Comparing WWE Finances from the "Attitude Era" to the "PG Era". - Wrestling Forum : WWE, TNA, Debate League, Wrestling Videos, Women of Wrestling Forums
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Old 09-04-2012, 08:17 PM   #1 (permalink)
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Default Comparing WWE Finances from the "Attitude Era" to the "PG Era".

WWE makes more money now than they did during it's boom period. How so?

Credit goes to Chris Harrington. Link -
http://mookieghana.livejournal.com/316157.html

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
2009: $17.82/buy
2005: $16.19/buy
2001: $16.00/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
2009: $7.24/buy
2005: $6.87/buy
2001: $5.19/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

Branded Merchandise

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.

Last edited by Clique : 09-04-2012 at 08:52 PM. Reason: added link to story
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Old 09-04-2012, 08:37 PM   #2 (permalink)
Vince gives me a comedy gimmick
 
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Default Re: Comparing WWE Finances from the "Attitude Era" to the "PG Era".

Nice but where did you get all your numbers?
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Old 09-04-2012, 08:43 PM   #3 (permalink)
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Default Re: Comparing WWE Finances from the "Attitude Era" to the "PG Era".

They are all taken direct from WWE annual reports.
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Old 09-04-2012, 08:48 PM   #4 (permalink)
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Default Re: Comparing WWE Finances from the "Attitude Era" to the "PG Era".

Quote:
Originally Posted by holt_hogan View Post
They are all taken direct from WWE annual reports.
I think he means do you have a link to this story? I'd also like to see it posted in the opening post too, thanks.

It looks credible but we need a name of the site and/or link to where you got it from.
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Old 09-04-2012, 08:49 PM   #5 (permalink)
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Default Re: Comparing WWE Finances from the "Attitude Era" to the "PG Era".

Here you go:

http://mookieghana.livejournal.com/316157.html
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Old 09-04-2012, 08:55 PM   #6 (permalink)
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Default Re: Comparing WWE Finances from the "Attitude Era" to the "PG Era".

^


It's always interesting looking at how "the machine" runs in these reports.
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Old 09-04-2012, 08:58 PM   #7 (permalink)
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Default Re: Comparing WWE Finances from the "Attitude Era" to the "PG Era".

Yeah should have posted that in the OP
The guy is legit, he posts on the f4wonline/observer BOARD
Motherfucker is a numbers genius with all sorts of WWE stuff
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Old 09-04-2012, 08:59 PM   #8 (permalink)
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Default Re: Comparing WWE Finances from the "Attitude Era" to the "PG Era".

Very interesting report, thanks to you and Chris for compiling the data.

On the whole, all I see is that in 2001, it was a wrestling company, and in 2009, we see the magical transformation into 'entertainment' company. Look where they made most of their money. Licensing, merchandise, internet, internet advertising and publishing. Basically, making money on a whole slew of things that have nothing to do with the actual wrestling part of the company and everything to do with masking the fact that they in fact do employ pro wrestlers, like its some sort of secret shame.

Gotta hand it to Vince, though-he's found a way to offset the horrendous decline in PPV income and attendance. The sad part is that in his warped mind he'll take the fact that he's making all this money as a sign that he's doing things right and will continue to put out the same junk we've seen for years on end.
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Old 09-04-2012, 08:59 PM   #9 (permalink)
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Default Re: Comparing WWE Finances from the "Attitude Era" to the "PG Era".

What stood out for me was the advertising revenue. In 2001 they were making nearly $2 million a week from TV advertising compared to only 150k in 2009. That's phenomenal.
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Old 09-04-2012, 09:02 PM   #10 (permalink)
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Default Re: Comparing WWE Finances from the "Attitude Era" to the "PG Era".

bro the wwf lost 68 million dollars on the xfl in 2001 and you brushed it off in one sentence. they made 85 million in wrestling profit that year which nothing else even comes close to
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