WrestleMania 35 will take place on Sunday evening at MetLife Stadium in East Rutherford, NJ; the annual event marks the culmination of the World Wrestling Entertainment calendar year. Live events remain a staple of the wrestling business – WWE put on 560 events in 2018 – but those shows were responsible for just 15.5% of all corporate revenues last year (down from 19% in ’17). The majority (73.5%) of the incoming cash flow was generated by the company’s media division and newly signed billion-dollar agreements with NBCUniversal (for RAW) and Fox (for SmackDown) ensure content will comprise an even larger percentage of corporate revenues moving forward. But core content rights fees (see: RAW, SmackDown) only accounted for 39% ($130 million) of the total taken in last year. The balance came from WWE Network (29%), advertising and sponsorship sales (10%) and “other” (21%) forms of distribution (think: digital native, international programming). With more than 1 billion followers worldwide across social media platforms (including 40 million on YouTube, alone), it’s “content creation, digitization and international development” that provide the company with greatest opportunities for revenue growth moving forward.
Howie Long-Short: Live shows aren’t as critical to the company’s bottom line as they once were – which is good, U.S. attendance declined YoY during each quarter in ‘18 – but that doesn’t mean the company is any less focused on delivering a memorable experience for ticket buyers. HHH explained at the SBJ World Congress of Sports that because “live events are the most expensive investment [for a fan], we constantly have to over-deliver to show value.”
The increased demand for live sports programming and the rise of streaming services (that seek desirable programming) enabled WWE to negotiate a dramatic increase (3.6x) in the average annual value of their U.S. distribution deals (for core content) in the face of declining ratings. That’s because even with the decline, both RAW and SmackDown “can guarantee television stations 2 million to 3 million viewers/week.” Those numbers may not be impressive by WWE standards, but the shows were still the highest rated on USA Network and bring a weekly audience that would be welcomed by any network.
WWE’s ability to monetize “content across platforms” (and international locales) pushed the promotion to its “highest level of revenue ($930 million, +16% YoY) and earnings” (adjusted OIBDA $178.9 million, +31%) in company history last year. The revenue generated from digital native content (see: Mixed Match Challenge) and large scale shows in both Saudi Arabia and Australia (see: Greatest Royal Rumble, Crown Jewel, Super Show Down) drove the growth of the operating segment.
WWE shares are up +/- $150% (to $89.73) since WM34.
Fan Marino: Licensed reality series are also included within the burgeoning “other” category and McMahon noted during the company’s most recent earnings call that the company would continue to promote that kind of content; WWE has had success with Total Divas (8 seasons), Total Bellas (4 seasons) and their newest series Miz & Mrs. was just picked up for a second season.
Mike “the Miz” Mizanin is the star of that show (along with wife Maryse) and says he’s conscious of his role within the organization. “My job is to be the face of the WWE. To be out there promoting the company. For so long, non-wrestling fans just looked as us as rasslers. My job is to make sure that people don’t look at us like rasslers, that they look at us as entertainers. The show is an opportunity to show who we are, what were are; first time parents in the entertainment business.”
Readers of a certain age might remember Mike as a cast member of The Real World (circa 2003). Mike also participated in several Real World/Road Rules challenges and believes – much like Bill Simmons – that The Challenge is America’s 5th pro sport. Mike told me “C.T., Cara Maria and Bananas are their stars, you have athletes from all over the world competing and they have head to head bouts. It’s truly a battle of the best.”
Mike will take on Shane McMahon in a “falls count everywhere” match on Sunday evening. The feud between the two is personal after the boss’ son put his hands on Miz’s father. Mike says that moment “unleashed a fire inside me that I didn’t know I had. Shane’s going to see a new Miz at WrestleMania, one that takes the fight to a person. I’m glad it’s a falls count everywhere match because the ring can’t hold what I want to do to Shane McMahon.”
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