Business Journal is reporting that the WWE has just hired former U.S. Tennis Association executive Tandy O’Donoghue as its VP of Operations and New Business Development.
WWE has hired Tandy O’Donoghue as vice president, operations and new business development, making her the third former U.S. Tennis Association executive to land with the wrestling company.
She joins Michelle Wilson, the former USTA chief marketing officer, and Jared Bartie, the former USTA general counsel. Wilson is the WWE’s executive vice president of marketing, and Bartie is executive vice president and general counsel.
The WWE has experienced a great deal of turnover in the last 18 months with the departure of both Linda and Shane McMahon. While Vince McMahon has since taken over CEO responsibilities, these latest hires now look to plug the remaining holes.
January 22, 2010
Danny Acosta of FIGHT! Magazine has an interesting short clip interview where he discusses the idea of competition in MMA with Strikeforce’s Scott Coker.
MMAPayout.com has long talked about why competition is so important in MMA and Coker does a pretty good job of summarizing the position: competition helps to grow demand for the entire industry. How? It affords the consumer the luxury of choice in which they can experience the product in a different light, compare and contrast, and ultimately feel better, or more invested, in their purchase decision. All of those things lead to greater satisfaction, which in turn spurs further repeat business and referrals to the sport.
However, there are some limitations to the argument, and I’ll push back on what Scott has said merely to play devil’s advocate a little bit:
1.) The major limitation to the idea of competition spurring demand in the sports world is that product quality is highly dependent on a very limited source of human capital that cannot be duplicated or engineered the way you might develop a new piece of proprietary technology through R&D. Hence, there’s never been a truly successful model in North American professional sports (or the world, really) where two high level leagues were able to compete simultaneously in the same sport over the long term. There’s always been a merger to combine talent and resources: e.g., NFL and AFL, NBA and ABA, the NHL and WHA, etc.
While I certainly buy that competition spurs demand, I do so with a long-term perspective constrained by the notion that this will only be the case while the sport is moving through the growth phase of its product life cycle. MMA is still a very new sport to many people and it’s less about seeing the best fighters as it is experiencing the novelty of the sport itself. That will only be the case for so long, and we’re already starting to see the effects of a more well-educated MMA consumer (less booing on the ground, larger interest in martial arts programs around the US, fans being selective in PPV purchasing, etc.).
2.) The WWE and Pride are probably not the best examples to cite where competition played a huge role in industry demand. WWE and Pride both thrived on theatrics and the “promotion” aspect of the business that enabled them to go head-to-head with their competition. The quality of the product essentially became more about drama than it did the action.
The most popular MMA fights in Japan have all largely been freak show fights or gimmick bouts in which a former pro wrestler fights MMA. Pride worked to mimic a professional wrestling atmosphere in the sense that it built baby faces and heels to polarize the crowd. If you look at the popularity of professional wrestling in Japan today, I’m not sure it should be a surprise to anyone that Japanese MMA has fallen off as much as it has.
If MMA is going to work in North America it cannot be based upon gimmick fights or as a stop-over for every over-the-hill athlete in professional sports. It has to seek legitimacy as a bona fide sport . MMA can and should be story line-driven – all sports are – but it must be so in a manner that more closely resembles the way the professional sports leagues build-up a game between two rival teams.
Why? That’s where the mainstream money lies; there’s a reason wrestling’s growth has stagnated and its demographic skewed younger.
3.) The absence of competition certainly isn’t the only reason the ratings have fallen off in both cases. The WWE lost a great deal of its 90s writing group that produced such successful plot lines. The company also experienced quite a dramatic talent gap: John Cena, Randy Orton, and Batista…the new Rock or Stone Cold they are not. Likewise, Pride dug itself a hole with the Japanese mob and debt that ultimately impacted the day-to-day operating environment of the company.