[audio] #85 Vince McMahon & WWE

April 5, 2016

Play
Subscribe: iTunes | RSS

I take the position that Vince may be doing the right thing for WWE, from his point of view.

He’s not trying to create art (like Breaking Bad, Game of Thrones, or NXT), he’s serving us fast food. He’s serving us pop music. Because his goal is to be as big of a company as possible by serving as large an audience as he can. It’s hard to be a global empire by producing pure artful wrestling alone.

If the question is if he should be creating art or fast food, that’s a different topic. If the question is how can he make the most money, it’s probably thru the way he’s doing things now.

I compare WWE 2015 revenue (658M) with New Japan Pro Wrestling (27M, 2nd biggest wrestling promotion in the world) and the NFL ($13B), MLB ($9.5B), Premier League ($5.35B), & NBA ($4.8B).

Second Screening:
More people are doing other things while having tv on in the background. People are barely paying attention to the shows or ads.

At first this seems bad for the advertisers. But maybe ads will evolve to the point where they will adjust and use more techniques to enter the subconscious mind even if we’re not paying full attention. Like hypnosis. All they want us to do is to keep watching the show with volume on. Or even random glaces of a visual ad will do the trick.

So WWE benefits by having about 6M (raw + sd) people tuning in half-assedly to a mediocre program. Then they put the clips on hulu & youtube to capture maybe a few million more eyeballs.

It takes more effort+money to produce a high quality show and way less to produce mediocre eye candy. And high quality has limited growth potential and lifespan while mediocre can keep going. Breaking Bad had 5 seasons while RAW is entering its 24th with 1,193 episodes.

Real sports is also super boring & mediocre programming. Football, Basketball and especially Baseball, super boring 95% of the time. But they keep thriving and growing.

Postscript:
One thing I noticed after recording is that the UFC ($600M) makes nearly as much money as WWE. I found that surprising and could be a case against my own point. But real combat sports and predetermined wrestling may not have much of a similar audience or as large a global potential.

I also found a post on WWE revenue history since 1994.
Their peak revenue during the Attitude Era (1997-2002) was $456M in 2001. Peak revenue during Ruthless Agression Era (2002-2008) was $526.5M in 2008. And the peak during current PG era (2008-present) is $658M in 2015.

So, they are making more money now than during their ratings boom. It remains to be seen if Vince can keep WWE growing in the next decade as they move away from PPV model and into the network subscription model.

Resources:
WWE 2015 Financials
WWE Revenue History 1994-2010
Detail of WWE Class A & B shares
NJPW 2015 Financials
List of Professional Sports by Revenue
UFC 2015 Revenue
Second Screening During TV Time