WWE released the financial information for what they are calling a "transition" period as they adjust their fiscal calender. As usual, WWE business was strong even in a year where some would say the creative direction was in a down swing. Between May 1st 2006 and December 21st 2006, WWE made a $31.6 million profit off of $262.9 million in revenue. It is important to note that this is down from the $44.2 million in profit for the same period in 2005.What this means is a loss in profit of nearly $14 million, or around 31%. How do you account for such a loss in profits for WWE? The significant downturn of PPV revenue.
To put the loss of PPV into perspective take a look at these figures.
JUDGMENT DAY
2006: 252,000 buys (153,270 domestic buys)
2005: 266,000 buys (167,580 domestic buys)
VENGEANCE
2006: 337,000 buys (205,570 domestic buys)
2005: 429,000 buys (270,270 domestic buys)
SUMMERSLAM
2006: 541,000 buys (330,010 domestic buys)
2005: 634,000 buys (399,420 domestic buys)
As you can see, WWE did not do as good of a job at enticing their television viewers to purchase their pay-per-view shows as they did in 2005.
When Linda McMahon was asked whether UFC or IFL is considered competition for WWE she said they were not. McMahon claimed because UFC and IFL are real sports they are going after different audiences. Linda also went on to claim that UFC and IFL were bigger competition for boxing.
Fortunately for Linda, none of the investors asking questions knew anything about boxing business in 2006. Boxing had a very successful year on PPV with the return of Oscar De La Hoya doing over 900,000 buys. Other fights that included Manny Pacquiao did very strong business. Therefore, fans purchased boxing pay-per-views in record numbers despite the success of UFC in 2006. Boxing is also remaining very strong among older audiences who have more disposable income to purchase PPV. Thus, the audiences of Boxing and UFC have less crossover than UFC and WWE.
Another example of this crossover is this web site and others like it. We are a pro wrestling and MMA site because we see fans wanting to know information on both those sports. No one has ever e-mailed us and asked why we don't cover boxing.
WWE picked a terrible time to deliver poor pay-per-views as they did last year. There were few shows that were outstanding and that made fans feel they're $40 was well spent. It seems WWE is reacting to this news and has loaded the No Way Out show with stars from all three brands. Also announcing the main events for WrestleMania so far in advance tells you there is an effort to make their PPV shows mean more to the eyes of the fans.
My advice to WWE would be to allow wrestlers from all three brands to appear on PPV shows. You can keep the brands separate, but this would eliminate the pressure of a single brand PPV to do strong business on its own. Fans seem to be waiting for the major PPV shows to spend their money and are not interested in single brand pay-per-view shows.
If you were hired as a consultant for WWE and your job was to tell them how to increase PPV revenue, what would you tell them?
2 comments: on "PPVs Lack Power In WWE Financial Report"
I thought the WWE put on about 867 PPV's a year. But seriously they do put on 14 now, if you consider ONS and December to Dismember. I agree 100% that there should only be 7-8 but I'd actually say 6. The big 4 RR, WM, SS and SS. Throw in Vengeance or Judgment Day, in the months before SummerSlam, and No Mercy or Unforgiven before Survivor Series. Another thing is that Vince gears so much damn time towards storylines that don't make a damn at all. If he highlighted the storylines that would be the keys to the PPV's and have a legit undercard of PURE WRESTLING I honestly believe that the E would do better in buy-rates. I know I'm awful Ring of Honor-y with the Pure wresting but I believe that sells, to marks and smarks.
16 last year, actually (New Year's Revolution, Royal Rumble, No Way Out, WrestleMania, Backlash, Judgment Day, One Night Stand, Vengeance, The Great American Bash, SummerSlam, Unforgiven, No Mercy, Cyber Sunday, Survivor Series, December To Dismember, Armageddon)
16 pay-per-views over a span of 52 weeks. Add that to the fact that the cards over the past year, with the exception of a select few, have been weak cards and/or have underdelivered, and you have a fan base that's growing just a liiiiiiiiittle bit disgruntled.
Vince still thinks he can do what he want. Sooner or later, another business genius is gonna decide to have a go at the wrestling industry and is gonna bring him crashing back down to earth.
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