AEW/ROH Finances, Ratings, etc.

[SirSmUgly]

I knew it was Roland-Garros, but still wrote U.S. Open like a doofus.

And to paraphrase the Hulkster, Monica Seles rules, Steffi Graf drools!

(I agree with you about the level of advertiser making a massive difference, but I still think 100M/yr+ for AEW is a realistic and even likely possibility considering WBD's attempts to keep subscriber fees up.)

[ka-to]

On 8/13/2024 at 6:30 PM, odessasteps said:

I used to say that about writing on the internet vs being published. 

I used to get comped on a press pass by showing published photos/articles. A few years past that I was too honest to try. I also decided that I would rather have a reserved seat and be able to drink some beers at the show.

[just drew]

Last night's rating kind of encapsulates the issue. They were at 700k, but they were the #1 rated show on cable. How do you value that?

[Stefanie Sparkleface]

3 hours ago, SirSmUgly said:

I knew it was Roland-Garros, but still wrote U.S. Open like a doofus.

And to paraphrase the Hulkster, Monica Seles rules, Steffi Graf drools!

(I agree with you about the level of advertiser making a massive difference, but I still think 100M/yr+ for AEW is a realistic and even likely possibility considering WBD's attempts to keep subscriber fees up.)

Okay, so let's do some math. If AEW gets $100 million for rights fees for their entire package, then WBD would aim to make roughly a 1.5:1 ratio to be profitable. That'd be fair, right? Smackdown, on Fox, per this Adage article (https://web.archive.org/web/20231101080442/https://adage.com/article/media/tv-commercial-prices-advertising-costs-fall-2023/2520931, using Wayback Machine so you can read it because otherwise it's paywalled), charges $51,077 on average for each 30 second spot. That translates to a $22.61 CPM, or $22.61 per thousand viewers (as they average 2,258,750 viewers). I'll be nice and assume that WBD will charge the same rate for all AEW shows (although, for full disclosure, CPM averages on cable are more like $16 per thousand viewers).

The averages across 2023 Q4 to 2024 Q3, (per Wrestlenomics) for Dynamite are 762,000, for Rampage are 320,500, and for Collision are 416,250. Dynamite and Collision would each get 72 spots of 30 seconds in length, Rampage 36 (assuming 42 minutes of on screen in an hour, 18 minutes of ads, so 36 ads per hour). That means each spot on Dynamite would be $17,228.82, on Rampage would be $7,246.51, and on Collision would be $9,411.41. If they sell all their spots, Each Dynamite brings in $1,240,475.04, each Rampage $260,874.18, and each Collision $677,621.70. At 52 weeks a year, assuming no pre-emptions, that's $2,178,970.92 per week...

... or $113,306,487.84. WBD spends $100 million to make $13 million. Mind you, and that's at Smackdown's CPM, which AEW is likely not clearing. That's also assuming all ads are sold, and that ad buyers aren't going to drop out.

That's a tough sell. And Smackdown's ad rate is why Fox walked away from them, because as you can see from that list, it's one of the lower ad rates around for the money Fox was paying WWE.

I wasn't saying $100 million would be a pleasant surprise to be a jerk. I was saying it because cable rates are struggling and, as I've said again and again, it's going to get worse.

Edited August 15 by Stefanie Sparkleface

[zendragon]

Having watched Lucha Underground on first on Netflix then again on Tubi, I feel that wrestling is a good fit for streaming with the episodic nature. Plus if you wanted you could rent a warehouse or a soundstage and run Rampage as a studio show 

[Stefanie Sparkleface]

20 minutes ago, just drew said:

Last night's rating kind of encapsulates the issue. They were at 700k, but they were the #1 rated show on cable. How do you value that?

Long story short, it's complicated. You'll find that in terms of actual bulk viewership, the true top spots on cable are news shows, but the primary market for those shows are people 55+ (in other words, in advertising lingo, people who either need to be planning for retirement and don't have any expendable income, or are already in retirement and are on fixed incomes). That's why whoever leads in 18-49 is considered the top show on cable, because that's the ideal market; they'll have expendable income and/or kids they're willing to spend money on. From there, they'll research the audience for that show and see if it's worth spending the money to advertise on them.

Most ad buyers don't have a high opinion of wrestling, and if they're going to spend money on it, it'll probably be with WWE due to the higher visibility. That low opinion is why WWE's primary ads are for things like Slim Jims and prepaid wireless companies, because that's the kind of markets that ad buyers think wrestling fans will/can afford to support.

[SirSmUgly]

8 hours ago, Stefanie Sparkleface said:

Okay, so let's do some math. If AEW gets $100 million for rights fees for their entire package, then WBD would aim to make roughly a 1.5:1 ratio to be profitable. That'd be fair, right? Smackdown, on Fox, per this Adage article (https://web.archive.org/web/20231101080442/https://adage.com/article/media/tv-commercial-prices-advertising-costs-fall-2023/2520931, using Wayback Machine so you can read it because otherwise it's paywalled), charges $51,077 on average for each 30 second spot. That translates to a $22.61 CPM, or $22.61 per thousand viewers (as they average 2,258,750 viewers). I'll be nice and assume that WBD will charge the same rate for all AEW shows (although, for full disclosure, CPM averages on cable are more like $16 per thousand viewers).

The averages across 2023 Q4 to 2024 Q3, (per Wrestlenomics) for Dynamite are 762,000, for Rampage are 320,500, and for Collision are 416,250. Dynamite and Collision would each get 72 spots of 30 seconds in length, Rampage 36 (assuming 42 minutes of on screen in an hour, 18 minutes of ads, so 36 ads per hour). That means each spot on Dynamite would be $17,228.82, on Rampage would be $7,246.51, and on Collision would be $9,411.41. If they sell all their spots, Each Dynamite brings in $1,240,475.04, each Rampage $260,874.18, and each Collision $677,621.70. At 52 weeks a year, assuming no pre-emptions, that's $2,178,970.92 per week...

... or $113,306,487.84. WBD spends $100 million to make $13 million. Mind you, and that's at Smackdown's CPM, which AEW is likely not clearing. That's also assuming all ads are sold, and that ad buyers aren't going to drop out.

That's a tough sell. And Smackdown's ad rate is why Fox walked away from them, because as you can see from that list, it's one of the lower ad rates around for the money Fox was paying WWE.

I wasn't saying $100 million would be a pleasant surprise to be a jerk. I was saying it because cable rates are struggling and, as I've said again and again, it's going to get worse.

Aw, man, math? OK, I give up on this one.

But you know, I think Comcast would be hard-pressed to show the straightforward math on buying NBA rights to put a bunch of games; I doubt that it will drive Peacock subs or new Comcast cable/internet subs to make up for the cost of the contract, but I also think it gives Comcast leverage with WBD in negotiations over subscriber fees and makes future competition for NBA rights even more untenable for competitors who only own cable channels and who aren't, like Amazon or Comcast, able to leverage endless cash to pay for sports league rights that won't be worth the money laid out for them. 

There are concerns immediately beyond "how much advertising can we sell to offset what we paid for these rights" that these rights buyers are trying to figure out. 

And I think WBD might calculate things in a not-too-different way. I don't think that they're going to look at spending 100M to make 13M as the only part of their calculus...maybe not even the major part of their calculus. They're not in the position that FOX was with WWE, in that WBD has a tangle with Comcast coming up over the subscriber value of their channel and FOX is free over an antenna. 

But feel free to tag me when AEW makes 75M/yr or less when re-upping with WBD because I obviously could be (will be?) wrong.

Edited August 16 by SirSmUgly

[Stefanie Sparkleface]

4 hours ago, SirSmUgly said:

Aw, man, math? OK, I give up on this one.

But you know, I think Comcast would be hard-pressed to show the straightforward math on buying NBA rights to put a bunch of games; I doubt that it will drive Peacock subs or new Comcast cable/internet subs to make up for the cost of the contract, but I also think it gives Comcast leverage with WBD in negotiations over subscriber fees and makes future competition for NBA rights even more untenable for competitors who only own cable channels and who aren't, like Amazon or Comcast, able to leverage endless cash to pay for sports league rights that won't be worth the money laid out for them. 

There are concerns immediately beyond "how much advertising can we sell to offset what we paid for these rights" that these rights buyers are trying to figure out. 

And I think WBD might calculate things in a not-too-different way. I don't think that they're going to look at spending 100M to make 13M as the only part of their calculus...maybe not even the major part of their calculus. They're not in the position that FOX was with WWE, in that WBD has a tangle with Comcast coming up over the subscriber value of their channel and FOX is free over an antenna. 

But feel free to tag me when AEW makes 75M/yr or less when re-upping with WBD because I obviously could be (will be?) wrong.

The way it gets to $100 million is if Max is included in the package, because streaming CPMs are averaging $40-50 and getting higher. There’s the calculus. The concern I have about that is that WBD has had ample opportunity to put AEW on Max but hasn’t taken it.

EDIT TO ADD: Ad? Lol. The reason sports rights are high buys is because they are guaranteed live watches, and even if you have an ad-free account, you still have to watch them during live programming. That’s very appetizing for ad buyers, and it’s why sports have the highest CPM rates out there. People don’t skip ads via DVR or miss them on replay because they don’t watch via those methods, they watch sports live. That’s why Peacock shells out $80 million for one NFL playoff game; they make that money back in ads easy. Check out that link to that Adage article, because it shows Sunday Night Football ads are in the $800K range for a 30 second spot.

Now why doesn’t wrestling get that same benefit? Because advertisers, by and large, think wrestling fans are broke rubes. There’s also the thought of how many fans watch via DVR. Remember how often I would point out that I wished live+3 and live+7 numbers got reported? Those are figures that would be reallllly good right now, because that can help you figure out streaming CPMs on unskippable ads as opposed to fast forwarding over them on DVR. I have a thought those numbers may not be very good, hence WBD’s hesitance to put AEW on Max, but I have no proof of that.

Edited August 16 by Stefanie Sparkleface

[NoFistsJustFlips]

As if we needed a new wrinkle in this conversation, WBD just installed a new executive to oversee all of the cable networks. If she comes in Jamie Kellner style all the months of negotiating could be tossed out the window.

[odessasteps]

4 hours ago, NoFistsJustFlips said:

As if we needed a new wrinkle in this conversation, WBD just installed a new executive to oversee all of the cable networks. If she comes in Jamie Kellner style all the months of negotiating could be tossed out the window.

As long as she wasn’t in a sorority for someone that works for Endeavor. 

[Technico Support]

Things this thread reminded me about:

My grandmother also rented a phone, from Bell Atlantic, in the 70s and 80s.

Fubo dropping Turner networks with zero notice and me frantically re-subbing to to Sling at 8:01pm on a Wednesday in 2020.

[Stefanie Sparkleface]

16 minutes ago, Technico Support said:

Things this thread reminded me about:

My grandmother also rented a phone, from Bell Atlantic, in the 70s and 80s.

Fubo dropping Turner networks with zero notice and me frantically re-subbing to to Sling at 8:01pm on a Wednesday in 2020.

You can just say I haunt your dreams, y'know.

[Kevin Wilson]

I enjoy math (that's a lie, I hate math), I think the mathing may provide a good baseline but there are just other things they consider so I can't go with the 100 million a year = 13 million a year profit but its still interesting to read. The BIG question to me that we haven't dove into (because how could we without knowing) is what premium would AEW charge if as part of the deal, all PPVs and backlog are on Max? TK of course knows what they profit on PPVs and can show WBD, I don't know if WBD would be willing to pay enough to cover PPVs. BUT how would that calculate? In 2023 they had an estimated 1.08 million buys over 8 PPVs. I couldn't guess what AEW profited as I don't know how many were national vs. international since the price is different but lets say they averaged $35 per PPV that is 37.8 million. Round up a lil bit, take 50% for what AEW gets just to estimate, that's 20 million a year.

I do all that made up math as lets say they announce the deal and its $125 million a year, but includes PPVs on Max and the backlog. Would that be... worse then getting $100 mil and controlling their own PPVs? What if ROH goes on the new sports channel and its $130 mil a year? I know I'm making up numbers and Stef is going to pop in and yell at me for it, I'm just saying there are so many variables and with so little leaking about the talks all we can do is speculate until we know what all the deal will include (which is fun, not saying we shouldn't).

TK did an interview today(?) wearing a WBD hat so either something is coming really soon or he is trolling the fuck out of everyone.

[username]

I do think the ppvs on Max deal is interesting as... do they remain ppvs like UFC on ESPN+ or are they like WWE ppvs on Peacock? The latter would cost WBD a bunch more I'd wager but I don't know if they even have a pre-existing set-up for the former.

[Stefanie Sparkleface]

9 hours ago, Kevin Wilson said:

I know I'm making up numbers and Stef is going to pop in and yell at me for it, I'm just saying there are so many variables and with so little leaking about the talks all we can do is speculate until we know what all the deal will include (which is fun, not saying we shouldn't).

Oh, I wouldn't yell! I'll just point out numbers since I work in data analytics and I live in spreadsheets.

First, your PPV numbers aren't that far off. The Wrestlenomics link I posted earlier had the PPV figures as $15.1 million domestically (from 670K buys) and $4.3 million internationally (from 361K buys). In other words, $19.4 million.

Second, remember how I mentioned in my post that the figures I listed were for Smackdown's CPM, and would require AEW to sell all of their ads? And Smackdown's CPM was $22.61 and that AEW's numbers probably aren't going to reach that? Well, let's run AEW's more realistic numbers. Again, remember, cable's average CPM for prime time shows is $16. (By the way, if you see CPMs for cable in the $40-50 range, that's local resale value; cable systems will buy national ads and resell them to locals at their local CPM rate, so if 3,000 people are watching a show in your metro area, that ad is $150 locally. Ever wonder how your local indie advertises their next show on Raw or Dynamite? That's how. This is also one of the reasons why smaller cable companies are getting out of the business, because it's no longer worth it to do this resale.)

Dynamite, having a top demo show, is more realistically around a $20 CPM. That's not too bad, that means per-ad they're at $15,240 per ad, meaning if all ads sell, that's $1,097,280 per show. Not too bad of a hit.

Then, well... Rampage and Collision.

Rampage is off prime time in a dead zone at Friday at 10pm. CPMs in that range are always below cable average, but AEW still gets decent numbers for a dead zone, so their CPM there is probably more like a $12 than other shows that would be a $6 or an $8 nationally (or in some case just turn the slot over to local buys). Problem is, the figures I presented in my earlier posts gave Rampage Smackdown's CPM. That's not good. With Smackdown's CPM, Rampage got $7,246.51 per ad. With their more realistic CPM, it's $3,846 per ad, so if they sell them all, it's $138,456 per show.

Collision is in the same boat. Not a lot of TV traffic, and in a bad spot against similar shows like sports, WWE PLEs, and UFC PPVs. Again, they perform well in the spot - not cable prime time well, but well all things considered - and they'd probably get just below the prime time average. Let's call it $14. That drops you from $9,411.41 per ad under Smackdown's CPM to a more realistic $5,827.50. Sell all your ads and that's $419,580 per show.

Add it all up, and with all ads sold each week, it's $1,655,316 per week. No preemptions and selling all ads all year takes you to a grand total of $86,076,432.

That's not $100 million, you'll note. It's a decent ROI for $67.5 million. It's a bath at $100 million.

Partnering with Max would help, but it would also turn PPVs into more like PLEs where ad breaks would be required due to Max's ad-based tier to satisfy those buys. Streaming your weeklies on Max would help too, because as I mentioned earlier, streaming CPMs are higher than cable CPMs and that balance will only continue to shift towards streaming. Not only that, but Max has 74 million global subscribers. Someone's leaving money on the table here. Question is, is it WBD thinking AEW is not viable on Max or AEW not wanting to be on Max?

[JLowe]

it’s a minor point, but WBD has been using AEW commercial time to promote their own shows, and AEW talent is “hosting” their Saturday night programming after Collision. Plus Saraya on Dinner and a Movie, Jericho on Impractical Jokers. Clearly, WBD sees value in AEW as a feature of their overall brand.

[Matt D]

The plot thickens 

 

[Stefanie Sparkleface]

Innnnnteresting. That makes me think Max is in play, because that's the only way that ad valuation makes sense.

[Matt D]

Apparently Dave goofed and took something someone had posted on a discord as genuine. False alarm.

[Kevin Wilson]

False alarm or damage control due to an angry source, HMMMMMM?

This is why TK and WBD need to stop being assholes and finish the deal, take everyone out of their misery.

[Stefanie Sparkleface]

8 hours ago, Matt D said:

Apparently Dave goofed and took something someone had posted on a discord as genuine. False alarm.

Well that's not high-class journalism.

7 hours ago, Kevin Wilson said:

False alarm or damage control due to an angry source, HMMMMMM?

This is why TK and WBD need to stop being assholes and finish the deal, take everyone out of their misery.

I'm not miserable! I could do math for weeks! Months, even!

[Matt D]

24 minutes ago, Stefanie Sparkleface said:

Well that's not high-class journalism.

Obviously you need to start your own dirt sheet. 

[Stefanie Sparkleface]

Just now, Matt D said:

Obviously you need to start your own dirt sheet. 

Hopefully people want Ice Ribbon and Pure-J scoops wild conjecture and fan theory.

[AxB]

Dave Meltzer is very much a guy who is caught up in the Internet Era of journalism. Like he used to at least try to follow the journalistic ethics of seeking confirmation, and not stating something as fact until it was confirmed. But nowadays in the high speed information age, people just report shit instantly (or make it up), and Meltzer decides he can't be competitive as a slow news source, and does the Publish Instantly thing too.

Now obviously a lot of people who do make shit up then claim that he said it, even when they know it's their own fabrication, so that does add to the whole Dave is Full of Shit thing.

[zendragon]

6 hours ago, Stefanie Sparkleface said:

Well that's not high-class journalism.

I'm not miserable! I could do math for weeks! Months, even!

ok Scott Steiner