WWE has Doubled Profits Since 2019, Traditional Sports Properties Should Follow Their Roadmap

WWE has Doubled Profits Since 2019, Traditional Sports Properties Should Follow Their Roadmap

If you start with the premise that sport is entertainment and understand that the big four leagues have transformed from live event businesses into media properties as broadcast rights have skyrocketed, then you recognize it is logical for clubs within those leagues to look around at what successful entertainment companies are doing and try to replicate some of their best practices.

Few entertainment (and sports entertainment) assets have done a better job than WWE over the last four years. Publicly filed documents show company EBITDA was ~$175mm in 2019. By the time its merger with the UFC occurred in Sept. ’23 annual profits had reached ~$415mm, and WWE’s stock price had more than doubled since president Nick Khan assumed the position in August of 2020. 

Khan is speaking at JohnWallStreet’s Fall ’24 Sports & Media Huddle later this morning. In a prep call for the event, he identified several strategic initiatives that collectively have enabled WWE to double its profits during his COVID-impacted tenure; many of which can be replicated by more traditional sports properties.

The list included the company’s pursuit of site fee growth.

WWE collected a $150K cash incentive to bring WrestleMania 38 to Dallas, Texas in 2021. 

“At the same time, we knew what UFC was commanding,” he recalled. “We went out and said, if Dallas’s own economic impact report, which both the Dallas and Fort Worth Mayors cited in a Dallas Morning News piece, stated that WrestleMania created more than a $200 million economic impact on the area, then WWE should be receiving more than $150,000 and value in kind" (think: posters around city).

Minneapolis agreed and has since committed seven-figures for the right to bring SummerSlam to town in 2026.

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The key to a sports property commanding a large site fee from a locale is staging an event that will draw out of town fans into the market. 

“We believe that is the whole purpose of the exercise,” Khan explained. “To bring people in to book hotel rooms and spend money shopping and at restaurants on weekends where they otherwise wouldn't.” 

WWE has aided efforts to drive tourism by constructing multi-day, festival-like events around WrestleMania and SummerSlam. Fans attending both nights have shown a propensity to stick around in between shows for the ancillary programming.

Most of WWE’s premium live events (PLEs) remain one-night affairs. However, those shows have all been moved from their long-time home on Sunday night to Saturday evening.

The logic behind the switch was simple.

Saturday is “a better night. People have more fun, are willing to stay out later, and can often feel comfortable in spending more money,” Khan said. 

WWE also wants to avoid going head-to-head with the NFL as often as possible.

“One of our first big events coming out of COVID was up against Tom Brady's return (with the Buccaneers) at New England,” the WWE president said. “A group of us looked at each other and said let’s simply move that one up a night to Saturday.”

The company’s intense focus on selecting the right dates for its events has led to a frontloaded PLE slate.

"We are 52 weeks/year but go heavier when football isn't in season as there are so many options in the fall to compete with for the fans' time and hard-earned dollars," Khan said.

Challenger leagues playing late season or postseason games post Labor Day would be wise to re-evaluate their scheduling approach. 

The same could be said for established volume sports properties. It’s become clear that less is more. 

WWE has doubled profits while cutting down on the number of non-televised events it holds annually by 75%. The first thing Ari Emanuel and Mark Shapiro pointed out after the TKO merger became official on September 12, 2023, was that there were too many WWE event dates on the calendar.

And those non-televised house shows were profitable for the company as they have no associated production costs. 

But they also likely would have watered down the product and/or diluted the audience.

“It’s simple supply and demand,” Khan said. “By decreasing the supply of our non-televised live events, it created more scarcity and the demand for our remaining shows went up significantly.”

The ability to drive fans at capacity has enabled WWE to revamp its ticket pricing strategy. While the company has kept the cost of upper bowl tickets family friendly, it has raised pricing and established new premium experiences for deeper-pocketed customers.

WWE has also reduced the size of its in-venue production, opening up more seats to sell.

It’s not rocket science—and any property can follow the model. It just must be willing to potentially leave some revenue on the table in the short-term and upset what has traditionally been done.

Finally, WWE has increased its presence overseas.

“We didn’t want to be a U.S.-based sport that simply piped out content internationally,” Khan said. “We believe we are a global property and want fans globally to feel passionately about it worldwide.”

But to develop that kind of fandom overseas, a rights owner must bring big events there. Roughly half of the promotion’s PLEs are now held abroad.

WWE held Bash at Berlin this past weekend. It was the first WWE PLE in Germany’s history.

Naturally, the fan excitement in the market was palpable. The event broke the company’s arena gate record (for the third time this year).

European soccer leagues sending incomplete rosters to the U.S. in the summer are missing the point–and the opportunity to build fandom. Sports fans expect to see the best and properties must put their best foot forward if they’re going to cut through.

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