Published on August 9th, 2014 | by Gareth Davies0
Can the WWE Network be saved? Or is it a case of history repeating itself?
It was supposed to be the dawning of a new era in sports and entertainment. One that would revolutionise an iconic American institution, enriching the lives of millions of fans around the globe in the process. An innovation born from one of the greatest business minds of the past century, it would create a legacy that would last for generations to come. It was going to be, in all sense of the words, a game changer.
The XFL, Vincent Kennedy McMahon’s renegade American football league founded in 2001, did manage to create a legacy. Sadly it was as the butt of an absurd joke, and a stern warning to those who bite off more than they can chew. After only one season of poor quality football, staged “drama” the average two year old wouldn’t have fallen for, and queasy presentation (prompting the infamous Bob Costas quote “It has to be at least a decade since I first mused out loud, ‘Why doesn’t somebody combine mediocre high school football with a tawdry strip club?’ Finally, somebody takes my idea and runs with it.”) the XFL folded like an origami swan. In it’s wake the defunct league saddled McMahon and his partners NBCUniversal with $70 million worth of debt, split evenly between the two. In the years since then the letters “XFL” have become synonymous with only one thing: Catastrophic failure.
Unfortunately, situations like the XFL have become all too common for McMahon over the past 30 years. Because despite all his wealth and prosperity, McMahon carries with him a strange inferiority complex. Perhaps it’s the stigma of growing up as a dyslexic boy in a Virginian trailer park. Or the fact that his Greenwich neighbours turn their nose up at him because he’s the “wrestling man”. Whatever the reason, Vince is a guy who even with a billion (ish. Depends on how the stock is doing that day) dollars in the bank still feels he has to prove himself to the world, and will fight you to the death to accomplish it. He’s not just some carny hick with a smoke and mirrors show. He’s Vince McMahon dammit! Visionary. Maverick. Creative genius.
So every once in a while McMahon will try to diversify his portfolio by turning his hand to something that isn’t “sports entertainment”. Boxing, competitive body building, restaurants, casinos, music, movies, even a run at political office, you name it and VKM has probably had a crack at it. Problem is these ventures always tank harder than a dwarf in a MMORPG. No matter what he does, and how much money he throws around, he simply cannot replicate the success he’s had with his fake fighting empire.
Of course with every action comes an equal and opposite reaction, and so every time one of these projects hits the skids it’s the wrestling product that ends up suffering. In 2001, right after the XFL fell apart, the WCW Invasion angle should have created a boom period for the WWE so large it could have risen out of sea and destroyed Tokyo. Instead due to the $35 million hole in his wallet Vince baulked at buying out the bigger contracts for WCW’s main event players such as Hulk Hogan, Kevin Nash, Bill Goldberg, Scott Steiner, Scott Hall, Ric Flair, and Sting. And then, likely due to the stress and strains of the XFL fallout, he botched the storyline so badly it was dead after only one show. Truth be told, after the whole sorry ordeal was over with it would have probably been more effective and less time consuming to just simply bring out sacks of cash to the ring and set fire to them one by one.
Which brings us to present day. Last week the WWE announced its second quarter results for 2014. And on the whole things look pretty positive. Ratings for Raw and Smackdown are up. So too is house show attendance (although that was a bit of a given considering the number of shows now factors in TV tapings as well), while online sales of merchandise continues to grow rapidly. And even though there’s a couple of bumps here and there (house show merchandise sales took a bit of a dive, and despite a better showing than usual WWE’s film division is still a long ways away from recovering its overall losses), generally the WWE is as healthy as it’s ever been. Sure the overall message was more “We’re doing fine” than “Look at this mansion made out of money I am living in with my harem of vaguely Eastern European beauties”. But then alarm bells weren’t exactly blaring either. The calm and placid exterior certainly convinced share holders, as the WWE’s stock rose by a healthy 4.4% on the back of the results.
Despite this a financial Sword of Damocles is currently swaying over Vince McMahon’s head, thanks to yet another outside venture that hasn’t produced the goods. This time however, unlike the XFL or any of its ill thought out brethren, if this one fails its debts can’t simply be swallowed up by McMahon’s vast fortune. Indeed if the WWE Network were to sink like a dying Kraken, the whirlpool created in its wake could severely damage the WWE for years, perhaps decades, to come.
There are four pillars upon which the WWE has built its empire. These are house shows, TV rights, merchandise, and Pay Per View. The Network was actually first dreamt up as a way to safeguard TV rights. In 2004 when WWE’s deal with Spike TV came up for renewal, a low ball offer from the cable channel left McMahon with no choice but to return to NBCUniversal cap in hand. Forced to agree to a deal that he felt didn’t reflect the true value of his product, he vowed never to be put in that position again. And so the idea of a WWE only channel was mooted, one that could be used as leverage against those boardroom jerks. Give us a fair deal pal, or we’ll put Raw on our own channel and take our audience with us.
It’s a fine theory, but the reality is slightly different. Wrestling is actually one of the very few genres on TV that can practically guarantee ratings. TNA, a company with little momentum and no real buzz about them, has consistently pulled in good numbers for Spike, and even WCW in its baffling and horrifying dying days still managed to attract more viewers than most prime time cable shows (which, as anyone who has ever seen a single episode of WCW Nitro from December 1999 onwards will attest to, is a truly remarkable achievement).
The problem is that high ratings are only worth a damn if someone is willing to spend money on the advertising space associated with them. And the truth is the majority of advertisers genuinely believe that wrestling fans are a bunch of dirt poor, moonshine drinking yokels who aren’t worth selling to. Therefore when it comes to wrestling, viewing figures don’t actually matter. A station could put up re-runs of The A Team and only bring in half the audience wrestling does, but because George Peppard has more credibility as a cigar chomping action man than John Cena has as a jacked up tough guy, marketers will pay more to flog their wears every 12 minutes or so if paired with Hannibal Smith and chums. As such, in this present climate, WWE needs TV a lot more than TV needs WWE.
Regardless WWE ploughed ahead, although rather unsuccessfully. Despite announcing in 2011 that the Network would arrive just after Wrestlemania 28, WWE didn’t have its ducks in a row (a recurring problem with WWE both inside and outside the squared circle) and failed to find a carrier for the channel. So the plan was changed. Traditional television is going the way of the dinosaurs anyway. What was needed was something brash. Bold. Cutting edge.
The decision was made to turn the Network in to an online over-the-top content provider. Using Netflix as their model, the WWE Network would house not only every WWE, WCW, and ECW Pay Per View ever produced, but also all future WWE Pay Per Views going forward. It was an ambitious plan, because even though the PPV business had been declining over the years, it was still WWE’s most lucrative revenue stream.
On February 24th 2014 the WWE Network launched in the United States. For just $9.99 a month as part of a six month commitment, the Network offers over 100,000 hours of on demand shows as well as a live 24/7 streaming channel. By including all future Pay Per Views as part of the package WWE has burnt its bridges with their current PPV carriers and essentially bet the farm on this one endeavour. And so far it appears that the gamble hasn’t worked out.
That the Network is struggling to attract an audience is not in doubt. Initially the Network was expected to gain over a million subscribers in the US alone by the end of the first year. Currently that figure stands at 700,000 (as of 30/06/2014). And with no obvious can’t miss event between now and the end of the year, it’s difficult to see that number growing substantially if at all. The irony is of course that unlike previous McMahon inspired disasters, the Network is actually a fantastic product. Not only does it contain every single WWE, WCW and ECW PPV (which, let’s face it, is an absurd amount of content just by itself), but also any number of TV shows, original documentaries, and flimsy but fun reality programmes like Legend’s House and Total Divas. Any wrestling fan, even a lapsed one, would find more than enough to watch every month to justify the $9.99 price tag.
Therefore the issue isn’t what’s wrong with the Network. It’s rather what’s wrong with WWE. For the past decade or so the WWE has become bizarrely insular and formulaic, ever more reliant on returning stars to revive their stale top tier programmes. And while it appears that this is slowly changing with the introduction of The Shield, The Wyatts, and Daniel Bryan in to main events, Summerslam will still be headlined by John Cena and Brock Lesnar, two men who first debuted for the company 12 years ago.
The major problem however is that over the years WWE has conditioned its viewers to believe that wins and losses don’t matter. Whether it’s Cena coming out the next night after a big defeat smiling and joking without a care in the world (he even claimed in one promo on national television that “titles come and go” with a shrug, which is beyond stupid when your job is selling scripted prize fighting), or the mid card trading victories between themselves over and over again, WWE events aren’t treated like big deals by either fans, or the company itself any more. Sure folks will pitch up for the spectacle and pizazz of Wrestlemania once a year. But why bother buying the Survivor Series when A) you can just tune in to Raw the next night to find out who won and B) the results won’t make a difference in a month’s time anyway?
Take Cesaro as a perfect example. An extremely talented grappler with a great look and the ability to speak five different languages, the former Claudio Castagnoli should have WWE bigwigs rubbing their hands with glee. But despite being a celebrated performer with crowds nationwide and being booked to win the first ever Andre The Giant Memorial Battle Royal, since then the Swiss Superman has been given a terrible entrance theme, had his best move taken away from him, and – most importantly – has been beaten like a drum at every opportunity. Most would consider it a form of sabotage, if the exact same thing hadn’t happened to Kofi Kingston, Zack Ryder, Dolph Ziggler, Fandango, and Jack Swagger before him (It’s also worth noting that Daniel Bryan would have ended up the same way, namely contesting a meaningless feud with Sheamus, had CM Punk not walked out of the WWE in January and in doing so scrapped the planned match between him and HHH at WrestleMania). Why WWE does this is anyone’s guess. But it’s becoming increasingly obvious that these half hearted pushes are discouraging fans from getting behind any wrestler. The argument as to why John Cena has been on top for so long is that no one is popular enough to replace him. The counter argument to that is that under the current regime, no one is allowed to become popular enough to replace him.
All this results in four million people willing to switch their brains off and watch 3 hours of meaningless sports entertainment every Monday night for free, but not willing to part with their hard earned cash to see the same old faces doing the same old things. It’s that situation, rather than trying to “fix” the WWE Network, that the company should be addressing.
The knock on effect of course is that WWE has already started making drastic cuts to personnel and production values in an attempt to offset the Network’s losses. Garett Dylan, Travis Tyler, Slate Randall, Mac Miles, Dani Jax, Mason Ryan, Shaul Guerrero, Oliver Grey, Danny Burch, Aksana, Drew McIntyre, Curt Hawkins, Jinder Mahal, Teddy Long, Evan Bourne, Camacho, Brodus Clay, Yoshi Tatsu, JTG, Ezekial Jackson and Ricardo Rodriguez have all been released recently. Meanwhile Vicky Guerrero has also departed the promotion, and CM Punk’s contract expired at the end of July. As for non wrestling employees, veteran time keeper and all around production guy Mark Yeaton has been cut, as has Senior Vice President of Creative Eddie Feldmann. Meanwhile they are pushing through the worldwide roll-out of the Network sooner than expected, with it set to land in the UK on October 1st.
Eventually however the economics of the situation may force WWE to look at changing their creative direction in an attempt to increase their fan base. The previous business model managed to sustain the WWE year after year without them having to grow their core business at all. But with one of those four pillars now removed, and the others looking in decidedly rocky shape, that option no longer exists. The solution is as simple as it is complex. Expand or perish.
Despite his faults, Vince McMahon is a smart man. And he probably realises this more than anyone. Recent movements, such as an increased focus on tag team and women’s wrestling, seem to hint that he is at least aware of and working towards resolving some of the problems. Of course, after ten plus years of treading water, the solution won’t be a quick fix. Instead it will mean reconditioning the existing audience in to excepting new ways of doing things. Which in turn will require patience and a definitive long term plan. The current lack of which is largely responsible for the plight they find themselves in now.
The good news is Vince McMahon loves a fight, and this time he can’t afford to pull the plug and cut his loses. Instead he’ll have to see this through to the bitter end. And, when facing similar adversity, he has twice revolutionised the wrestling business before. Once in the 80’s with Rock ‘N’ Wrestling, after the cost of the first WrestleMania nearly forced him in to bankruptcy. Then again in the late 90’s with the Attitude era, which was necessitated by losing a ratings war with WCW.
Can he do it a third time? Well, it won’t be easy. And at 68 years old some will be writing McMahon off as yesterday’s man. But he’s always been at his best when his back is against the wall, and it wouldn’t be a major surprise if five years from now wrestling is in the middle of another golden age. At this point it’s long overdue.
After all, Vince McMahon “the internet media mogul” might even be enough to impress those snooty Greenwich neighbours of his.