December 27, 2014
MMA Fighting reports on Scott Coker’s impressions of the UFC lawsuit as it pertains to how his organization is described in the lawsuit as a “minor league.”
Coker indicated in the article that he had not read the Complaint (we assume the first one filed by Le, Quarry and Fitch but all of them mirror each other) filed by former UFC fighters against Zuffa. Unsurprisingly, Coker does not think that Bellator is a minor league. He did not comment on whether the UFC was a monopoly or his thoughts on the lawsuit. He did indicate that Bellator and parent company Viacom had nothing to do with the lawsuit.
Coker also stated to MMA Fighting that it reached out to Brock Lesnar about fighting with the company. Lesnar’s WWE contract ends after Wrestlemania in March. He also stated that Bellator would be in on “every single major MMA free agent in 2015.” Apparently this also may mean every pro wrestler wanting to be an MMA fighter as it has initiated talks with former WWE star Alberto Del Rio. Del Rio is slated to do some dates with Ring of Honor Wrestling in the new year but Bellator has reached out. The 37 year old Del Rio (real name Jose Rodriguez) has an MMA background including two fights in Pride which includes a loss to Mirko Cro Cop in 2003 per Sherdog. His last MMA fight was in February 2010.
The lawsuit filed against the UFC has to be of interest for Bellator and its own business practices. For the cynical, the fact that Coker did not read the lawsuit or watch the press conference announcing the lawsuit allows him plausible deniability on commenting on his impressions of what was filed and what he thinks becomes of it. Certainly, Bellator lawyers are keeping an eye on the litigation that is evolving in San Jose. Yet, Coker denying that Bellator is “minor league” is not surprising. As the head of the organization, he does not want the company characterized in that way as it sends a message to fighters, sponsors and advertisers.
Will Bellator business come into scrutiny if the UFC lawsuit gets to substantive legal issues? Certainly. But, even before the lawsuit, in January of this year White stressed that Viacom-backed Bellator was a competitor (h/t MMA Junkie). Coker’s comments appear to indirectly support White’s statement here which may be beneficial for Zuffa in the lawsuit.
As for its strategy in 2015 of actively pursuing free agents, looking at a pair of 37 year olds (Lesnar and Del Rio) may not be best for competition but as we are seeing, MMA is moving to more entertainment than pure sport. Bellator’s biggest night occurred with a Tito Ortiz-Stephan Bonnar main event. The UFC recently signed 36 year old CM Punk. Signing Lesnar would be huge for Bellator. Although the former UFC Heavyweight Champ may be past his prime, he is a proven draw. Besides Lesnar and Del Rio, if Bellator can secure quality free agent fighters in addition to “brand name” talent, it can continue to build toward competing with the UFC.
November 29, 2014
The Sports Business Journal revealed its annual reader survey on various topics related to sports business. This year included questions about the UFC, WWE and boxing.
In a survey related to over the top networks, readers indicated that the UFC is the “Fight sport” that will see the biggest growth over the next five years. Of the 684 readers that responded, the UFC garnered 72% while boxing drew 17% and the WWE had 11%.
It also asked readers which over-the-top service was their favorite. Of the 818 responses, NFL Now drew the most votes with only 11%, followed by 120 Sports with 9%, WWE Network with 4% and then UFC Fight Pass with just 1%. Notably, 75% of the respondents stated it did not watch any of them.
On an unrelated, yet interesting note on digital league subscriptions, readers found MLB.tv (22% of the 818 respondents) their favorite followed by NFL Sunday Ticket (18%) with NHL GameCenter Live coming in third (14%). This is interesting considering the NFL usually takes tops with its coverage.
SBJ indicates it has a readership of over 54,000 with many business executives in sports reading the trade publication. The UFC is periodically featured in the publication and the UFC and WWE both advertise in it. Obviously, the survey is not based on anything other than the opinions of the readers. Still, it’s an interesting viewpoint on the business from those that do not closely follow the UFC. With the “growth” aspect, it’s clear that the UFC is moving into more global markets and are forging overseas television deals to advance its product. The WWE is already global and it depends on what organization you look at when looking at boxing. Certainly, Top Rank is trying to tap into the Chinese market. As for the over the top networks, it appears that we are still in the “early adopter” stage for the platform. The WWE has gone all in with its network but the UFC seems to be doing much better with Fight Pass despite the perception from the survey.
August 13, 2014
Welcome to another edition of The Wrestling Post where we write about the WWE Network launching overseas and the news that tickets demand are lowest in four years for Summerslam.
WWE Network launches overseas
The official launch of the international over the top network went live this week as it was made available in 170 countries outside of the United States. The hope is that it will pick up much needed subscribers after meager additions after the company’s second quarter. In addition, in order to entice fans that do not want a longer commitment, it is offering two other tiers of subscription.
Via WWE press release:
The U.S. English language version of WWE Network is now available, on an over-the-top basis, in more than 170 countries and territories, including Australia, New Zealand, Hong Kong, Singapore, Mexico, Spain, and the Nordics, among others. The network is expected to be live in the U.K. by this October and plans for the network in Italy, UAE, Germany, Japan, India, China, Thailand and Malaysia will be communicated at a later date.
For $9.99 (U.S. dollars) per month with a six month commitment, fans have access to 24/7 programming, all 12 live WWE pay-per-view events, and the most comprehensive video-on-demand library. In addition, subscribers can now choose a monthly offering at $12.99 (U.S. dollars) with no commitment and the ability to cancel at any time. The $12.99 price point is a change from the previously announced $19.99 monthly plan and allows WWE to offer an option with no commitment that we believe better reflects the variety of economies that exist internationally.
Payout Take: We will see how many subscribers latch on to the WWE Network. Overseas growth had been key in the past for WWE traditional businesses. Certainly, the WWE hopes that proves the same with its network.
Summerslam Ticket prices lowest in 4 years
In addition to the WWE Network subscriber disappointment, tickets for this Sunday’s big event, Summerslam, ticket demand for this year rivals that of UFC 174.
According to TiqIQ, the average price for SummerSlam is currently $205.99 with a get-in price of $67, both lows since 2011. Last year the average price was $213.71 with a get-in price of $71. Neither year come close to the peak from 2011 and 2012, which had average prices of $248.31 and $249.64, respectively, with a get-in price of $75.
Payout Take: Take it for what it’s worth as the article was written by the CEO of TiqIQ and he sources his own company for the ticket information. Summerslam 2014 is likely not as bad as UFC 174, but if we assume that the ticket demand is down from last year, it reflects a bad spate for the WWE. Even with Brock Lesnar-John Cena in the main event, the interest appears to be off for this year if we are basing it on the ticket demand. Due to cost-cutting measures from the expenses incurred from the WWE Network, the WWE did away with its mini-exhibition, Axxess, during Summerslam although it will have a scaled down version.
May 15, 2014
Variety reports that the WWE has come to terms with NBC Universal and will stay with its USA and SyFy networks. While financial terms have not been disclosed, the decline of its stock price may foreshadow a lower than expected renewal rate.
In after-hours trading Thursday, the stock had fallen almost 24% to $15.50. Of course, this may also be due to the announcement that its WWE Network may not make up lost money from PPV and on-demand revenue until 2015.
Per a WWE press release, the company “reached a multi-year agreement in principle with NBCU for the renewed U.S. licensing of WWE’s flagship programs and ratings juggernauts Raw and SmackDown.”
The announcement that Nikki and Brie Bella would be attending the NBC Universal “up fronts” on Thursday was a sign that the WWE reached an agreement with NBCU for its rights fee deal. However, the deal is likely not what the company had expected.
The WWE wanted $280 million according to Dave Meltzer of The Wrestling Observer in his May 14th podcast. While some analysts had predicted that the WWE doubled its $140 million deal, it was downplayed by the WWE. In its press release announcing the domestic deal, it also announced its work on deals in the U.K., Thailand and its intent to selling its rights in India. This would be something that would not be highlighted if it received a great deal.
The WWE earned $106 million of revenue from domestic broadcast rights in 2013 and $55 million overseas according to the Wall Street Journal.
Based on the recent history of sports deals, including the news earlier this week that the MLS brokered a big deal with ESPN/Fox/Univision for five times the current value of its television deal, the WWE had hoped it would have capitalized on the market.
However, it appears that the WWE overvalued its worth. While it has strong ratings for its RAW and SmackDown brands, its advertising rates were comparatively low. There is also the perception problem. Although revenues have grown since the WWE has gone family friendly from the “Attitude Era” of the 1990s, the mainstream view of professional wrestling remains that it is low class and the choreographed violence is unappealing.
With all the good news of the launch of the WWE Network coinciding with the rise in the WWE stock price exceeding $30 for a brief time, the news of its rights fee deal may cause a short term depression for investors. In fact, the downward spiral in after-hours trading reflects this.
From NBCU’s perspective, renewing the WWE helps the value for the USA Network from a PR standpoint as Raw is one of the top-rated shows on cable. This helps its overall cable ranking. It can promote itself as one of the best in cable even though the WWE may not add much in overall financial value.
It will be interesting to see how WWE stock reacts in the next couple days when financial terms are released.
April 10, 2014
Welcome to a special look at Wrestlemania XXX which took place at the Superdome in New Orleans, Louisiana.
Ultimate Warrior passes away
Perhaps the news of the death of Jim Hellwig (aka The Ultimate Warrior) has overshadowed the post-Wrestlemania news. Hellwig was inducted into the WWE Hall of Fame, made an appearance at Wrestlemania, signed a deal to be an “ambassador” for the WWE and appeared on television on the company’s signature show, Monday Night Raw. News broke late Tuesday night that he passed away in Arizona.
Similar to the passing of Randy Savage, the outpouring of condolences for the death of The Ultimate Warrior likely brought back fond memories of a person’s childhood for many that grew up watching him.
Attendance and gate
According to a WWE press release, it was a sellout with a gate of $10.9 million with 75,167 in attendance. Sunday’s event landed 5th in all-time Wrestlemania attendance.
For those in attendance, it may have been easier for fans to obtain unauthorized WWE merchandise as a Louisiana District Court denied the WWE’s motion to stop and confiscate bootleg merchandise from being sold in the area. An order like this is usually allowed as a way to protect the intellectual property of the company. However, the court decided it could not legally give the WWE this broad authority without identifying these potential infringers more specifically.
Don’t bet on pro wrestling
While we won’t necessarily get into the storylines from the night, it should be noted that The Undertaker’s win streak of 21 consecutive wins at Wrestlemania was broken by former UFC Heavyweight champion Brock Lesnar. While this was scripted, a gambling web site lost money on the fight as it expected that the WWE would not let the Undertaker lose. Fox Sports reported that the odds ranged from 14 to 1 and 8 to 1 for Lesnar to prevail. The maximum bet was $100 although some people were allowed to bet “as much as $500 on Lesnar.”
UFC hypes Lesnar
Not only was Brock Lesnar a part of Wrestlemania, but the UFC took advantage of the hype of the event by having the Rock (below), Jim Ross and Steve Austin talk about the former UFC Heavyweight champion. All of the videos were “Fight Pass Exclusives.”
WWE stock takes a hit
The day after Wrestlemania, the WWE announced its subscribers for the network. To the dismay of investors, it announced it had slightly over 667,000 subscribers which were below Wall Street expectations. While the WWE believes it will hit 1 million by the end of the year (the break-even point for the network), the stock fell almost 20% on Monday. At the end of trading Thursday, it is down to $21.12.
The WWE received a lot of mainstream hype for the 30th edition of the biggest professional wrestling event of the year. Most of this was focused on the new network and how it would fare airing such a heavily watched event. To its credit, the video stream had no noticeable hiccups which were a good sign for the future of the product. The question will be whether the negotiations for its rights deal will be affected in any way.
Payout Take: Although the stock is taking a drop, the broader takeaway from the event was that it did not suffer any tech issues which was a major concern considering the amount of problems it had when it first launched in late February. At least this shows that the product holds up. The next big test for the company is a rights fee deal which is anticipated to occur sometime late April/early May.
April 4, 2014
This past week, the U.S. Supreme Court denied review of a copyright infringement lawsuit from a musician that claimed that Floyd Mayweather, Jr. used a version of his song without his permission at Wrestlemania 24.
By denying musician Anthony Dash’s request for the Court to review his claims, it upholds a ruling that the musician was not able to prove he suffered monetary losses when Mayweather used a version of his song for his entrance music at Wrestlemania 24 in 2008.
The background facts of this case are interesting as Mayweather signed on to do a match at the WWE’s biggest event of the year. It’s fairly common for celebrity guests to make appearances at this event. The contract Mayweather signed with the WWE did not include specifics on what entrance music Mayweather would use. The WWE had communicated to Mayweather that it had selected a 50 Cent song for his entrance. But, the night before the event Mayweather’s manager told the WWE he would enter using another song and represented to the WWE that they had rights to it and granted the WWE the right to use it during his appearance. The entrance music played for 3 minutes as Mayweather came in for his match against The Big Show.
Mayweather used the entrance music at one more WWE event.
Dash claimed that the entrance music played by Mayweather contained his copyrighted instrumental music over lyrics. While he claimed that in 2005 he created the instrumental of the song, he did not file a federal copyright for it until 2009.
The court held that Dash could not prove actual and profit damages claims stemming from the use of his work for entrance music. Specifically, the court was not impressed with the report produced by Dash’s expert claiming that he was entitled to $1,019,226 in actual and profit damages for the infringement at Wrestlemania alone.
Payout Take: The crux of the issue centered on whether the musician could prove damages as a result of the infringement. The report provided by his side appears overblown by just looking at the amount claimed. I am half-joking when I write that the U.S. Supreme Court timed the issuance of this denial of review during “Wrestlemania Week.” The underlying facts of the case are amusing considering the change in entrance music and the subsequent request for over $1 million for 3 minutes of playing a song of a relative unknown musician. With the U.S. Supreme Court finding in his favor, The Money Team gets another win.
March 23, 2014
Welcome to another edition of The Wrestling Post. This week we look Total Divas ratings, WWE stock and Dish Network plays hardball with the WWE.
Total Divas Ratings for Season 2
The first episode of the second season of Total Divas on E! debuted last Sunday with an average viewership of 1.07 million viewers. The ratings are below the season 1 average of 1.34 million.
Payout Take: The one hour premiere likely did not do as well due to the lack of the lead-in of “Keeping Up with The Kardashians.” Still, to think that this show is doing over 1 million viewers on the biggest night of television (Sunday night) for the week are remarkable.
Would the WWE Sell?
Things are bullish with the WWE stock nowadays as the launch of the WWE Network and the potential for a huge payoff with a new rights deal expected later this spring. But, would the WWE sell to the highest bidder? This is the question posed by Bloomberg in a blog post earlier this week.
The short answer to the hypothetical question is no. WWE stock is parsed into two distinct groups, Class A and Class B. The Class A shares are held by regular stockholders while the McMahon Family owns Class B stock. With Class B stock comes 10 votes per share which means essentially Vince McMahon controls the voting power of the company.
But rumors of AMC Networks merging with the sports entertainment company have been brought up although it appears that these rumors are only “fantasy matchmaking.” While neither AMC or WWE have commented on the rumors, this does not mean much but for bloggers to speculate and generate page views.
Payout Take: Perhaps a conspiracy theory but rumors that the WWE would sell could be the WWE themselves generating rumors to drum up “newsworthy” items as it postures in rights fees negotiations. It would be hard to believe that the WWE put itself in this position in order to sell. Moreover, the perception of Vince McMahon is similar to that of Dana White as the leader of their respective organizations. Neither one would want to lose control of their companies. The company was built by McMahon and no matter how much money is offered, it’s unlikely that he will sell or merge.
Something wrong with WWE Earnings?
Seeking Alpha penned an article questioning whether WWE’s earnings quality come from sustainable sources. The web site cites Thomas Reuters research in coming up with its concerns for the stock.
First, the research indicates that the operating profit margins have been decreasing steadily over the last three years. Secondly, the company has poor free cash flows in its last five quarters. This is likely due to the investment into establishing the WWE Network. Of course, the investor concern is that the network will impact the PPV revenues. Notably, the report cites “other programming like the UFC’s “Ultimate Fighter.” Finally, there was a concern of bad debt. The question here is that the WWE’s allowance set aside for accounts receivables that it does not expect to collect from clients had fallen over the last three quarters.
Payout Take: The article is an interesting look at concerns over the stock. However, there are questions regarding its questions. A lot of money it has spent in the recent quarters has gone to the development of the WWE Network. There are other expenditures as well including the opening of a new state of the art training facility in Florida for NXT (development territory). There is also the issue of its WWE Studios which has seeped money over the quarters after failed attempts to make stars out its own WWE characters and its attempts to revamp that unit.
Dish Network gets chesty with WWE
Dish Network announced this past Thursday that it would not carry Wrestlemania XXX according to Cageside Seats. The move by Dish appears to be in reaction to the launch of the WWE Network.
In its official statement, Dish indicated the move was due to the WWE “not willing to adjust PPV costs to satellite/cable companies, which is unfair to their customers.”
Payout Take: With the network launch, distributors such as Dish and DirecTV were likely upset that the WWE is putting its PPVs on its subscriber-based network. This directly affects revenue the distributors usually shared with the WWE. Thus, the distributors are losing out on the $60-$70 it anticipated fans would pay to watch the PPV. While there was a likelihood that those not subscribing to the network, yet still fans of the WWE would order the PPV, the number is likely to shrink exponentially due to the popularity of the new network. We will see if DirecTV follows in not carrying Wrestlemania XXX.
February 20, 2014
The WWE announced its fourth quarter earnings on Thursday and despite not beating loss per share estimates, its stock reached a 52 week high during the day. In addition, Vince McMahon spoke about the CM Punk situation.
As it relates to Punk, when asked about his abrupt departure from the WWE, McMahon indicated that he was on a “sabbatical” and left it at that without further follow up. Without going further and/or causing a SEC investigation on the matter, McMahon left the door open for future work with Phil Brooks. Regardless of the rumors of Punk released from the company, McMahon believes that its likely Brooks will return. Certainly, how professional wrestling is, returning to the ring is always a possibility.
As for the financials, the WWE loss per share was at $0.10 per share. Analyst estimates had the company’s losses per share for the fourth quarter of 2013 at $0.05 per share.
WWE’s total revenue for Q4 2013 was $118.4 million and it had a net lost $7.9 million. In comparison, Q4 2012 saw it take in $115.1 million in total revenue which earned a $0.6 million profit. The much-anticipated WWE Network costs, weak DVD sales (likely due indirectly by the Network) and “compressed television production margins” as stated in the WWE press release were the reasons for the losses this year.
Some other notes:
The company also released information for the full year 2013. Last year, WWE made a $2.8 million profit with revenues at $508 million. 2012 saw $31.4 million in profits with $484 million in revenue.
PPV revenue increased during the Q4 due to having one more PPV in the quarter. It earned $15.7 million for the quarter.
The WWE’s consumer products business decreased 31% to $14.1 million due to “declines in the Company’s home entertainment business and toy licensing.” Although licensing revenues declined, domestic retail toy sales increased in 2013. It also indicated that “construction toys” have demonstrated strong growth. We may see more of this with its recent renewed agreement with Mattel.
The WWE’s movie division showed a $5 million revenue increase over 2012 but this was mainly due to timing of the release of the movies in 2012.
WWE stock was up 7.5% to $24.74 at the close of trading on Thursday.
The overall takeaway from the numbers is that the WWE has spent a lot of money on the WWE Network. One need only compare the revenues vs. profits in 2012 versus 2013 to know a bulk of the revenues is being reinvested into the Network. The WWE has already projected a $12M to $15M loss for this year’s first quarter due to the costs to launch the Network. The good news is that most of its key areas are experiencing growth and while there may be some concern with its consumer products division, the recent Mattel deal should help with sluggish sales. But of course, the big news is the bullish feeling analysts have about the potential rights fees deal the WWE is set to sign.
February 3, 2014
Welcome to another edition of Payout Perspective. This time we take a look at the Super Bowl Weekend card taking place at The Prudential Center in Newark, New Jersey.
Barao handles Faber
To paraphrase Richard Sherman, “Barao is the best fighter in the game, when you put up a mediocre turtle defense like Faber, that’s the result, you going to get. “
A thumbs up couldn’t stop Herb Dean from calling this fight off. Even if the fight would not have been stopped, it likely would have delayed the inevitable.
Aldo demos Lamas
“I’m just ‘bout that action boss. “ – Money Lynch
At least rounds 1-4 Jose Aldo brought the action to Ricardo Lamas. The combinations were devastating as were the leg kicks which were reminiscent of Aldo-Faber from WEC days.
Attendance and Gate
UFC 169 drew 14,308 in attendance for a gate of $1.651 million based on the announcement at the post-fight press conference. The last time the UFC came to New Jersey in April 2013 for Jones-Sonnen, it drew 15,227 for a gate of $2.7 million. The actual numbers announced by the UFC point to a disappointing show when there was opportunity for bigger numbers with a lot of sports fans in the area for the Super Bowl.
Only Jamie Varner and Abel Trujillo received bonuses as there were no submissions on the card. Notably, there were 10 decisions out of 12 fights on the card.
Varner and Trujillo received $75K for Fight of the Night and Trujillo scored the standard $50K for the KO of Varner.
Pre-UFC 169 Promotion
In order to appeal to those coming out for the Super Bowl, the UFC sent out an email to Seahawk fans (and likely Bronco fans) on its mailing lists reminding them of UFC 169 the day before the big game.
The UFC Countdown show worked around the language differences of Jose Aldo and Renao Barao to tell their stories. I think this is a major hurdle in promoting both of these guys. It’s nothing against them but I think many English speaking fans find it hard to get behind them because English is not their first language.
The UFC also brought its championship belt to NFL Super Bowl media day but were quickly muted by NFL PR staff. The NFL thought that the UFC was the WWE and didn’t want it to outshine its day. It was not until Jay Glazer straightened out the situation with the NFL did the staff at media day allow the UFC to stay so long as the belt didn’t get on the podium.
Then, look which belt the Seahawk GM was wearing:
Probably small potatoes here, but shouldn’t he be wearing the UFC belt? According to SB Nation, the picture was taken prior to the Super Bowl so maybe there’s an excuse for the UFC.
The sponsors in the Octagon included the UFC”s UCasino.com, Dodge, Toyo Tires, Xyience, Harley Davidson, MetroPCS, Musclepharm, History Channel and Bud Light had the middle of the Octagon.
The History Channel’s series, “The Vikings” was a sponsor for 169 and it showed a promo video that included lots of blood and gore. “The Vikings” logo on the Octagon mat was pretty hard to see.
It appears that Auto Shopper received the same deal as Dynamic Fastener as many fighters had the two sponsors on their shorts. Dynamic Fastener appeared to own the back side of fighter shorts while Auto Shopper had the front of shorts.
MetroPCS offered digital autographs of Urijah Faber.
— UFC (@ufc) February 1, 2014
Post-UFC 169 Headlines
Who’s next for Aldo? Short answer is Anthony Pettis. The cynical question is what to do when/if Pettis gets injured. The Pettis showdown would mean Aldo gives up the 145 belt (I guess you can’t hold belts in two different divisions) and the UFC could hype up a “superfight.”
Anyone left for Barao? Is this the definition of clearing a division? While Aldo may have Chad Mendes left in his division if he decides to stay, Barao has no one compelling to defend his belt against. Maybe Dominick Cruz if he can ever get back but aside from that, TJ Dillashaw?
Odds and Ends
Toyo Tires re-signed with the UFC and will be an official sponsor for the company through 2015.
I wonder if Chris Caraiso earned any extra points from his sponsor, Training Mask, after donning the mask before facing off at weigh-ins.
Speaking of weigh-ins, I do not recall ever seeing so many people excited about making weight.
Faber wearing Uggs at weigh-ins? Does that make him the Tom Brady of the UFC?
Super Bowl Fact. Super Bowl Rings: Dan Marino – 0, Tavaris Jackson – 1
Unfortunately, the greatness of Renan Barao and dominance of Jose Aldo will not mean much when it comes down to PPV buys. In retrospect, when Fox announced that the UFC would be a part of Super Bowl weekend, one would have envisioned much more of a collaborative promotion between the NFL-UFC and Fox. However, there was not much in terms of promotion of this event. Even when the UFC made an appearance at Super Bowl media day, they were not recognized by NFL PR.
The nonperformance of the marketing efforts aside, UFC 169 may not do well in terms of buys simply because of the fighters on the top of the card. Fighters under 155 pounds do not draw on PPV. Is the UFC doing these fighters a disservice by not marketing their divisions correctly? Or, are the fighters not marketable? Urijah Faber could have been that guy but with Saturday’s loss he won’t be able to get another shot unless Barao loses and Faber gets on another win streak. Arguably, the top three fighters in the UFC fight below 155: Aldo, Barao and Demetrious Johnson. But, that does not seem to equate to viewers.
Due to the card and the lack of buzz, UFC 169 will likely do somewhere around 200K PPV buys.
January 10, 2014
LA Times reports that DirecTV may no longer carry WWE PPVs as a result of its announcement that it is launching a new over the top network.
Pay-TV distributors and the WWE usually split the cost to consumers 50-50 on PPVs thus making it a “solid revenue source,” according to the Times article. WWE contends that it will continue to air its PPVs for those unable or unwilling to adapt to the WWE Network but DirecTV sees that as cutting into its revenues.
Via LA Times:
“Clearly we need to quickly re-evaluate the economics and viability of their business with us, as it now appears the WWE feels they do not need their PPV distributors,” DirecTV said in a statement, adding that the audience for its events “has been steadily declining, and this new low-cost competitive offering will only accelerate this trend.”
The WWE stated that it hopes to continue its relationship with its distributors and allow “fans the choice between two offerings.”
Although we’ve heard nothing but praises for the WWE Network, we get the first bit of criticism from one of the company’s working relationships. From DTV’s perspective, it’s obvious that the new network is going to cut into the revenue it expects from the WWE product especially with Wrestlemania, its highest purchased and priced PPV, on the network this year. The WWE would like to get both bites of the apple with it receiving revenue from the network and those purchasing it via traditional PPV. Will other distributors follow DirecTV’s cue in discontinue offering WWE PPVs. We shall see how this turns out.