WWE Q3 Financials Evidence of Too Many PPVs
Written by Lex on November 6th, 2008 in ECW, News, Opinion, PPV, Raw, Smackdown, WWE, Wrestling Industry.
WWE released their third quarter results today, and it wasn’t rosy news for stockholders. Consider the numbers:
- Revenues fell: $108.8 million in Q3 2008, compared to $108.1 million in Q3 2007
- Operating income fell: $7.9 million in Q3 2008, compared to $13.4 million in Q3 2007
- Net income fell: $5.3 million in Q3 2008, compared to $8.5 million in Q3 2007
You might say, “Lex, revenues only fell $0.07 million, no biggie!” Let’s dig a little deeper, because the real rub here is found when you examine the PPV revenues.
Revenue from live and televised events grossed $68.7 million in Q3 ‘08, compared to $68.6 million in Q3 2007. Keep in mind, pay-per-view revenues are a part of that live and televised revenue. Pay-per-view revenue accounted for $16.4 million of that $68.7 million in Q3 ‘08, compared with $18.8 million of the $68.6 million in Q3 ‘07.
So what does all this mean? One obvious point is that PPV revenues were down $2.4 million this quarter, a huge drop. This was a direct result of fewer buys. The Great American Bash (196,000 this year, 229,000 last year), Summerslam (477,000 this year, 537,000 last year) and Unforgiven (211,000 this year, 210,000 last year) all underperformed.
Here’s another point: If you look at the revenue numbers for the first three quarters of 2008, WWE appears to be making just as much money off Raw, Smackdown and ECW television rights fees and advertising as they are on PPVs. And keep in mind, those nine months include the WWE’s biggest PPV, Wrestlemania.
I think these numbers provide a pretty compelling argument for WWE to reduce the number of PPVs they put on each year. People just can’t afford to buy that many PPVs, especially with the economy going sour. If they’re doing that well on house shows and non-PPV televised events, why not cut out several PPVs and put some supercards on free TV. After all, they could charge more for the advertising and score some really good ratings if people knew there was a huge show with big title matches on free TV.
As I said the other day on the Raw post, they need to give some of their shows that Clash of the Champions feel. Fans will appreciate good wrestling on free TV, and in turn, become more interested in the product and more likely to purchase PPVs since there wouldn’t be one to two PPVs EVERY month.
Sorry to get so heavy into numbers, but I’d love to hear everyone’s thoughts on this issue. What’s better for the WWE: keeping the same number of PPVs they have now, or cutting down and adding some supercards on free TV?
November 6th, 2008 at 9:05 pm
Oh good post! I completely agree with the analysis - less PPVs and more buildup to them is the way to go!
November 6th, 2008 at 9:17 pm
Thanks, Arjun. I got a little involved in dissecting the numbers, but I’m into stock picking so it’s fun for me.
November 6th, 2008 at 9:20 pm
Wasn’t last year’s Cena vs Lashley at GAB? Big match
Last year’s Summerslam had the returns of Rey and HHH
This year should have done better because of Taker/Edge and Batista/Cena(which had a POOR build)
November 6th, 2008 at 9:24 pm
They should remove:
-Backlash
-Great American Bash
-Judgment Day
Add:
-War Games
November 7th, 2008 at 3:29 am
i think we also have ot remember that we are in a global recession: PPV tickets/ purchases won’t guarantee so many sales if the combination of no money and average booking occurs. I totally agree that the tri-brand ppv hasn’t worked: i didn’t think it would when they first announced it as it never allowed for longer than 4 weeks for a feud to rise and then if it did go on longer we would see the same matches on the next PPV.
Perhaps also the rise in streaming has had a major bearing on this figure: same amount of viewers, just in illegal formats
November 7th, 2008 at 11:08 am
Nice bit of number crunching there Lexus. I too have a penchant for numbers. I believe a few 3d charts from excel would have been nice (must try harder to impress The Gooser next time).
Anyways, yes they have too many PPV’s. I think that, unfortunately, the number of PPV’s is based solely on money and they would run one every week if they would make more money from it. So hopefully they will drop the number of PPV’s down to a reasonable amount now.
I don’t know how many people here remember the mid 80’s to mid 90’s. Story lines would go on for literally all year to build up to a match on PPV. If you look back now the PPV’s might not be “entertaining” to new fans, but the build up alone is what sold them. If a new fan ever wonders what was so good about Hogan vs Andre at Mania 3, or The Ultimate Warrior vs Hogan at Mania 6, it was because it was special. You wouldn’t see something like that every month like you do now.
I don’t know if as fans we have the attention to build up to a match or a show for that long any more, but I hope the fed goes back to the slow build approach soon.
And I think downloads may have something to do with the drop, but not in the last year. The Gooser is the king of all downloaded media, and he hasn’t seen a dramatic change in technology or availability in this past year. I think that the WWE can’t complain about people downloading their product for free when they charge so much for it and give so little back. If you count up how much it costs to be a WWE fan (PPV’s, live shows, merchandise they shamelessly throw down our necks) they get a hell of a lot of money from predominantly working class people and give little in return.
These figures just show that WWE needs to update itself and regenerate it’s self like has done in the past or fall by the wayside like so many other wrestling companies.
THE GOOSER
November 7th, 2008 at 3:37 pm
Lex,
Agreed and I would only hold 7 ppvs a year and one free supershow. That will make more people buy shows as they will have a proper build up and overall it would be more memorable. Right now its overkill with ppvs and they need to make wwe one again by only having one world title.
The Gooser.
True downloading is destroying the entertainment industry. But I rather buy music/dvds because of the quality/guarantee you get.
November 9th, 2008 at 11:49 am
[...] the WWE released three wrestlers this week: Super Crazy, Paul London and Chuck Palumbo. With the company’s stock at a 52-week low and PPV revenues falling, I think it might be feasible to think that there could be more releases in the coming days. [...]
December 28th, 2008 at 11:57 am
[...] worse, WWE PPVs like Great American Bash and Unforgiven only garnered around 200,000 buys. Pretty low for the WWE, [...]