Pro-Wrestling Financial World Page Pro-Wrestling Financial World Page
Last updated 16 September 1999
Quick, name the World Wrestling Federation's champion. We'll give you a hint. He's not Hulk Hogan, Georgous George or Andre the Giant. Okay, here's another hint. He's an ex-University of Tennessee basketball player. The fact that you still can't name Kevin "Diesel" Nash tells you all you need to know about the state of professional wrestling in the U.S. today.
How the mighty have fallen. It was just six years ago that Hulk Hogan and Andre the Giant battled it out for the championship of the WWF. The estimated audience of 33 million, the largest ever to witness a pro wrestling match in the U.S. The problem is that wrestling peaked that night.
Today, Andre is dead, a victim of a heart attack. Hogan, after a hiatus from wrestling, resurfaced last June as the leading performer for the WWF's fiercest rival, Ted Turner's World Championship Wrestling. But at age 41, the 6-foot, 7-inch, 275-pound sometime B-movie actor is slower in the ring and has clearly lost his place on the center stage of American popular culture.
And NBC, which once televised wrestling monthly, hasn't touched it with a 10-foot boom mike since 1991.
What happened to wrestling?
"It has lost a lot of it's excitement, and the kids that make up most of the fans have gone to other outlets," says Jonathan Miller, senior vice president of sports programming for NBC. Even Eric Bischoff, the executive producer of WCW, agrees that boys age five to 20, who make up wrestling's core audience, are finding different things to do.
Wrestling still picks up a respectable slice of the entertainment dollar spent in this country. This odd hybrid of athletics, soap opera and phony competition generates about $320 million a year for it's U.S. based promoters, according to a study done for Turner's WCW last year. That revenue runs the gamut from pay-per-view to sales of T-shirts, toy action figures and other merchandise.
Privately held TitanSports, the company that markets the WWF, gets somewhere between $100 million and $150 million from wrestling, most of it coming from cable television, syndication, pay-per-view and merchandise licensing. (the company won't discuss revenues or profits, except to say that it is making money.)
The second-place WCW produces perhaps $20 million for Turner Broadcasting, according to tstimates. But by most accounts, Turner is losing money on the enterprise, though the programming helps draw viewers to other turner television shows.
Throw in proceeds earned by foreign promoters in countries such as the U.K., Germany and Japan, where fanatics routinely dish out hundreds of dollars for ringside seats, and you're talking about a business in excess of $500 million worldwide.
And that doesn't include the $200 million in revenues for toy companies such as Hasbro and Nintendo who license the WWF brand name for 400 different products.
But the audience numbers in the U.S. clearly show that this parody of sport has been ailing in its home market. Attendance at live events has shrunk dramatically in recent years. In 1981, 13 million people attended about 5,000 professional wrestling matches in the U.S. Last year, fewer than 2 million did.
Wrestling promotions like to argue that the dropoff in gate receipts has much to do with the ascendancy of televised wrestling, which allows people to sit at home instead of making the trip to the nearest civic center. But the problem with that argument is that in recent years the ratings for cable, syndication, and even pay-per-view have also suffered.
According to Nielsen Media Research, the average audience rating for WWF and WCW events was 5.9 and 4.7, respectively, for 1993, down dramatically from 1988, when the average was 9.9 and 6.4. (A 9.9 rating means 9.9% of all U.S. television households viewed the event.) Even pay-per-view hasn't provided much of a boost. The WWF reports that it's revenue from pay-per-view events has been flat over the past five years, averaging about $25 million a year. The WCW's pay-per-view numbers have doubled since Hulk Hogan walked through the door last summer, but it's not clear that this kind of growth can continue. The WCW generated about $13 milliion from pay-per-view last year.
Wrestling may have contributed to it's own decline through overexposure. In most markets, a viewer currently has the opportunity to watch between seven and twelve hours of wrestling a week. Most of it consists of matches involving second-tier talent punctuated by trash-talking "heroes" and "villains" promoting upcoming pay-per-view events. Because wrestling isn't built on the suspense of real competition, it's easy to experience a profound sense of deja vu after watching a few hours of this stuff over a weekend.
Traditionally, when a product suffers declining sales, it is revamped. Not so with wrestling. "Today, the popularity of the WCW is based on the fact that they have Hulk Hogan and other famous older wrestlers such as Randy Savage and Ric Flair, " says David Meltzer, editor of the Wrestling Observer.
"And the WWF's popularity is based on the fact that it's the great WWF, the wrestling enterprise that dominated the 1980s. Both enterprises are living off of past glories."
He's right.
And since things are not changing at home, the best hope for the sport lies overseas. Buoyed by his July acquittal on charges that he dealt steroids to WWF wrestlers, Vince McMahon, the CEO and sole owner of TitanSports, is out to make the WWF the global brand that it's name iiimplies. "As far as global acceptance, wrestling is totally translatable because it's easily understood," says McMahon during an interview at his four-story corporate headquarters in Stamford, Conn. "With wrestling you have well-defined characters in the ring representing good and evil. And there is only one basic rule: Pin your opponents."
Wrestling has a bouple of advantages abroad that it lacks at home: underexposure and it's connection with American culture. "when one of our wrestlers, Lex Lugar, fights, people chant "U-S-A, U-S-A,' in Berlin," says Ausbert De Arce, head of WWF's international marketing. "Nothing is more appealing than being an American product."
Currently, both the WWF and WCW are in the process of establishing an appetite for their products in Europe, Asia and Latin America. Both are following a similar strategy: Start with television to create interest and then follow it up with live events, along with merchandising sales at the events and the possibllity for additional mail order sales.
Currently, the WWf, which generates about 15% of it's total sales abroad, sells programming to Rupert Murdoch's BSkyB and Star TV, two satellite networks with penetration in the U.K. and Asia. The WWf also sells programming to a host of national networks in Germany, Italy, France and Spain. "We are now concentrating efforts on the Far East," De Arce says. the WCW is benefiting from Turner Broadcasting's media outlets abroad to beam it's product into Asian and Latin American living rooms with the help of TNT International. Boasts Bischoff: "Being a division of Turner gives us a foothold in the international marketplace."
But don't count McMahon out. The WWF is still the better-known product abroad. "Whenever anybody has gained on Vince McMahon and the WWF, he has always gone three steps further," says Bill Apter, a long-time wrestling writer. "He has done it a dozen times."
How do you say "body slam" in Croation?
Vince McMahon, the impresario of the World Wrestling Federation, loves to wax eloquent about his favorite topic. "The wrestling business flows through my veins," says McMahon, whose father and grandfather were both wrestling promoters. McMahon's second favorite topic thse days? Archrival Ted Turner and the Georgian's World Championship Wrestling (WCW) outfit. "The only business that has kicked Ted Turner's behind every day of the week is the WWF," says McMahon.
McMahon, 49, who regularly announces wrestling events with the rapid-fire staccato of a Vegematic salesman, starts speaking slowly for emphasis. "Ted hasn't made the first dollar since he has owned the WCW," he says. When asked to describe their respective products, McMahon is equally blunt. "One is ice cream and the other is what is scooped up behind the elephant at the Circus," he responds. Need we ask him to specify which is which?
Not surprisingly, turner's people beg to differ. When asked to respond to McMahon's comments, Eric Bischoff, the executive producer of WCW, fires back: "Sounds like a desperste man in a desperate situation." The rivalry between the two dates back to the mid-1980's, when Turner pushed the WWF off of his cable superstation, WTBS, following a falling out between them. In 1988, Turner bought a failing wrestling enterprise and turned it into McMahon's biggest competitor. It didn't help matters that Turner's WCW has also managed to sign away former WWF stars Randy Savage and Hulk Hogan, whose fight for the WCW championship in August drew the largest audience for any event of WTBS in 1994.
David Meltzer, editor of the Wrestling Observer, says McMahon's bluster may be hiding a case of the jitters. "I sense for the first time that Vince is nervous about the threat posed by the WCW. I think he is afraid of the monster he built--and that monster is Hulk Hogan." While Hogan's comeback may be troubling to McMahon as he tries to rebuild the WWF with a stable of no-name talents, it's clear that Turner's deep corporate pockets are what's really giving McMahon fits. Turner Broadcasting was projected to earn a net profit of $55 million on sales of 2.6 billion in 1994. And Turner, unlike McMahon, has the benefit of owning the means of transmitting his wrestling matches. That is going to put more and more pressure on McMahon to raise the entertainment level of the WWf. Nothing new there. After all, it was the WWF who took a second-tier WCW wrestler named Mean Mark, put a black cape and ghastly makeup on him, and dubbed him the Undertaker, sone of the most popular wrestlers today. In one match, the Undertaker lived up to his name, stuffing an opponent into a casket placed onstage. Now, that's entertainment. The McMahon-turner battle promises to be just as much fun.
If you have any comments, I can be reached via email at Hack-Man@twc-online.com