AS I SEE IT 2/10: Thoughts on the chaos at WWE

Posted on 2/10/120 by Bob Magee

Bob Magee
Pro Wrestling: Between the Sheets

WWE came out with their fourth quarter financial numbers
this past week.

What they said and what they didn't say were both notable:

* They didn't have any news on Middle East and India
distribution deals being signed, except to suggest that any
increases in India would only be "incremental".

* They said nothing about the controversies that took place
at WWE's last Saudi trip, or the delays in payment by the

* They didn't explain why long-time co-Presidents Michelle
Barrios and George Wilson were fired, save a general one
regarding different visions for the company.

* Despite repeated questions, Vince McMahon didn't seem to
reassure investors that there would be no issues with
McMahon running both the XFL and WWE, or that there would no
WWE money being used for the XFL.

The part of the call that got the most attention was what
Vince McMahon said about the future of WWE Network.

In a shocking move during the conference call, Vince McMahon
hinted that WWE is close to making "transformative" changes
to WWE Network; including selling PPV rights to a major
streaming service, which would likely get them off the WWE
Network, the major reason most subscribers have the service.

Another option is to remain largely as is with a free and
paid tier. No mention was made of the higher priced tier
that has been in the works, to add EVOLVE and other
independent promotions. McMahon indicated that WWE would
look at adding advertising to the Network if the model
remains as it is now.

McMahon said if they go the route of selling PPV rights that
"WWE will be announcing a deal in the first
quarter....Thats how far along we are.....Theres no more
better time to exercise the selling of our rights to all the
majors who, quite frankly, all the majors are really
clamoring for our content. So that could be a significant
increase, obviously, in terms of revenue...

While he said such a plan wasn't definite yet and nothing
is a must have", he said that WWE would evaluate all options
and do what is best for the company.

Needless to say, fans who read this news were pissed, seeing
little reason to continue to subscribe to WWE Network if
this comes to pass, given that one of the two main reasons
for being on the Network was already taken away when NXT was
put on USA Network in October. This would seem to be the
other one.

So, if WWE takes this step, what are the possibilities?

* Peacock - NBC's new streaming service, named after the
logo of NBC, set to launch on July 15, with early
availability for Xfinity customers starting on April 15. An
ad supported version of Peacock will be available free for
Xfinity customers that have the X1 operating system.

This would seem to be the most likely option, given WWE's
longtime relationship with NBC and USA Network; and the fact
that the person in charge of Peacock is NBCUniversal Direct-
to-Consumer and Digital Enterprises chair Bonnie Hammer, a
major longtime ally of WWE. Beginning in 1989, Hammer became
a programming executive for Universal Television and pushed
WWE as a major part of USA Network's programming.

In a 2011 New York Times feature, WWE Chairman Vince McMahon
praised Hammer. "She just came in and rolled up her
sleeves...She taught us a lot about network quality writing,
story arcs, character development. She really helped the
overall brand...." Hammer returned the favor to McMahon by
crediting the success of USA Network as being "one third
original series, one third acquired shows, and one third
World Wrestling Entertainment."

While NBC certainly has a library in place to offer
potential subscribers on Peacock with hundreds of movies,
series libraries of shows like The Office and Parks and
Recreation, live sports, as well as original series; WWE
PPVs... especially the traditional Big Four of Royal Rumble,
Wrestlemania, Summer Slam, and Survivor Series would be a
major addition.

* ESPN - ESPN has been buying up programming left and
right for its ESPN service, and has already done PPV with
UFC, which moved all their PPVs to ESPN in May 2018.

While ESPN has no relationship with WWE, Disney/ESPN has
been buying all sorts of sports related programming for
ESPN , and already has a PPV infrastructure in place, strong
enough to have handled an estimated 1,000,000 buys for UFC
246 featuring Conor McGregor-Donald Cerrone. This would seem
the next best option given the reliability factor, a bugaboo
that has held back many from subscribing to the Network,
which has been notorious for glitches during major PPVs. But
there's a question if Disney would want two major PPV
franchises, and would want any potential stigma of offering
entertainment versus sports.

* Amazon Prime - One of the two 900 pound gorillas in
streaming programming. It's been rumored to have interest in
airing the MLW Fusion show, which currently airs free on You
Tube. While this would seem to rule out WWE, investment
firms suggest Amazon as their pick for most likely choice to

* DAZN - A major boxing/MMA streaming service, most known
for airing major boxing events with Canelo Alvarez, GGG,
Andy Ruiz, Anthony Joshua; and Bellator PPVs. There's been
no word of interest in pro wrestling.

* Hulu/Hulu Live/Hulu Plus - While it already carries WWE
content, it's only existing WWE programming plus 205 Live.
There seems to be no plans for independently produced
programming. Disney has a 60% ownership share, and plans for
Hulu to augment ESPN and Disney as being the streaming
option for "general entertainment".

* HBO Max - Starting in May, the next to least likely,
given that Warner Media airs All Elite Wrestling on TNT.
Kevin Reilly, who just signed AEW to a four year extension
three months into their first season, is in charge of HBO

* Netflix- Least likely of all, given that it carries no
live sports whatever and seems to have little or none
planned for the future.

Some would argue all this came about as a result of UFC's
success at moving their PPVs from their own Network
equivalent, UFC Fight Pass, in May 2018.

McMahon's plans to explore making PPVs available to outside
streaming services were apparently kept highly secret to all
but the highest levels of WWE. Not even those working in
the WWE Network department knew about it. It's not out of
the realm of possibility that these plans were the reason
George Barrios and Michele Wilson were fired, given that
Wilson and Barrios were the prime drivers of the creation of
WWE Network, and that they may have fought McMahon on this
major change.

Another rumor was that Wilson and Barrios wanted to see
Vince McMahon invest in the company to raise stock prices,
whereas McMahon wants to spend to restore WWE dominance over
the industry by establishing multiple NXT groups in other
countries, and in signing up talent to longer term deals to
insure they stay with WWE and not move on to AEW, New Japan,
or elsewhere. Disagreements about both the Network and this
may have played a part in their dismissal.

WWE stocks have taken a major hit as a result of the Wilson
and Barrios firings, dropping more than 25% of their value,
then taking another further beating following Thursdays
earnings report and on Friday closed nearly 5% lower, ending
the week trading at $42.93 per share.

With streaming networks... the best comparison to what's
being proposed was seen with UFC's major change. After some
initial reluctance by UFC fans used to the traditional PPV
model and UFC Fight Pass, fans showed they'd buy in to ESPN
for the right fight with UFC 246 featuring Conor McGregor-
Cowboy Cerrone. As fans get used to streaming services in
general and ESPN in particular, I think such services are
the future of PPV.

Even major cable providers like Xfinity see this with their
X1 operating system, which is a hybrid of traditional cable
and streaming, allowing subscribers to access streaming apps
like Netflix, Amazon Prime, (and their own Peacock service
beginning in April), and music apps like Pandora, Amazon
Music directly through their X1 boxes.

UFC Fight Pass still exists, with subscribers having access
to prelims for PPVs, as well as over 200 live events to the
MMA equivalent of wrestling independent, including Invicta
FC, GLORY Kickboxing, QUINTET (Team Submission Grappling),
Eddie Bravo Invitational, Polaris, and others.

The equivalent for the WWE Network, if any potential
streaming partner agreed, would be to have the past WWE PPV
and programming library available and to go ahead with what
had been planned with EVOLVE and various independent
promotions, especially the WWE affiliated European indies,
NXT UK, and future NXT promotions which have been suggested
in Japan, Germany, Australia, Mexico, and Canada. Whether or
not WWE fans would still be willing to continue subscribing
remains to be seen.

Until next time

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