A Cold Reality for WWE as a Business by Marc Madison

Much like any sport, wrestling’s ultimate intent is to entertain the fans. The goal of ‘sports entertainment’ is to provide wonderful storylines and ensure the paying customer goes home fairly happy. Happiness is relative of course, as we aren’t ensured that the fan favorites will always walk away victorious, as the struggle between good and bad has ups and downs and goes through storyline progression. In a nutshell, their goal is to put on a show. However, as has been seen and discussed lately, the crowds at many events, for example, Smackdown Live shows, appear small. This has been a surprising turn of events because, prior to the superstar shakeup, Smackdown Live was seen as the better program. It was written better, and those involved also had compelling storylines that toed the line between fantasy and reality. Attendance is never announced during these shows, but with the reduced crowds what money is being generated during these events? And if the events have smaller crowds, the volume of merchandise sold at the concession stands is also affected.

One argument is that the decline in attendance at some events is because the market is saturated with a number of options, leaving fans with alternatives to attending Smackdown Live. Over the next few months, we will see ratings for WWE, Raw, in particular, decline. Why is that? The primary reason is they are in direct competition with the NFL’s Monday Night Football. There could be a direct correlation between this anticipated decline and why The Shield (Roman Reigns, Seth Rollins and Dean Ambrose) have been reunited on Raw, as they were among the most popular factions in the company’s history. While a reincarnation isn’t usually as successful as the original, the nostalgia that the group brings has to be something the company is counting on to help them bring in audiences. Does it guarantee success? Not necessarily, but while the company has made recent cuts to the development of Network content, it doesn’t cost them any money to reassemble a faction that was hugely popular and generated some income.

Right now, they are stacked with a talent roster that, from top to bottom, should ensure segments are effective and money is generated. As fans, we often invest so much into the storylines and characters because we want to see the story develop in a way that is meaningful to us. However, while we are focused on that, there is a tendency to lose focus on the ultimate goal of the promotion, and that is to make money. This isn’t anything fans don’t already know, but it isn’t a primary focus when we watch the program. When it comes to movies, whether we know what the reviews are ahead of time or not, we often commit ourselves to paying whatever the cost is for a feature film in a theatre and decide afterwards whether we want to ask for our money back. When it comes to a WWE program, asking for your money back because you aren’t satisfied with the result is an exercise in futility. A fan that decides to run into the ring gets pummeled because that was the risk they took, and fans that purchase the monthly subscription to the WWE network run the risk of being pummelled with disappointment.

WWE strives to be good, like working with organizations like the Susan G. Komen foundation, which raises funds for breast cancer research and they started Connor’s Cure to raise money for sick children, but that doesn’t negate the fact that the increased exposure gained through philanthropic efforts can stimulate interest and revenue, and that money is reinvested into the product to help build the brand and is dispersed within the company.

The company has clearly been committed to bringing in quality performers, road agents, trainers, plus experienced office personnel that are there to help build something special. However, if these men and women aren’t helping make the company better by developing talent, one has to wonder if it hurts the company’s bottom line. One of the most prominent departments in the company is their creative staff, as that is where the storylines are scripted which the talent have to carry out, and in turn, fans decide whether to invest their time and money in them or not.

Look at the recent departure of Jimmy Jacobs, who left Ring of Honor to join WWE’s creative team about three years ago: was it a cost-cutting measure? It depends on who is telling the story, and who is listening. The common belief is that a picture Jacobs took with members of the Bullet Club led to his termination, representing a ‘last straw’. However, having Jacobs associate with members of the Bullet Club costing the company money? That is easy to scoff at, considering pictures were posted to social media by Kevin Owens of he and Adam Cole with their respective titles (Cole was the Ring of Honor world champion at the time). Not to mentions both Owens and SamiZayn have appeared on the Young Bucks’ ‘Being the Elite’ Youtube series in recent months. One theory would be that a connection is made informally between two promotions isn’t a necessarily a negative, and company could have thought at the time of Owens’ posting, how can this monetarily benefit us? As it turns out, less than a year after that photo was taken Cole is now with WWE as part of their NXT brand. It ultimately worked out for all parties.

The harsh reality here is that much like any business WWE’s purpose is to make money. Their philanthropic and charitable work benefits society at large, and aids public relations, but if they weren’t a global entity drawing in as much money as they do, they wouldn’t be doing as much outreach as they are. Meanwhile, this past year there have been cost-cutting measures in areas of production such as cutting out pyrotechnics, and the aforementioned cancellation of programs on the WWE Network that cost a lot to produce. The company’s bottom line is to ensure that they remain on the plus side at the end of each quarter of the year. They definitely aren’t treading water, and there is no suggestion that they are on the verge of having to sell assets, but a company that has made huge gains over the years won’t take any chance of taking steps backward.

It was scoffed at, but at the time of his departure from WWE,Ryback mentioned that in the promotion there existed tiered payment for talent. Main event stars like John Cena, Roman Reigns, Kevin Owens and AJ Styles would often receive greater pay than those lower on the card. From the company’s perspective, they will likely consider all variables like merchandise sales, fan engagement on social media and elsewhere, and overall appeal to help determine how they will pay their talent. This creates a problem for those tied to a specific ‘division,’ such as the Cruiserweights and even the women. In both instances, it appears that while greater opportunity and exposure have been offered in recent years that doesn’t necessarily result in greater earning for these particular groups. While we may have seen the cruiserweights and women featured in main events on Raw, does that mean they earn more for a given week depending on the rating for that segment? That seems unlikely, and regardless, there’s no assurance that WWE will commit to putting them in that spot over the long haul, unfortunately.

Another problem is that the pursuit of revenue can lead to a short-term focus, rather than a making a longer-term investment in anticipation of future profits, like committing time and effort into the promotion of another talent to see if a successful segment will result in a long-term return. Fans will recall that ReyMysterio’s merchandise did very well, and the bright colors and heroic nature of the character helped draw money in, and ultimately benefited the company. So perhaps Kalisto could generate a return through merchandise sales; maybe his own bright colours, his similarity to ReyMysterio, could be enough for fans to support him on a weekly basis and lead to his drawing money. The harsh nature of the business is that if talent aren’t generating money for WWE, what purpose do the ultimately serve? It’s clear that not every man or woman can be a focal point. However, when they receive a push that is when they hope that their screen time will result in leaving a greater impression on the fans, which ultimately means more money for them.

Recent stories have surfaced about Neville being upset over not being included in the Wrestlemania DVD, and that he voiced his displeasure about this because it meant he did not earn as much money as he could. As much as WWE wants to earn as much as possible and build the product, the talent wants to earn as much as possible without having to take unnecessary risks to retain their jobs. Where does this put everyone? From the company’s perspective, they can and should take some risks given how big a roster they have, and see if they can generate revenue in an area that they could have overlooked.

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