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.
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.