Is AEW’s business growing? At this point, the answer is “yes”

Edit: YouTube views in the table below have been corrected, which overcounted YouTube views for Q2 2021 and prior, resulting in negative comparisons for 2021 and 2022.

All Elite Wrestling made splash play after splash play over the past year. It began with CM Punk’s return to pro wrestling and debut with AEW in August. That moment was followed up by the double debuts of Adam Cole and Bryan Danielson at the end of All Out in September. Since then, fan fervor for AEW has been on up the upswing as more talent continue to be brought into AEW.

It’s less likely the company that launched in 2019 will be very profitable until it gets a significant upgrade in U.S. media rights fees, which could be the result of negotiations that happen in the next year or two. But the data shows AEW’s revenues and other key metrics have grown over time.

Click to enlarge image

The metrics measured above are TV ratings, pay-per-view buys, YouTube search and Google web search. It is worth noting the numbers for Friday night program Rampage are not included in the data because the show is not a year old yet.

For AEW Dynamite, the show has seen a 29% growth in overall viewership through the first quarter of 2022. In the P18-49 demo, AEW’s flagship program has experienced a 28% growth through the first quarter of 2022. These numbers coincide with Dynamite’s move from TNT to TBS and having a strong lead-in from The Big Bang Theory. AEW also benefited from full-capacity crowds compared to limited crowds in 2021.

AEW has been running on the model of quarterly pay-per-views throughout its existence. They have added some slight wrinkles with the introduction of TNT specials, and a special pay-per-view co-promoted by AEW and NJPW was announced on April 20.

For AEW’s main four pay-per-views, with the exception of Double or Nothing, every show saw at least 50% growth in pay-per-view buys. All Out 2021 exceeded 200,000 pay-per-views, the most for a U.S. pay-per-view since 1999. In the first quarter of 2022, Revolution did not see the same growth in 2021, but it still was up 17% from 2021.

YouTube views and Google web search are not an exact science, but they do provide a view on how often people are watching content and how often a topic is in the mind of consumers.

YouTube views have grown 8% through the first quarter of 2021, but Q2 and Q3 do not seem to be great quarters for AEW, according to 2021 numbers. While Dynamite has seemed to have found a groove on cable television, it appears there is a lot more room for improvement when it comes to the digital space in places like YouTube.

YouTube data was sourced from Social Blade, which takes a daily count of the public video view count on a channel’s page. That data was adjusted by Wrestlenomics to correct for videos removed or re-added, which influences the view count.

In April, Brandon Thurston tweeted an analysis of worldwide Google web search for “active” wrestling personalities through January and March 2022. The top three of the list featured WWE talent, with Cody Rhodes taking fourth, though Rhodes now is with WWE.

To be clear, WWE is ahead of AEW in all categories discussed here, in some cases by multiples, with the exception of pay-per-view. WWE distributes its pay-per-view equivalent events primarily on streaming services like Peacock.

However, AEW itself has seen sharp growth in Google web search. In worldwide searches, AEW has grown 50% through 2022 Q1, and in the United States, AEW has grown 57% through 2022 Q1. While these numbers are promising, like YouTube, there is room for improvement in the digital space for AEW.

Jason Ounpraseuth has covered pro wrestling since 2019. He co-hosts the Gentlemen’s Wrestling Podcast.

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AEW Full Gear sold an estimated 145,000 pay-per-view buys, second-highest behind All Out

Header photo courtesy of All Elite Wrestling

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All Elite Wrestling’s Full Gear pay-per-view last Saturday is measuring at about 145,000 buys, we’ve learned. This is an early estimate that reflects all buys worldwide, traditional and digital, live and late. Traditional cable and satellite distributors take longer to report, so actual sales may vary accordingly. Late buys, which usually account for about 10% of sales, exceeding or underperforming expectations would also affect final results.

Bleacher Report was the exclusive domestic digital pay-per-view distributor of the live broadcast, which we believe mildly hurt U.S. sales. FITE was added on Sunday, the day after the live broadcast, as a digital distributor for U.S. customers interested in buying the replay. Both Bleacher Report and FITE offered the live PPV to U.S. viewers for AEW’s previous quarterly PPV, All Out, on September 5. FITE sold the event live and afterward internationally, as usual.

The event was also offered internationally via Facebook, but those sales were minor.

Between pay-per-view, tickets, and merchandise, Full Gear likely generated approximately $4 million. Only All Out 2021, which included CM Punk’s first pro wrestling match in seven years, drew more gross revenue. All Out we believe generated more than $5 million, largely driven by an estimated 205,000 PPV buys.

Sales of 145,000 buys worldwide for Full Gear would mean about $7 million in pay-per-view revenue before AEW’s split with distributors. If the average split to AEW is about 45%, then AEW would take about $3 million in pay-per-view revenue.

WrestleTix’s final count (sub required) of tickets distributed at the Target Center in Minneapolis was 10,442. Assuming 96% of that count represents paid tickets and that the normal average ticket price for an AEW PPV is $65, that gives us an estimated gate of approximately $650,000. 

If merchandise sold at the venue was about $15 per ticket sold, then that would mean an additional $150,000.

Brandon Thurston has written about wrestling business since 2015. He’s also worked as an independent wrestler and trainer.

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AEW Double or Nothing sold an estimated 115,000 pay-per-view buys globally, grossed revenues just short of Revolution

Inner Circle celebrates their win at AEW Double or Nothing 2021

Header image courtesy of All Elite Wrestling

All Elite Wrestling’s Double or Nothing pay-per-view on May 30 likely came just short of the company’s highest gross revenue from a single event. The show drew about $6 million total for AEW and its pay-per-view distributors and sold 115,000 buys on all platforms globally, by our estimate.

The record high is probably still held by the previous pay-per-view event, Revolution, which we estimate grossed just under $7 million. That show, on March 7, attracted greater pay-per-view sales but sold fewer tickets with a socially-distanced capacity.

Double or Nothing was held at full capacity at Daily’s Place in Jacksonville, Florida. It sold about 4,700 tickets, generating approximately $300,000, according to the Wrestling Observer Newsletter. At the same venue, just 1,150 tickets were sold for Revolution.

After carriers including FITE, B/R Live, and various cable systems collect the majority of the pay-per-view sales, each of the two events likely netted AEW around $3 million in revenue. 

Full breakdowns of our estimates for both events are at the end of this article.

We’re also raising our estimate of the Revolution event from 125,000 buys to 135,000. The Observer’s recent estimate that Revolution sold 158,000 buys is 10% to 20% high, we were told.

Double or Nothing appears to be AEW’s second-highest-selling pay-per-view in its history. Our estimate of this event and all earlier AEW pay-per-view sales were determined based on information from people with knowledge of the sales.

Merchandise sales estimates of $71,000 for Double or Nothing and $21,000 for Revolution are based on an assumption of $15 and $18 in merchandise revenue per paid attendee, respectively. The average sales per capita for WWE events is about $10, according to public filings. We believe per capita sales for major events like pay-per-views are higher than average and we were told Revolution performed better in this area than most AEW pay-per-views.

Estimated revenue breakdown of AEW’s two most recent PPVs

Dollar values are rounded to the next lowest order of magnitude.

AEW Double or Nothing (5/30/2021)AEW Revolution 2021 (3/7/2021)
Domestic buys: 80,500
x Domestic average price: $50
= Domestic gross revenue: $4,000,000
x AEW average domestic split: 45%
= AEW domestic net PPV revenue: $1,800,000
Domestic buys: 94,500
x Domestic average price: $50
= Domestic gross revenue: $4,700,000
x AEW average domestic split: 45%
= AEW domestic net PPV revenue: $2,100,000
International buys: 34,500
x International average price: $50
= International gross revenue: $1,700,000
x AEW average international split: 45%
= AEW international net PPV revenue: $780,000
International buys: 40,500
x International average price: $50
= International gross revenue $2,000,000
x AEW average international split: 45%
= AEW international net PPV revenue: $910,000
Worldwide buys: 115,000
x Worldwide average price: $50
= Worldwide gross PPV revenue: $5,700,000
x AEW average worldwide split: 45%
= AEW worldwide net PPV revenue: $2,600,000
Worldwide buys: 135,000
x Worldwide average price: $50
= Worldwide gross PPV revenue: $6,700,000
x AEW average worldwide split: 45%
= AEW worldwide net PPV revenue: $3,000,000
Paid attendance: 4,700
Average ticket price: $64
Ticket revenue: $300,000
Paid attendance: 1,150
Average ticket price: $65
Ticket revenue : $75,000
Venue merchandiseVenue merchandise
Revenue per capita: $15
Venue merchandise revenue: $71,000
Revenue per capita: $18
Venue merchandise revenue: $21,000
Total gross revenue: $6,100,000
Total net revenue to AEW: $3,000,000
Total gross revenue: $6,800,000
Total net revenue to AEW: $3,100,000

Note: Net revenue is not a measure of profit. ‘Net revenue’ refers to revenues AEW receives after PPV carriers take their share. An estimate of the profitability of an event would require an estimate of the event’s expenses, which this article doesn’t attempt to do.

Brandon Thurston has written about wrestling business since 2015. He’s also worked as an independent wrestler and trainer.

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AEW Revolution broke the company’s PPV record, grossed $5 million

All Elite Wrestling’s “Revolution” event on Sunday, March 7, set a new pay-per-view record for the company, based on early estimates. The event likely attracted about 125,000 buys worldwide, across both digital and traditional platforms.

Wrestlenomics estimate of All Elite Wrestling pay-per-view buys, worldwide across all platforms, traditional and digital

The event, headlined by an exploding barbed wire deathmatch between Jon Moxley and AEW champion Kenny Omega and closed by a disappointing “time bomb” explosion, generated just over $5 million. The vast majority of that revenue was from pay-per-view sales of the broadcast, but ticket and merchandise sales also contributed.

After splitting revenues with various pay-per-view distributors, AEW will net more than $2 million in revenue.

The event, which probably required under $1 million to produce, was likely quite profitable.

Wrestlenomics estimate of revenues related to AEW Revolution 2021 (3/7/2021)

Retail price for the PPV was $50 in the U.S. and most of Canada, where sales for this event likely doubled compared to other recent shows. As always, the price was lower in international markets, which mostly sell the PPV at $20 USD. Proceeds from PPV sales are split with distributors, who keep the narrow majority of the revenue. The standard split domestically is 45% to the content provider. Splits in international markets are slightly less favorable, generally.

AEW admitted about 1,150 paid attendees at Daily’s Place in Jacksonville, Florida, according to the Wrestling Observer Newsletter. An estimated average ticket price of $65 was used in this estimate based on the advertised ticket price range of $40 to $90.

Merchandise sales per paid attendee performed better than the usual $15, I was told. A rate of $18 in merchandise per paid ticket was used in the table above to come to a venue merchandise estimate of nearly $22,000.

The header image for this article is courtesy of All Elite Wrestling.

Brandon Thurston has written about wrestling business since 2015. He’s also worked as an independent wrestler and trainer.

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Final evaluation of the WWE Network

For anyone in the U.S., Peacock Premium becomes the exclusive home for WWE Network content, beginning April 4. It will be the end of an era of business for Vince McMahon’s company, which seven years ago boldly launched its own streaming service.

So let’s reflect. Did it work out? Is WWE more or less profitable today because of the Network? Is the sale of the domestic rights a sign of failure? Could it have turned out differently? I’ll try to answer those questions here.

There are a few signs the WWE Network was a disappointment, including:

  • The WWE Network, as implemented, has not produced an obvious positive return on the investment, in my estimation. I will explain further in this article.
  • Subscriptions plateaued around 1.6 million by 2019, well short of WWE’s public goal of 3 million.
  • Former co-presidents, George Barrios and Michelle Wilson, the architects of the Network strategy were abruptly terminated in January 2020, at the same time WWE made clear it was interested in selling the rights to the Network content and discarding the direct-to-consumer model.

What we need to know about WWE Network profitability

Figuring out whether WWE is more or less profitable today because of the Network is ultimately hypothetical. To do so, we have to conceive of at least one alternate scenario and compare it to WWE’s actual financial performance during the years in which the Network existed.

It’s important to understand a few points when thinking about the WWE Network, which makes concluding the company made a positive return on this investment more difficult:

  1. The WWE Network cannibalized the pay-per-view business, as many people are aware.
  2. It also cannibalized DVD/Bluray, digital VOD sales, and internet pay-per-view sales.
  3. An issue often overlooked: The timing of the WWE Network launch negatively affected WWE’s TV rights negotiations that were ongoing in early 2014. Vince McMahon confirmed this publicly.
  4. The WWE Network required around $66 million in start-up expenses. These expenses were incurred beginning as early as 2011, according to company public filings, which raises the financial benchmark for a positive return on investment.
  5. But there were benefits too. The Network allowed the company to sell more ad inventory and increased the number of viewers who saw sponsors on monthly peak events.
  6. A vast amount of data was collected since millions of user accounts were created, which allowed for targeted marketing. However WWE’s attempts at selling wrestling fans’ data to third parties was disappointing, I’ve been told.
  7. And you could write a whole other article on the potential opportunity WWE may have had in growing a video streaming business (much like its shuttered WWE 24/7 and Classics On-Demand business) that attempted to monetize the company’s video library but didn’t include live broadcasts of monthly PPV events.

Later on in this article I’ll show the results of my estimates about what WWE’s profitability could’ve been, in an alternate timeline, if the WWE Network was never launched, compared to my estimates of the company’s profitability in our actual timeline. Profitability is here measured as OIBDA (operating income before depreciation and amortization).

This estimate is somewhat further complicated by the fact WWE changed its financial reporting method after 2017, requiring me to do estimates on the actual timeline as well as the hypothetical “alternate” timelines.

To come up with a likely scenario where the WWE Network is a financial winner, I have to imagine a “bear case” alternate timeline in which pay-per-view demand from 2014 to 2020 severely declines.

Alright, let’s try to do the math

Following these graphs are the key assumptions behind them.

For the “actual” timeline, we have actual OIBDA details in the segments shown in the above column graph reported by WWE for the years 2011 to 2017. Because WWE changed its reporting method thereafter, estimates had to be made for the years 2018 to 2020. The key assumptions for those later years were:

  • WWE Network OIBDA margin of ~33%
  • Digital Media OIBDA margin of ~30%
  • Digital Media revenue equivalent to ~67% of media ads & sponsors revenue.
  • Home Entertainment OIBDA margin of ~13%. Revenues less than $2 million, beginning 2019.

For “Base case” alternate timeline, the key assumptions were:

  • Traditional PPV generates ~$44 million in incremental annual OIBDA, 2013 to 2020
  • Internet PPV generates ~$4 million in incremental annual OIBDA, 2014 to 2020.
  • Home Entertainment OIBDA at a rate of ~1.5x of actual timeline, beginning 2015.

For “Bear case” alternate timeline, the key assumptions were:

  • PPV and internet PPV sales and profitability decline over time, consistent with worldwide Google search trends, resulting in $63 million less (-14%) lower OIBDA from pay-per-view.
  • Same Home Entertainment assumption as “Base case”.

Below are revenue and OIBDA estimates tables for the three relevant scenarios: “actual”, “base alternate”, and “bear alternate”.

You’ll notice I didn’t deal with the benefits of ad revenue or the value of user data, mentioned earlier, in these models. WWE’s filings don’t give us much clue on how to calculate those values. I tend to believe those factors’ accretive OIBDA is relatively low on the scale of the calculations made here, but maybe it makes the difference of a few million in OIBDA.

If we accept the “bear case” conclusion that the WWE Network added about $42 million in OIBDA for the company, that would mean the WWE Network meant, at best, a 5% increase in OIBDA over the entire Network era. WWE generated about $915 million in total company OIBDA in the years from 2011 to 2020.

In this generous “bear case”, the Network provides a small incremental increase in profitability, but not the kind of “transformational” change that was hyped at the product’s launch.

So why didn’t things turn out better?

The $9.99 price point was too low, possibly because WWE executives misunderstood the product’s place in media In pricing the Network, WWE placed itself nearer to scripted entertainment pricing than sports. In hindsight, $15 or $20 monthly would’ve been more appropriate.

At the time of the Network’s launch as well as today, sports leagues charge their fans higher prices for access to out-of-market games. That’s especially evident if you average the annual cost only over the months in which the league operates its regular season, as shown in the “Standard price point” chart above. 

Per month of its regular season, MLB charged $18 in 2014. The NFL went as high as $60, and higher today. Yet in its domestic market WWE in 2014 and until it transfers rights to NBCU in 2021, charged subscribers just $10 monthly — more along the lines of the monthly fee for services like Netflix or Hulu.

So why did WWE price its service at $10, more like a scripted entertainment service and less like a sports streaming service?

Since Vince McMahon took control of the company in the 1980s, he’s worked hard to move his wrestling product toward being seen as “show business”, entertainment rather than sport. I think one of the core impediments for WWE growing its consumer revenues is McMahon’s unwillingness to embrace his product for the simulated sport that it is. Usually, that flaw only manifests in onscreen creative. McMahon is normally an effective corporate leader, eager to bet on new media like cable TV, pay-per-view, social media, or streaming. But in this case, his philosophy of imagining WWE “not as sport but as family-oriented sports entertainment” may have been a detriment to corporate strategy, too.

Pay-per-views were sold at a variety of price points for many years and it didn’t seem to have a strong effect on sales. The PPV price of the biggest show of the year, Wrestlemania, nearly doubled in price from 2005 to 2013, gradually increasing from $35 to $60. It’s not clear price increases affected demand.

It’s much more likely, in my view, whatever affected the change in Wrestlemania PPV sales from year-to-year had much more to do with the hype around the matches on the event. It was a good business decision to raise the PPV price on Wrestlemania (and on PPVs generally).

To illustrate a point, if the worldwide monthly WWE Network price was about $20, paid subscribers could have been half of the actual achieved number (about 1.5 million) and generated similar revenue.

1.3 million subscribers at $15 monthly would generate $234 million annual revenue, almost 30% more than the actual performance of the Network in 2020, and edging out the average annual value of the new Peacock deal ($200 million). This hypothetical $234 million, though, is far short of WWE’s original goal of 3 million worldwide subscribers at $10, generating about $360 million in revenue.

In retrospect, as we explored earlier, it’s likely value was lost by essentially underpricing $60 PPVs at $10 for seven years. That lost value can hardly be regained. The Peacock deal (worth an average of about $200 million per year) salvaged the value remaining in PPV events by guaranteeing incremental revenue over a direct-to-consumer subscriber business (generating around $132 million domestically per year) that fell stagnant. Trying to put the genie back in the bottle and revert to a la carte sales of monthly events at a high price point would likely be met with resistance. I think it would present a massive friction point for a significant number of regular customers. WWE and NBCUniversal apparently recognize the old model can’t be reverted to at this point, given the decision to keep monthly PPVs as part of a low monthly fee.

Disenfranchised wrestling fans who would like to see WWE face economic consequences for perceived bad creative, is a sentence this media economy, with its need for live sports, never serves. Better developed stars and creative would’ve helped Network subscriptions, for sure, but the Network disappointed more due to strategy than creative.

The fault of the WWE Network was that executives didn’t recognize that wrestling is maybe the only medium on Earth that so overlaps sports and scripted entertainment. And if you understand that peculiarity, you’ll better understand wrestling price points, DVR viewing, linear viewership, broadcast rights, and probably more.

Final answers

Is WWE more profitable today because of the Network?

It’s a hypothetical question, but the answer isn’t an obvious ‘yes’. The Network as a business was more profitable than the previous pay-per-view business in isolated years, but the Network’s startup costs and cannibalization of other businesses offset much of the financial benefits for the duration of of the service’s run as a mainly direct-to-consumer product.

Is the sale of domestic rights a sign that the Network failed?

It’s a sign that it didn’t work out the way it was expected to. Executives had lofty subscriber goals that the Network fell well short of. By 2020, subscribers didn’t look like they were poised to grow much further. Raising the monthly fee would be risky. Selling rights to the content to a larger media company looking to invest in streaming at a higher scale is likely the better way to grow revenues related to the content.

Could it have turned out differently?

Certainly. In hindsight, I think the Network was obviously underpriced. I think a lower but not-that-much-lower number of subscribers could’ve been captured at $15 or even $20 monthly. Or access to the full library could’ve been part of a higher-priced premium tier. Or the most popular pay-per-views could’ve been left off the service and continued to be sold for $60 while still monetizing the library and other new content via streaming, which might’ve generated greater profitability.

Brandon Thurston has written about wrestling business since 2015. He’s also worked as an independent wrestler and trainer.

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