Reality From Ringside #64
May 10, 2010
By: Doug Lackey of Wrestleview.com
Financial Statements II: Lowering the Bar
My propensity for numbers and statistics has become folklore in the annals of Wrestleview. From the chronological (dates and time spans) to the empirical (buyrates and Nielsen ratings), I have always believed that numbers give the best analysis of all: Unbiased, unprejudiced, and unforgiving.
How can you argue against them?
Sure, some tend to exploit statistical research in order to shove their own agendas in your face… watch any news broadcast on American basic cable for pure examples. There is a difference though between researching in order to form an opinion and researching to validate an opinion.
I have always leaned towards the former. I can’t have an opinion on something if I haven’t read, seen, heard or learned about it.
Such is the case with Wrestlemania 26, its impact on WWE’s bottom dollar and the interpretation of it all. What did WWE do right/wrong? What have they learned/ignored? All in due time young Realists… all in due time.
Before we dive headfirst into the profits and numbers in the millions, I must first cite WWE’s corporate website for the numbers I am about to spout. I did not grab these figures out of midair… hell, how could anyone? I’m not THAT creative…
Imagine your desk littered with quarterly financial statements from the past 3 years strewn in front of you with your notebook and pencil buried somewhere underneath. Charts upon charts of dollar amounts and revenue figures are what I have been staring at. I would like to thank Donato’s Pizza and Bud Light for keeping well-nourished in my endeavor.
You know the drill… I provide the bold-faced facts and realizations, you respond as you see fit…
How detrimental is WWE’s slowly-declining Wrestlemania buyrate?
Ever since the record-making success of Wrestlemania 23, Wrestlemania’s buyrate has seen a continuous deterioration. From nearly 1.2 million buys three years ago to descend below 900,000 may sound more like failing to reach a milestone than a financial plateau, but consider the losses between this year’s Wrestlemania and the one previous.
Wrestlemania 26 with its 885,000 PPV buys accumulated $19 million of revenue. Sounds great until you compare it with Wrestlemania 25’s 960,000 PPV buys and $21 million of revenue. I hope you have realized the first portion of the research: 75,000 PPV buys = $2 million of revenue.
Before you start arguing that Wrestlemania 26 was the first to offer an increased purchasing price for a high-definition event ($10), I’ll ask you to do some math on your own. Divide those PPV buys into their respective revenues. I bet you ended up with a number that was slightly over $21. That’s right… there is no absolute way to find out how many individuals bought each Wrestlemania for a particular price.
Sure Adam Martin, Editor-in-Chief of Wrestleview, may have bought the $65 high-definition broadcast, but someone else could have bought the more inexpensive online-only transmission. Some paid the full $55; others might have watched it for free through vouchers given by their cable or satellite providers.
$2 million lost in revenue compared to last year. Over $8 million lost in revenue over the past three years. Even after WWE increased the price of their events, as well as offer a more expensive choice in high-definition, they lost money.
True, $2 million in revenue is nothing compared to the total $138.7 million earned in 2010’s first quarter. If I were a shareholder though, I would be concerned. In fact, I would be asking this question at the shareholders’ conference call…
What will WWE do differently for Wrestlemania 27?
Do you remember all of those far-fetched predictions I made in last week’s “Reality from Ringside Radio: 3R” about roster shifting and potential Wrestlemania 27 programs? Do you still have a copy of all of your own predictions on you as well? Good…
Take a good hard look at them. Now look at the numbers “885,000” and “1.2 million”.
How do you plan on attracting nearly 400,000 more buyers to your product if you have constructed a pay-per-view event that is almost the same as the one from last year?
The difference between Wrestlemania 26 and Wrestlemania 23 is blatantly obvious and it is something we have been seeing on a weekly basis every Monday: Celebrity guests.
Bringing in celebrities to participate in Wrestlemania itself may sound absolutely dreadful if you are a wrestling fan, but it is music to your ears if you are a shareholder.
When Floyd Mayweather participated in Wrestlemania 24, did it get just as much or more coverage on networks like ESPN and FoxSports than Wrestlemania 26?
When Donald Trump put his hair on the line in Wrestlemania 23, was the publicity just as fervent on shows like ‘Entertainment Tonight’ and ‘Extra’ as it was when Wrestlemania 26 was on its way?
WWE must revert back to celebrity participation and increase cross-media publicity in order to increase the buyrate. It’s that simple… sort of. Both Wrestlemania 23 and 24’s marquee matches involved nearly 2 months of promoting and storyline-building.
Look back on your fantasy card, smarty booker. See any matches where you could throw in a celebrity of any form? Have any ideas for an angle of any kind involving some celebrity facing off against a member of the WWE active roster?
I know I can’t think of any right now. Oh god… did I just hear “Cena-Rock”? Stop it… just stop it… “The Marine” vs. “The Tooth Fairy”… fabulous.
Until next time, mouth-breathers!
Annoy me with your assumptions and affronts… adore me with your adulations and acknowledgements: doug@wrestleview.com
Don’t forget to check out “Reality from Ringside Radio: 3R” this Tuesday on Wrestleview! It’s only available to Wrestleview VIPs though… so sacrifice a Big Mac value meal! Become a VIP! Click here to sign up!