TKO COO Mark Shapiro on Monday at the UBS media conference talked about possibly cutting house shows in smaller markets.
“While there’s a reason to have them because it’s good for the brand, we’re building audience, we’re putting them on in C and D counties, so we’re really stretching the brand, and we’re kind of amassing a greater array of eyeballs from all demos, so it’s good for our long-term growth. From a margin perspective, they are dilutive.” (Audio here)
Based on Nielsen county data, I looked up county size for each city where WWE ran live events in 2023. I don’t know what the criteria is for designating counties as A, B, C, or D, though, it seems based on population.
How many house shows did WWE run in 2023 that were in C or D counties? I found 23 (shown in the green table below).
Overall, WWE will run about 206 live events this year (not including small NXT house shows in Florida). So non-televised live events in those smaller population counties would account for about 12% of the company’s schedule.
Ticket sales and live event sponsorships accounted for just 12% of WWE’s annual revenue for the twelve months from July 2022 to June 2023. Adding in venue merchandise would only bring that percentage up to 13%. And remember that about half of WWE’s live events are televised.
Overwhelmingly, WWE’s revenue is driven by media, which is to say, various forms of video, especially live broadcast rights for Raw, Smackdown, and PLE/PPV events. In the same twelve-month period, media drove over $1 billion for WWE, or 79% of all revenue.
In a few quarters before the pandemic, WWE reported operating losses in its live event division, meaning the division overall was unprofitable for those periods.
Shapiro’s comment about wanting to cut house shows is a reminder of how much the pro wrestling business has transformed over the decades. A live event business has been turned upside down into a media business. Wrestling TV shows were once produced inexpensively in small studios. Often the promotion paid the local affiliate for the time slot, and the program served primarily to promote ticket sales, and later pay-per-view buys. Today the live event in the arena is at least as important as part of the media presentation as it is financially important in its own right.
And in the view of Shapiro, who hasn’t had the wrestling business’s habits ingrained in him, what’s the point of an event if it’s not driving those relatively new and higher-scale revenues from media?