The Great WWE Stock Crash of 2014

[Antacular]

You know these are dark times when Phantom Lord is a voice of reason.

I don't know if this has been touched on but I have heard a lot of people through my social media talking about how WWE would make a lot more money off of monthly $60 PPVs compared to $10 monthly subscriptions and that really is not the case. PPV takes something like 50% of the revenue of PPVs whereas WWE gets an 80-90% return for their Network depending on which Streaming Device they have to pay dividends to. You figure that they have 650K+ on the Network, they had a lot more people purchase Wrestlemania than they expected with the inclusion of the Network, and more people are watching the PPVs, they are not that far off from what a lot of people I've read have been assuming.

I think this stock crash is temporary (I bought 3 stocks at around $11) but I expect them to go up soon. People act like Vince McMahon doesn't know what he is doing but at the same time he has been essentially the only game in town for over a decade and has done things nobody ever expected of professional wrestling.

1) The subscriber numbers aren't "assumptions," management explicitly stated first they needed 800K-1M to turn a profit, then it came out they only signed up around 667K, and now management just said they need 1.3-1.5M for the network to be profitable. The assumptions aren't what numbers they need to hit for this to succeed, the assumptions are whether those numbers WILL be hit. I'm sure this will only earn me more fans here, but I see there being VERY little chance of them hitting 1.5M subscribers EVER, barring a complete move of RAW onto it.

2) Vince is a good wrestling promoter, he's not a good BUSINESS MAN. WBF? XFL? WWE Films? Erroding WWE profitability over past decade despite a virtual monopoly? These are not the marks of a competent capitalist. The guy knows how to build compelling storylines and book good matches. THAT'S IT.

3) If you bought the shares at $11 and didn't sell over $20, you missed the boat. You won't see that range again any time soon (I'd argue that it's silly to buy a stock in the first place on the premise of short term movements, that's the greater fool game and not one to be played). Sell them and move on to something better.

[odessasteps]

Doesnt Comcast now own part of the Phillies, not just the Flyers and Spectacor?

[piranesi]

You know these are dark times when Phantom Lord is a voice of reason.

 

I don't know if this has been touched on but I have heard a lot of people through my social media talking about how WWE would make a lot more money off of monthly $60 PPVs compared to $10 monthly subscriptions and that really is not the case. PPV takes something like 50% of the revenue of PPVs whereas WWE gets an 80-90% return for their Network depending on which Streaming Device they have to pay dividends to. You figure that they have 650K+ on the Network, they had a lot more people purchase Wrestlemania than they expected with the inclusion of the Network, and more people are watching the PPVs, they are not that far off from what a lot of people I've read have been assuming.

I think this stock crash is temporary (I bought 3 stocks at around $11) but I expect them to go up soon. People act like Vince McMahon doesn't know what he is doing but at the same time he has been essentially the only game in town for over a decade and has done things nobody ever expected of professional wrestling.

1) The subscriber numbers aren't "assumptions," management explicitly stated first they needed 800K-1M to turn a profit, then it came out they only signed up around 667K, and now management just said they need 1.3-1.5M for the network to be profitable. The assumptions aren't what numbers they need to hit for this to succeed, the assumptions are whether those numbers WILL be hit. I'm sure this will only earn me more fans here, but I see there being VERY little chance of them hitting 1.5M subscribers EVER, barring a complete move of RAW onto it.

2) Vince is a good wrestling promoter, he's not a good BUSINESS MAN. WBF? XFL? WWE Films? Erroding WWE profitability over past decade despite a virtual monopoly? These are not the marks of a competent capitalist. The guy knows how to build compelling storylines and book good matches. THAT'S IT.

3) If you bought the shares at $11 and didn't sell over $20, you missed the boat. You won't see that range again any time soon (I'd argue that it's silly to buy a stock in the first place on the premise of short term movements, that's the greater fool game and not one to be played). Sell them and move on to something better.

 

 

In today's business climate though, it would take not just a good businessman but an exceptional one to be a public company and refuse to go along with the "You're not valuable unless you are expanding into everything to become a mega-empire" mentality that is driving the market.

 

Vince is over-reaching like everyone else in the Game of Monopolies.

 

The reaction to this however has been weird.  Every company that comes into a new carrier negotiation inflates their expectations.  AMC inflated what they expected to get from DISH.  Then they pulled their channels for a few weeks and everyone flipped out and they ended up taking less.  No one said their CEO should be fired for not getting what he publicly said they should get.  Everyone knew it was just a bargaining tactic.  Their stock didn't plunge because "THE CEO LIED!!!!"

 

This, sadly, is just more proof that in t.v./telecom bundled empires are the only safe way to do  business.  If you sell only one thing, and cannot threaten to pull other valuable things, then you are bargaining from a position of weakness.  Looking back, all of Vince's failed projects were an attempt to do just that, to give his company what AMC has or Viacom has, a whole bunch of content that is valuable enough that you can threaten to take it all away if you don't get what you want.  Yes.  they all sucked and failed, but the idea behind expanding the product is the conventional wisdom of this era.

 

It is an obscenity...but that's how we decided to let media companies do business back in the 80s and 90s. 

[Bustronaut]

The average cable household has 247 channels available to them, but watches approximately 13 of them, that's 95% unwatched, and I'd guess the sports channels fall into that 95% for a lot of people.

[Matt D]

Piranesi just basically said that in an alternate reality

 

This:

 

 

 

is this:

 

[Antacular]

In defense of AMC, it's an entire CHANNEL, not just 5 or 6 hours of weekly broadcasts. If one show doesn't go AMCs way, they can always replace it with another. If RAW ratings start to tank, that's the entire company.

The fire Vince talk is all on the completely misleading numbers. 900K to profitability turns into 1.4M, only gets 667K. Promises 200%+ increase in fees, delivers 30%. If GlaxoSmithKline promised 1M new patients for its new cancer drug and almost $1B in licensing fees for a new type of equipment, and only pulled in 2/3 and $200M respectively, shareholders would be flipping a shit as well.

[piranesi]

Somebody gets me.

 

Although more like:

 

 

  =   

 

 

and so

 

  =

 

 

 

 

Same company...different audiences...all held hostage in the same negotiation.

[Hagan]

Yeah, this is one of those situations where if they didn't bullshit and bluster this wouldn't be seen as a complete disaster.

 

The Network was something that they've gambled the short-term interest of the company, with the potential to either re-shape everything about their economics for good or bad. They have the content; they have the cheap price, they have the means to deliver it. All that aside, it still didn't explode, though I think the number they got for an initial period is okay. I do see it eventually catching up, either because it'll just become so established that people will just feel like it's something they need, or they'll jack the price up, or maybe wrestling gets hot again and it lifts everything up.

 

The rights fees aren't great but not a disaster, if you ignore what they predicted. They're undervalued, but it's scary that they believe their own bullshit about how large their audience is.

 

But hey...can't fault them for taking a step to preserve the future of their company for the next generation and beyond. It would be something if the company tanks because they decided that what their audience wanted was all the wrestling available in the world and the audience ends up rejecting it.

[blitzkrieg]

Really I think it mostly just shows what a bad fit wrestling is as a publicly traded company. Their main business is tied to a fickle audience that historically has gone through booms and busts. The nature of the business doesn't allow them to make quick changes that show immediate results. Attempts to diversify have mostly shown that wrestling fans like wrestling but don't like wrestling mixed with other things.

The Network is probably the best thing they've done in forever but it was probably over hyped. They probably should have taken a stance that they would probably should taken more of a startup perspective that they were probably going lose money at first but that this is the future and they're invested in it for the long run.

[Hagan]

And realistically, despite the WWE positioning itself, intentionally, as being bigger than any one guy or being a brand that's not tied into a single guy or a single star, if another Hulk Hogan or Steve Austin exploded, or if a feud like Austin/McMahon happened and the ratings doubled and new fans got pumped on wrestling, and old fans tune back in and discover that not only is wrestling hot again, but they can go and watch all the shit they watched when they were young, they'll be fine.

 

Basically, just like every other wrestling promotion in history, what they need is a new star and a hot angle to turn the business around.

[Antacular]

I'm gonna be honest, in the age where UFC is running a show almost every week, I don't think wrestling will ever reach Hogan/Rock/Austin levels agains. It'll remain a niche -p-r-o-duc-t with a loyal, core audience, but all the potential future Rocks/Austins are now taking their chances with MMA, not the squared circle.

[Cole Miner]

I don't know if this has been touched on but I have heard a lot of people through my social media talking about how WWE would make a lot more money off of monthly $60 PPVs compared to $10 monthly subscriptions and that really is not the case. PPV takes something like 50% of the revenue of PPVs whereas WWE gets an 80-90% return for their Network depending on which Streaming Device they have to pay dividends to. You figure that they have 650K+ on the Network, they had a lot more people purchase Wrestlemania than they expected with the inclusion of the Network, and more people are watching the PPVs, they are not that far off from what a lot of people I've read have been assuming. 

 

Problem is the costs don't end with the PPVs. They have to spend money to provide other content on the channel besides the PPVs. Plus some of that 80-90% has to pay for the infrastructure of the network. Server costs, bandwidth etc. I don't want to take a guess of how much that would be but it is unlikely that it is cheap.

[Vincey Greene]

And realistically, despite the WWE positioning itself, intentionally, as being bigger than any one guy or being a brand that's not tied into a single guy or a single star, if another Hulk Hogan or Steve Austin exploded, or if a feud like Austin/McMahon happened and the ratings doubled and new fans got pumped on wrestling, and old fans tune back in and discover that not only is wrestling hot again, but they can go and watch all the shit they watched when they were young, they'll be fine.

Basically, just like every other wrestling promotion in history, what they need is a new star and a hot angle to turn the business around.

I genuinely don't see it happening. The problem with the fragmented nature of entertainment is that it's much more difficult to create a household name. In the 80s, WWE had Hogan for sure, Andre the Giant, and perhaps Macho. In the 90s/early 2000s, Rock and Austin. Now? Nobody is even close to a household name. And they won't make one. It's not happening. Almost nothing is a household name because media isn't a unifying experience for the most part anymore, it's insular. If you don't put out something completely transcendent like a Breaking Bad, you won't have the unifying experience that was possible when your competition was a couple dozen cable channels.

TL;DR version: wrestling will keep doing enough business to exist and might even get kind of hot from time to time, but the Monday Night Wars level of mainstream excitement is gone forever and ain't coming back.

Prove me wrong, CM Punk. (He's the only one I could see pulling it off and he doesn't wanna work there anymore apparently)

[Josh Mann]

My wife doesn't watch WWE at all but she knows who John Cena and Daniel Bryan are but probably couldn't pick HHH out of a police lineup. That's my household name gauge.

[Fat Spanish Waiter]

 

Prove me wrong, CM Punk. (He's the only one I could see pulling it off and he doesn't wanna work there anymore apparently)

 

[Josh Mann]

Another six months and he's going to look like one of the Chicago Superfans.

[piranesi]

 

 

Prove me wrong, CM Punk. (He's the only one I could see pulling it off and he doesn't wanna work there anymore apparently)

 

 

 

This is FSW's clipboard forever.

 

CTRL + V

CTRL + V

CTRL + V

[Libs]

If Punk was going to break out in a way that would massively change business, he would have done it in the summer of 2011.

The angle was ruined in the end, sure, but even before Triple H and Kevin Nash firmly stepped into it, it's not like he was showing signs of moving numbers in a way that way that would lead anyone to realistically think he could be built into an Austin/Hogan, at least not in the era of media/entertainment consumption we're in.

[Elsalvajeloco]

I'm gonna be honest, in the age where UFC is running a show almost every week, I don't think wrestling will ever reach Hogan/Rock/Austin levels agains. It'll remain a niche -p-r-o-duc-t with a loyal, core audience, but all the potential future Rocks/Austins are now taking their chances with MMA, not the squared circle.

 

Ant, I agree with about 95% of what you've said in this thread but I don't know if I can agree with this for a variety of reasons. If there are any potential Hulk Hogans and Dwayne Johnsons in MMA, I haven't seen them. I would say most if not all the people that MMA has "stolen away" from pro wrestling wouldn't make it in the WWE anyway.

 

I think someone like Tom Lawlor should be in WWE as a manager, but that's only because he isn't a good MMA fighter. He's okay at best, but he would make more money if he signed with WWE or went to Japan. Barnett would have the best chance out of anyone, but I doubt he would be a star for three reasons. First off, his physique wouldn't be acceptable in today's bodybuilder hardon WWE. Even when he popped for PEDs twice (he actually did 3x but that's a different story), he had love handles. Second, everything he has done has been a flagrant rip off of something else. Anytime he tried doing something different when it came to promos, it has been downright cringeworthy and unnatural. MMA fans overrate his "promo" skills because he is basically doing the best old school promos word-for-word. Reason three would be that this guy is know to come off the hinges. He doesn't get along with anybody and has made very few friends in MMA. He would last like two weeks in WWE before he got buried/fired. Reason 2 for Barnett would apply to Chael, but Chael can at least improvise a little. I think pro wrestling is more a novelty to Chael because he is too much of a natural competitor. Amateur wrestling stole Chael from pro wrestling and not MMA. Plus, I doubt he would be a fan of the insane schedule.

 

Other than that, who do we have left? King Mo was never the biggest guy and kinda a mushmouth despite having natural charisma. Mo would have been a big star in the regional days as Junkyard Dog's tag partner, but having a second Shelton Benjamin minus the agility would not bring new fans in. For Rampage, it's basically Barnett's reason three but x2000. This dude is crazy as batshit. If he went on a European tour for WWE, he wouldn't make it back with a job. I'm dead serious. 

 

On the women's side, it's basically Shayna Baszler and Ronda Rousey. You guys saw Shayna's picture on the frontpage of F4W a week or so back. She is the antithesis of a WWE diva. Not amount of dolling up or skanky wrestling costumes could fix that. With Ronda, judo stole her away from pro wrestling moreso than MMA. Her mom basically trained in judo since she could walk. Plus, she is very cliquish. That is the ONLY reason why for this Four Horsewomen bullshit. She would create enemies with the other girls very fast.

 

That's pretty much everyone I can think of. Also, Ant is underestimating the whole physicality angle. People keep saying that NFL and the NBA is stealing people from MMA. I think that's wrong in general. So is MMA stealing folks from pro wrestling. Jordan Burroughs, Olympic gold medalist and probably one of Sempervive's mancrushes, decided he wasn't going to MMA after watching Alvarez-Chandler 2. Burroughs legitimately could have been one of the best champions in MMA history. People just don't like to get punched in the face. I feel the same definitely apples to pro wrestling but on a much different and bigger scale than MMA. No one has racked up a bigger body count in sports besides boxing (which in the thousands now according to BoxRec). The problem for Vince is that up until the CTE/NFL scandal, no sport has had a similar profile recently with it. You'll have a Len Bias type thing here or there with other major sports, but no one really blames the NBA, NFL, or MLB. A pro wrestler dies and the first thing people look for is steroid use. They don't do in a "he was his own worst enemy" way like pro wrestling fans look at it. Casual fans look at in a "what's wrong with pro wrestling" way because they look at people like Nancy Grace for opinions.

[Matt D]

I keep getting this note confused with the Game of Thrones Unsullied one and forget that we're not talking about a battle royal through a tiny hole here.

[Antacular]

I didn't mean that there were currently any Austin/Rock guys in MMA (although I'd argue that GSP and Brock (when they were around) were pretty damn close as far drawing ability is concerned), but that should some emerge in the future, they'd gravitate more towards MMA than WWE. You hear guys like Taker and Rock say that if MMA had been bigger when they were younger, they would've given that a shot instead of prowres, and you can even see that with Punk and his "I know kung fu" side hobby. Well, it's a LOT bigger now. And unlike prowres (but very similar to the big league sports), you have NCAA wrestling taking place as the "training grounds" of sorts, much like NCAA foosball and basketball are for NFL/NBA. Unless you're specifically picked for the WWE training facility or turn enough heads on the indy's a la Punk and DB, there's zero chance of Vince taking notice (unless you have one leg, and even then...)

I've never heard about NFL/NBA taking guys from MMA (although this is probably on account of my mental image of the future MMArtist being a guy who wrestling throughout high school up until college, and being as football/wrestling/basketball season all overlapping, I don't image anyone playing all 3, or even more than 1 with any competence), but I suppose it's a valid point. And you're right: some guys will straight up just never want to take a punch in the face. But in general, if a young, charismatic athletic kid wants to try and make it big, in 2014 I see him trying out for Ultimate Fighter or something "real" so he feels his abilities are validated through actual competition, rather than attempting to be Vince's next pet project.

[Elsalvajeloco]

I didn't mean that there were currently any Austin/Rock guys in MMA (although I'd argue that GSP and Brock (when they were around) were pretty damn close as far drawing ability is concerned), but that should some emerge in the future, they'd gravitate more towards MMA than WWE. You hear guys like Taker and Rock say that if MMA had been bigger when they were younger, they would've given that a shot instead of prowres, and you can even see that with Punk and his "I know kung fu" side hobby. Well, it's a LOT bigger now. And unlike prowres (but very similar to the big league sports), you have NCAA wrestling taking place as the "training grounds" of sorts, much like NCAA foosball and basketball are for NFL/NBA. Unless you're specifically picked for the WWE training facility or turn enough heads on the indy's a la Punk and DB, there's zero chance of Vince taking notice (unless you have one leg, and even then...)

I've never heard about NFL/NBA taking guys from MMA (although this is probably on account of my mental image of the future MMArtist being a guy who wrestling throughout high school up until college, and being as football/wrestling/basketball season all overlapping, I don't image anyone playing all 3, or even more than 1 with any competence), but I suppose it's a valid point. And you're right: some guys will straight up just never want to take a punch in the face. But in general, if a young, charismatic athletic kid wants to try and make it big, in 2014 I see him trying out for Ultimate Fighter or something "real" so he feels his abilities are validated through actual competition, rather than attempting to be Vince's next pet project.

 

Taker and Rock probably would have done it, but they wouldn't have made more money in MMA. The only MMA heavyweight besides Lesnar to make a dent in cracking the top purses is Fedor and he never fought in the UFC. Couture would be a close third but he was in semi-retirement by the time the sport hit its apex. Plus, Taker and Rock don't have the prerequisite backgrounds to do it. All the UFC heavyweight champions were the best at the something besides Tim Sylvia. Cain, even though he never won a NCAA title like Lesnar, was perhaps the best HW never to win a D1 title. In addition, he competed in a much tougher era than Lesnar. Someone like Rock who had all the connections with pro wrestling wouldn't do Brazilian Jiu-Jitsu for 5+ years or try to make an Olympic wrestling team to make no money. I believe it's just them blowing smoke up people's asses (specifically MMA fans).

 

As far as the training camp aspect goes, it definitely depends on the people. Lesnar's homeboy Cole Konrad, a much more decorated wrestler, walked away from MMA undefeated to become a financial trader in dairy products. Mark Ellis, another amateur wrestler on par with Lesnar in terms of athleticism and had a WWE ready physique, had one bad performance and walked away. MMA isn't as alluring as people make it out to be. Getting punched and kicked for a living is a hard life. Wrestling trains you for the certain level of competition it takes to to succeed in MMA, but MMA is a different beast in terms of physical and mental toughness. The same applies to all the other martial arts. In the same light, you don't show up for pro wrestling and be successful. King Mo learned that. Oh shit, I have to go through wrestling school and do work in the development league? He said fuck that noise. It would be the same for a former NCAA wrestler who went from WWE/TNA/Japan/indies to MMA. Oh shit, I have to train boxing, Brazilian Jiu-Jitsu, AND muay thai? Fuck that noise.

 

The NFL/NBA/MLB thing has been a big talking point because MMA fans are unsatisfied with the current crop of MMA heavyweights. The same argument has applied to boxing since the Klitschko era began about ten years ago. The flaw in the argument, other than the fighting part, is most of those guys would truly fight at 205 and below (or 200 and below in boxing). Just because someone is 6'2" - 6'4" and 240 pounds doesn't mean that they should fight at that weight.

[odessasteps]

I keep getting this note confused with the Game of Thrones Unsullied one and forget that we're not talking about a battle royal through a tiny hole here.

Just dont get them confused and mention how [name redacted] dies soon.

[Nice Guy Eddie]

Do you guys think any of Alexanda York's computer programs could fix this?

And we would have gotten the time it would take to fix this.

[Antacular]

Tyson bit somebody at somepoint and Mayweather refuses to fight Pacquiao. That's the extent of my boxing knowledge.