Pay-per-view buys have been the gold standard for financial success in the sports entertainment industry for more than a decade. And with WWE Inc.'s biggest pay-per-view event of the year (and maybe of the decade) just around the corner, many are speculating on what the bottom line will be for Wrestlemania XX. Focusing only on pay-per-view revenue, however, is a somewhat outdated method of looking at WWE as a business.
WWE is, of course, headquartered in Stamford, Conn., which is an hour from New York City. Many casual viewers are, however, unaware that it also maintains offices in London, Los Angeles, New York and Toronto.
WWE is listed on the New York Stock Exchange under the symbol WWE after going public several years ago.
TRUE ENTERTAINMENT COMPANY
One could argue that the business has certainly evolved into a true entertainment company in recent years, more like Disney or Time Warner than a traditional "wrestling" company. When you think of the various offshoots of the core company, from web marketing, international merchandise sales, licensing agreements, television deals, advertising, movie companies, a record label and partnerships with CBS-Viacom and many others, you begin to get the picture of what a corporate juggernaut it is.
In fact, WWE Inc. lists its two prime activities on its corporate website as: "Live and Televised Entertainment, which consists of live events, television programming and pay-per-view programming. Revenues consist principally of attendance at live events, sale of television advertising time and sponsorships, domestic and international television rights fees and per-per-view buys," and "Branded Merchandise, which consists of licensing and direct sale of merchandise. Revenues include sales of consumer products through third-party licensees and direct marketing and sales of merchandise, magazines and home videos."
If all of this corporate speak is confusing to you and you had heretofore been under the mistaken impression that this company was only a "sports" company, then perhaps more of an explanation is necessary.
Companies such as WWE will derive income from various sources, as is suggested on their website. Licensing deals are all of those toys, T-shirts and gimmicks that are made by someone else that you see in stores all over the world.
Advertising revenues are derived from their television shows, for a start, where the Nielsen points the company is so obsessed with, in part decide how much WWE can get for a minute of ad time on their programming.
Of course, all of this flows nicely together, ideally creating a synergetic effect whereby all aspects of the company flow together, not unlike the theory behind the much larger (formerly named) AOL-Time Warner.
And what kind of company did you think this was?