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22.7.14 1442
The W - Pro Wrestling - How PPVs Make Money
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Freeway
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Since: 3.1.02
From: Calgary

Since last post: 212 days
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#1 Posted on | Instant Rating: 6.33
I was roaming the Internet today and noticed that the WWE has released their 1st Quarter earnings for the Fiscal Year of 2005. In the report, Linda McMahon mentioned that since the PPVs are doing so well, they're adding two more. Now, I went to WWE's Investor Relations website and took a gander at the PPV Buys [PDF, pages 4&5]. And I came to a conclusion.

The Big Four PPVs will have higher ticket prices. Let's use Unforgiven's ticket prices [Ticketmaster] as an example of The Other PPVs: $200 for ringside, then a variation of $90, $75, $50 & $30 for the rest. There are a lot more non-ringside seats than there are ringside seats, so let's use half of a ringside ticket ($100) as a ballpark figure for average ticket price. I can't find figures for Big Four ticket prices, so I'll exclude them until I can find actual prices. SummerSlam had a capacity of 16,000. Let's lowball a ballpark figure and say a PPV will have around 15,000 attending. At an average of $100 a pop, that's $1.5 million. Sounds a little high, but let's keep rolling.

Buys for Judgment Day & Vengeance were about 230,000 apiece. PPVs are now about $34.95 apiece (at least Mania & SummerSlam were, correct me if I'm wrong)...so with 230K buys you bank about $8 million. This is noting that PPVs cost more to the consumer and even though they garner less buys now than during the boom, it costs the WWE a similar amount to hold them to how much it cost during the boom.

And this isn't even counting WrestleMania, which got 885,000 buys (for around $31 million in PPV revenue), and its' huge attendance and the money from that.



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Since: 4.9.02
From: California

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#2 Posted on | Instant Rating: 3.31
With all that said, I predict Summerslam will get one of the worst buyrates ever for a "Big 4" ppv of all time.




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Since: 25.1.02
From: Chicagoland with Hoosiers, or "The Region"

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#3 Posted on | Instant Rating: 6.88
    Originally posted by Freeway420
    Buys for Judgment Day & Vengeance were about 230,000 apiece. PPVs are now about $34.95 apiece (at least Mania & SummerSlam were, correct me if I'm wrong)...so with 230K buys you bank about $8 million.


Just don't forget that the cable or satellite provide gets a decent enough cut of that; not sure what, but perhaps Guru or someone else would know.

Mania was actually $50 this year IIRC, so the bank from that one was probably substantial.



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Since: 2.12.03
From: Illinois

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#4 Posted on | Instant Rating: 1.83
That's always what I thought...WWF is always claiming how much more money they made at a PPV, but since ticket prices are always rising and PPV purchase amount goes up, of course they'll make more...



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Since: 3.1.02
From: Calgary

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#5 Posted on | Instant Rating: 6.33
    Originally posted by Y2J 420
    That's always what I thought...WWF is always claiming how much more money they made at a PPV, but since ticket prices are always rising and PPV purchase amount goes up, of course they'll make more...


House show ticket sales are down, if I remember right...but ticket prices are slightly up, and they're doing twice as many. T-shirt sales are likely down slightly and prices are the same. BUT...more money from more PPVs and similar (if slightly more) amounts of money spent on talent (about 25% of total revenue, IIRC) means that they almost always break even.

From what I've read, the WWF completely changed the way they ran things after losing tons of money during the mid-90s. Now they run things much better business-wise, so even if they make less money they can survive.



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Since: 1.8.02
From: Phoenix-ish

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#6 Posted on | Instant Rating: 8.47
    Originally posted by Freeway420
    The Big Four PPVs will have higher ticket prices. Let's use Unforgiven's ticket prices [Ticketmaster] as an example of The Other PPVs: $200 for ringside, then a variation of $90, $75, $50 & $30 for the rest.
FWIW, SummerSlam last year (in Phoenix) was $300 ringside, I had the next level down at $90, & am thinking the rest were about the same as you cited. Hence, only ringside is significantly higher for The Big Other Three. WM is higher across the board, naturally.

I swear we saw some discussion someplace about the cut that the cable/satellite provider gets. I can't for the life of me remember where that was. (Was it maybe a $$$ renegotiation with one of the satellite providers?) But my recollection was that the provider gets a pretty hefty cut -- I'm thinking they were trying to up their cut from $15/buy to $20. (Senility sucks.)
fuelinjected
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Since: 12.10.02
From: Canada

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#7 Posted on | Instant Rating: 4.83
They're structured in a way that they can keep making cuts and turning profits but what's on the decline is the amount of money that the wrestlers will be making.

Poor creative direction and booking results in reduced ratings, PPV buys, and house show attendance. The ones who suffer aren't the McMahon's, who still find ways to give themselves big bonuses, but the wrestlers themselves.

If anyone could ever figure out the % of company revenue that goes to the wrestlers, I'd be willing to bet its down around 15-20% or lower. Contrast that to any major sport or entertainment product and they REALLY get the short end of the stick.



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Since: 17.6.02
From: Silk City

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#8 Posted on | Instant Rating: 4.97
I can't recall the PPV payoff percentages exactly. It was in the Observer sometime in the past year. If I remember correctly, the PPV provider, e.g InDemand, Direct TV, get either %40 or %50 of the gross. These figures may be off, as I can't recall the exact percentages. I do remember being surprised at how much the providers got. And for Emma, I think it was WWE trying to lower DirectTV's cut that got them thrown off DirectTV until they agreed to the previous contract.



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Since: 6.1.02
From: Outer reaches of your mind

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#9 Posted on | Instant Rating: 6.14
    Originally posted by fuelinjected
    They're structured in a way that they can keep making cuts and turning profits but what's on the decline is the amount of money that the wrestlers will be making.

    Poor creative direction and booking results in reduced ratings, PPV buys, and house show attendance. The ones who suffer aren't the McMahon's, who still find ways to give themselves big bonuses, but the wrestlers themselves.

    If anyone could ever figure out the % of company revenue that goes to the wrestlers, I'd be willing to bet its down around 15-20% or lower. Contrast that to any major sport or entertainment product and they REALLY get the short end of the stick.


This sort of stuff makes me I'm always pro worker (yes even one's who I don't necessary like). Hearing that they have to tighten their belts if things don't go to well yet McMahon can give himself a bonus errr... *Sigh*, but I'm sure he's not the first CEO to have that mindset. But he might have the market cornered on being the first CEO to give out quarter million and million dollars to people who aren't anywhere as talented than the people currently in the company making less. (even though I just read on another thread the SDTE contract is a million over 4 years, doesn't seem as brutal but still kinda bad)

(edited by Net Hack Slasher on 22.8.04 2202)


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Dahak
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Since: 12.5.02
From: Junction City OR.

Since last post: 1933 days
Last activity: 1586 days
#10 Posted on | Instant Rating: 1.97
    Originally posted by fuelinjected
    They're structured in a way that they can keep making cuts and turning profits but what's on the decline is the amount of money that the wrestlers will be making.

    Poor creative direction and booking results in reduced ratings, PPV buys, and house show attendance. The ones who suffer aren't the McMahon's, who still find ways to give themselves big bonuses, but the wrestlers themselves.

    If anyone could ever figure out the % of company revenue that goes to the wrestlers, I'd be willing to bet its down around 15-20% or lower. Contrast that to any major sport or entertainment product and they REALLY get the short end of the stick.


Most buisnesses run a total labor percentage of about 25% with taxes. Or at least US buisnesses.
But I would guess the WWE's labor percentage must be higher. They wouldn't have that much cost for buying materials to make the product.
But if the wrestlers make 20% that is extremely good. There is a lot more employees for WWE Inc than the 60 or so wrestlers 10 announcers and the 4 McMahons.
There are camera men, the monkeys in the truck, janitors, and a lot of other support personnel. Sure they make a lot less but there has to be more of them. I would guess it's close to a 50/50 thing between the on screen "talent" and the supporting workers.
Plus taxes is a problem. Oh and travel cost has to be huge for the WWE.



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PerthHeat
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Since: 16.8.04
From: Perth Australia

Since last post: 2932 days
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#11 Posted on
You want to know how PPVs make money?

Idiots like me keep buying them hoping the next one will be ''better''

As has been noted before in another thread the Monday night Raw after Summerslam was a better show than SS

If that continues to happen people will sit on their hands and enjoy the free stuff . It has always been my feeling if I am willing to pay for something I feel I deserve something special, and I dont think I have this year.



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Since: 4.9.02
From: California

Since last post: 1920 days
Last activity: 1651 days
#12 Posted on | Instant Rating: 3.30
    Originally posted by PerthHeat
    You want to know how PPVs make money?

    Idiots like me keep buying them hoping the next one will be ''better''

    As has been noted before in another thread the Monday night Raw after Summerslam was a better show than SS

    If that continues to happen people will sit on their hands and enjoy the free stuff . It has always been my feeling if I am willing to pay for something I feel I deserve something special, and I dont think I have this year.


My sentiments exactly PerthHeat. For starters I declare I am definitely not buying Unforgiven or No Mercy this year. Besides, whatever I miss I can just get on DVD or VHS a few weeks later.




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Forgive my constant switching tenses. With that in mind.... Jivesoulbro got tickets for this at the last minute and I drove down to Austin. We had no problem parking and there were no lines for anything.
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