Barrons: UFC ‘kicking the butts’ of WWE
Popular Vote Turns Against World Wrestling While former chief Linda McMahon fights for a Senate seat, World Wrestling is struggling…
Popular Vote Turns Against World Wrestling
While former chief Linda McMahon fights for a Senate seat, World Wrestling is struggling to remain relevant as mixed martial arts surges.
Upon inspection, World Wrestling Entertainment’s stats don’t look so buff. Pay-per-view buys, TV ratings, magazine sales and Website visits have been in decline for three years, as many fans turn to mixed martial- arts contests like the Ultimate Fighting Championship. The UFC’s champions like Brock Lesnar are essentially kicking the butts of WWE superstars like John Cena.
“Lousy,” was the word used to describe June’s quarterly results in conference-call remarks by Vince McMahon. He stepped in as CEO in September 2009 when wife Linda retired from the job. June revenues fell 23% from the prior-year period, to $107 million, while earnings fell by more than half, to $6.3 million, or 8 cents a share. After capital spending, free cash flow was a negative $17 million. Vince McMahon blamed travel interruptions caused by the Icelandic volcano and absent stars—some of whom retired and some who, like the Undertaker, have been sidelined by injuries.
High-margin pay-per-view buys for WWE bouts have fallen, while they’ve risen for the rival UFC. WWE’s TV ratings keep dropping, too.
But other crucial stats are tumbling. The number of viewers making “buys” of WWE pay-per-view broadcasts has been falling for three years. Over the same period, as the chart on this page shows, pay-per-view buys have trended up for the mixed martial-arts events of UFC. Pay-per-view is a high-margin business that contributes almost a fifth of WWE revenues but a bigger share of profits. Barrios blames the weak pay-per-view showings on a weak economy, in which the $49.95 price of an event looms larger on cable bills.
Television shows like RAW and SmackDown bring in almost a quarter of WWE revenue. Even though RAW remains one of the top-rated shows on TV, its ratings combined with those of WWE’s other shows are down about 25% in three year.
WWE’s Monday-night show RAW is the longest-running prime-time series. That’s not necessarily reassuring. Nor is it comforting to hear Chief Financial Officer George Barrios say that UFC reminds him of where WWE was 15 years ago. Facing off against younger challengers like UFC, the wrestlers of WWE look old.