Wrestling media focuses too much on linear viewership trends. It’s allowing us to see a mirage of consequence that isn’t really there.
I, too, am guilty of “analysis” announcing that the latest week’s Raw is the nth-lowest viewership ever. Or that some week of Smackdown is the lowest ever since the move to Fox. As if that’s the story most relevant to the economics of the wrestling and TV industries.
Graphs like the one above read like doom for WWE. And such analysis is met with dismissive reminders that “all TV is down” or, alternatively, that WWE is about to go out of business; the latter usually companied by a Vince McMahon GIF.
Leading up to the 2018 TV rights negotiations, some commentators decried the latest episode of WWE’s poorly-received programming and the news of the nth-lowest rating ever, and remained skeptical networks would reward the company with an increase in rights fees. Yet NBCUniversal and Fox together agreed to give WWE a 3.6x increase that spring. We are going through a similar exercise as 2023 negotiations approach.
With our Monday Night War educations, we’ve been focusing on linear macrotrends in viewership, which are decidedly down and to the right.
Wrestling media people may lack the lessons — but not the data — for assessing wrestling viewership in a context that’s more informative to the economics of the wrestling business.
So what’s the right way to analyze wrestling viewership? What factors truly indicate the value of future TV deals?
I’d hate to write something that’s basically a listicle but consider it a tribute to Wrestlenomics hero George A. Barrios, who in his many presentations as WWE co-president was fond of describing the company’s business as a number of “tiers” or “pillars”.
The future of the wrestling business will depend greatly on the outcome of future U.S. TV rights negotiations of WWE and AEW.
For WWE, those negotiations will likely happen around mid-2023.
For AEW, if WarnerMedia picks up the option to extend their deal through year-end 2024, negotiations for All Elite Wrestling U.S. rights will be happening around the same time as WWE, in mid-2023.
A period of three years is an eternity in the media business, but there are some key factors that we can watch to get a sense of how those negotiations will go — and none are an absolute measurement of viewership.
1. P18-49 Daily Rank
Not total viewership, not key demo viewership; the ranking of the key demo, compared to other programming. Viewership is interesting and important to advertisers, but we’re trying to anticipate the future of wrestling TV rights. What justifies huge TV rights fees for a program is that the given program is one of the most highly-viewed programs.
Former Fox Sports executive Patrick Crakes spoke to The Houston Chronicle recently about the NFL’s declining viewership and league’s future TV value.
“It’s all about what the NFL delivers compared to everyone else, and the gap in that regard has never been wider…”
“Even if the NFL declines by 10 percent, its value will remain to programmers and advertisers,” Crakes said. “The ratings are beside the point. The league still will be able to double its value in the next round of bargaining.”
So what are the trends like for this metric for various wrestling programs? Showbuzzdaily.com reports the P18-49 ranking for the top 150 cable originals every day. It turns out these rankings for WWE are much more stable than its linear viewership trends. Raw has been ranking between #2 and #5 since at least 2014. Although the slip to #5 for Q3 this year bears closer watching. Smackdown has been ranking between #1 and #5. Dynamite and NXT have clearly improved in Q3 from where they were earlier in the year.
Average Daily P18-49 Rank, by Quarter
2. New TV deals for second-tier sports properties
What kinds of deals will WWE and AEW’s TV peers get between now and 2023? Big properties like NFL, NBA, MLB, college football, college basketball, and NHL will always be a priority over wrestling. How much money will be left over to bid on wrestling after, for example, billions are allocated for new NFL contracts, which might be completed later this year?
Some peers, like UFC (whose deal with ESPN is through 2025), have deals whose terms extend beyond when wrestling rights will be dealt.
But there are other deals that will be completed before wrestling comes due. Will other non-major sport properties — like NASCAR (the Fox deal expires in 2024), tennis (ESPN’s deal for Wimbledon ends after 2023), and various soccer rights — get an increase?
Are digital/streaming rights being sold on these properties too, as in the case of the NBA and NFL? Or are the secondary sports properties still too small to compromise on selling anything but exclusive broadcast rights on linear TV?
The speculation that the sports rights bubble is going to burst has so far been a myth. I tend to believe the demand for live sports will remain strong, indefinitely. The balance of dependency between partners like WWE and NBCUniversal has shifted greatly in recent years. Networks like USA have entered an era where they need their leading programs more than ever to sustain transmission fees and ad dollars. Consequently, for WWE, TV is no longer a low revenue funnel to drive sales for live events, PPVs, and merchandise; it’s the biggest revenue stream of all — even if the audience is a fraction of what it once was.
I think pay TV will increasingly become a medium that specializes in live content — mainly sports and news. And as the dependency on those types of programming increases, so will the economic value of the leading live content. Traditional cable/satellite subscriptions will cover a lower and lower percentage of households, for sure. But even if cable companies begin to face financial ruin, many major networks have pivoted to streaming and gone direct-to-consumer — fights with streaming devices notwithstanding. The potential migration of live sports rights from pay TV, exclusively, to digital — or some split of pay TV and digital — may only increase the number of bidders, the holy grail of course being if FAANG companies get involved.
3. The proportional delivery of the wrestling audience
Consider that, in the key demographic, Raw and Smackdown are delivering a combined 75% of the weekly viewership. But they are receiving a combined 87% of the rights fees. That’s if we take for granted NXT is getting as much as $30 million per year on USA.
I struggle to see how this degree of imbalance is sustainable through a future round of TV deals. If so, this means a big increase for AEW and NXT, possibly at multiples over their current fees. It’s unclear what this means for Raw and Smackdown, which may have to come to terms before AEW since WWE flagship brands’ deals expire three months earlier (September 2024), in the scenario WarnerMedia options AEW through December 2024.