My own personal belief, aside from the PG thing is they have in the last year began giving a lot more air time to newer talent and younger stars. They are literally in a building for the future stage at the moment for the majority of the talent. It's my belief that's why they agreed to USA's requests about moving to 3 hours. They knew they would get lower ratings whilst showcasing new and younger talent however the 3rd hour makes up for any losses in revenue from a drop in ratings on a standard 2 hour show.
Although the ratings have gone down in the last 10 weeks, they still have 3-4 million people watching an extra hour of Raw they wouldn't usually be there for.
The following breaks down how they make more money now (or did do in 2009-2010) compared to the attitude era.
Between 1998 and 2001, WWF ran 835 shows. Between 2006 and 2009, WWE ran 1,269 shows which is a 52% increase.
I was surprised to see that 1995 had 347 events, especially knowing that wasn't a financially great year for them. They were small shows compared to the boom period or even this modern era.
The average attendance in 1995 was 3,352.
The average attendance in 2001 was 11,556.
The average attendance in 2005 was 4,975.
The average attendance in 2009 was 6,933.
An interesting fact is that the total attendance in 2009 for live events is approximately around what it was in 1999-2001 years (2.3 million people annually). However, since they're touring a lot more internationally (70+ events in the past three years), so it's clear that a much smaller portion of that live audience is domestic. (This is an improvement from mid-decade numbers. By 2005, the live attendance had dipped to about 1.61 million. 2005 was still an improvement from a decade prior to that by about half a million better than 1995's numbers.)
In terms of total pro-wrestling live attendance in North America, let's not forgot that during the 90's, there was WCW live attendance that was also drawing domestically. Today, we're down to one major company which is barely drawing on a worldwide basis the same number of people it had mostly domestically in 1999.
In total, they make about the same amount of money on live event & TV revenues - costs in 2009 as they did in 2001 (about $99k/event profit). However, that number was almost halfed in 2005 ($57k/event).
Observation Two: While PPV revenues are up on a per-buy basis, PPV costs have risen as well. International buys continue to rise.
2009: $80.0 million PPV revenue with $32.5 million in PPV costs. Total PPV buys (domestic+int'l) = 4,490,200 buys.
2005: $85.5 million PPV revenue with $36.3 million in PPV costs. Total PPV buys (domestic+int'l) = 5,280,800 buys.
2001: $128.2 million PPV revenue with $41.6 million in PPV costs. Total PPV buys (domestic+int'l) = 8,010,400 buys.
Revenue per PPV buy
This would suggest that the price increases on the PPVs have offset the fact that a larger percentage of buys is coming from international sources. Remember that the average PPV in 2001 was only $29.95 (WM was $39.95). The average PPV in 2005 was $34.95 (WM was $49.95) and the average PPV in 2009 is $39.95 (WM was $54.95 plus more for HD). A little less than 50% of the average PPV price was received per buy in 2005 & 2009, and a little more than half was received per buy in 2001.
Cost per PPV buy
Revenues - Cost per PPV buy:
2009: $10.58/buy x 4.49 million buys = $47.5 million
2005: $9.31/buy x 5.28 million buys = $49.2 million
2001: $10.81/buy x 8.01 million buys = $86.6 mililon
So, WWE is keeping their head above water on the PPV front on a per-PPV basis - but they've had to increase PPV prices by 33% since 2001 to do that. They're not even close to making as much money over-all on the PPV front as they were in the boom period, once you factor in increased costs.
Observation Three: Overall, the increase in TV rights fees and the loss of advertising money resulted in a slight gain.
2009: $72.8 domestic TV rights fees + $39.1 int'l TV rights fee + $7.7 advertising = $119.6 million net revenue (with $68.3 in cost)
2005: $52.3 domestic TV rights fees + $24.8 int'l TV rights fee + $43.7 advertising = $120.8 million net revenue (with $68.5 in cost)
2001: $20.9 domestic TV rights fees + $14.3 int'l TV rights fee + $90.3 advertising = $125.5 million net revenue (with $78.3 in cost)
2009: $51.3 million in profit
2005: $52.3 million in profit
2001: $47.2 million in profit
It's been an interesting trade-off. Obviously, they seem to be underpaid in TV rights fees at the turn of the century, but they were able to make a lot of money selling ads. Now, they get a lot more for the TV rights (especially in the int'l market) but they barely do more ads. Considering the lower ratings (though the same number of viewers, as was discussed in the newsletter this week), I think they're probably better off not trying to sell ads.
To recap points 1 through 3:
(a) Overall, Live Event Attendance is about the same. Even profit per event is about the same. But by running more events, 2009 has about $13MM more in profit in compared to 2001.
(b) PPV profits are $40MM lower in 2009 than the peak period (2001).
(c) They're been a shift in the allocation of profit from TV Rights + Advertising money, but overall things are about the same (+$4MM in 2009 vs 2001).
Live Events & Televised Profit: down about $22MM in 2009 compared in 2001
2009: $308 - $175 = +$133MM
2005: $285 - $165 = +$120MM
2001: $336 - $181 = +$155MM
1997: $63.9 - $54.6 = +$9.3MM
Observation Four: Profit from Licensing Fees, Merchandise and Home video are up!
Licensing Fees: $44.7 - $11.0 = +$33.7MM (2009)
Licensing Fees: $20.9 - $6.4 = +$14.5MM (2005)
Licensing Fees: $35.6 - $13.8 = +$21.8MM (2001)
I believe this money is coming from better deals with the licensees - toys, video games, etc.
Merchandise: $35.8 - $22.7 = +$13.1MM (2009)
Merchandise: $17.3 - $12.1 = +$5.2MM (2005)
Merchandise: $28.9 - $23.9 = +$5.0MM (2001)
I'm putting WWEShop and Venue Merchandise into one bucket so I can compare the different years.
Home Video: $39.4 - $17.7 = $21.7MM (2009)
Home Video: $20.1 - $9.2 = $10.9MM (2005)
Home Video: $12.2 - $6.2 = $6.0MM (2001)
Licensing/Merchandise/Home Video combined: $33.7 + $13.1 + $21.7 = $68.5MM (2009)
Licensing/Merchandise/Home Video combined: $14.5 + $5.2 + $10.9 = $30.6MM (2005)
Licensing/Merchandise/Home Video combined: $21.8 + $5.0 + $6.0 = $32.8MM (2001)
The increase in these three categories from 2009 compared to 2001 (+$35.7MM) completely offsets the decrease in the Live & Televised Profit (-$22MM).
Observation Five: WWE makes more on publishing and WWE.com than they did previously.
It's not a big surprise that WWE understands how to effectively make money using the internet better today than they did a decade ago.
WWE.Com/Internet Advertising: $16.8 - $6.9 = $9.9MM (2009)
WWE.Com/Internet Advertising: $7.8 - $3.5 = $4.3MM (2005)
WWE.Com/Internet Advertising: $5.6 - $4.9 = $0.7MM (2001)
Publishing: $13.5 - $11.1 (2009) = +$2.4MM
Publishing: $12.2 - $8.4 (2005) = +$3.8MM
Publishing: $17 - $23.9 (2001) = -$6.9MM (I believe it was things like WWE magazine and WWE Music were not making money)
2009 vs 2001: +$18.6MM higher profits on these two categories.
To recap points 4 and 5:
(a) WWE made almost $36MM more in licensing/merchandise/home video in 2009 than they did in 2001.
(b) WWE made almost $19MM more through WWE.com/Publishing in 2090 than they did in 2001.
(c) The additional $54MM in Branded Merchandise profit offsets the -$22MM less from the Live & Televised Event category.
Revenues - Cost: 458 - 244 = $214 (2009)
Revenues - Cost: 363 - 203 = $160 (2005)
Revenues - Cost: 435 - 240 = $195 (2001)
Revenues - Cost: 81.8 - 68.9 = $13 (1997)
In short, how did WWE make more money in 2009 than they did in 2001? They ran more events at about the same profit/event as they did a decade earlier, they made a lot more money on their licensing fees and expanded their ability to use WWEShop to move merchandise, they became much more profitable at producing home video units, they figured out how to make more money using their website and they shuttered some of the unprofitable elements of their publishing business.
Now, this isn't taking into account inflation or other factors such as The World, WWE Films, XFL costs, IPO costs, etc, but it gives a good grounding on how things have changed over the past ten years.
Dude if ya gonna post someone else' research work on a forum, do give that person the credit for it.