Views From The Turnbuckle: Is The WWE Network Era About To Come To An End?

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Wrapping up what has been a tumultuous week for WWE's corporate outlook, Vince McMahon revealed that WWE is considering radical changes to the WWE Network and how WWE distributes special events.

During the annual year in review earnings call with WWE investors, McMahon mentioned that changes in the WWE Network could be on the horizon, and that the company was considering selling the Network's "major events" to another major streaming service.

McMahon's actual words during the interview were:

"We could exercise the selling of our rights to all the major [streaming services] to increase revenue. We have a lot of options. We could continue on as we are now, with an enhancement of a tier? we also have an option right now, there's no more better time to exercise the selling of our rights to all the majors who, quite frankly, all the majors are really clamoring for our content."

So what McMahon is basically saying is that the company could make more money having their major events (so basically all PPV events) sold on another streaming service, such as DAZN or ESPN+, than they could be using them to entice fans to subscribe to the WWE Network. Obviously, that would have a huge impact on the Network, since the main driver of the Network has been WWE PPVs and if those are taken off of the Network, fans would be less inclined to keep their network subscriptions.

This would be similar to how UFC operates. UFC has the Fight Pass streaming service, which offers archived shows, some original content, and live smaller shows, while the bigger, official UFC shows, are available for purchase on ESPN+. If financially feasible, the Network would remain as an archive for WWE content, as well as some of the original programming and perhaps for TakeOver events.

How close is this really to happening? Would WWE really trade in the Network, something the company has pushed relentlessly for almost a decade, for a deal with another streaming service? Perhaps this was just something McMahon mentioned in the earnings call as a possibility, something to dangle in front of unhappy investors who see the product's popularity declining despite record revenue.

McMahon mentioned that a deal could be made by the end of the first quarter, which would be the end of March. That would imply that WWE has been working on this for quite a while since a complicated deal like this isn't something WWE could put together quickly. Perhaps again, that was just something that McMahon mentioned as a possibility to try and placate investors.

However, there is some smoke to this. For starters, the explanation for Michelle Wilson and George Barrios suddenly getting fired was that there were differences in opinion for the proper direction of the company. Barrios and Wilson were both instrumental in the creation of the WWE Network, so it is plausible that they would have been unhappy with a plan that would torpedo the Network.

There is also the reality that WWE would be making more money off of their special live events if they were under the old PPV model, or presumably a similar model with a streaming service. Brandon Thurston of the Wrestlenomics Podcast did a report at the end of last year comparing WWE's revenue from the Network to the theoretical revenue they would have generated if the events were instead sold on PPV at $60. The answer is that the company would have made more money selling the more expensive PPVs than what they were making from Network subscribers.

Logically this seems like a sound move for WWE. The company has not been able to make new fans, but the fans who are around are willing to spend a lot of money on the product. By selling the events for $9.99, they are probably undercharging what most fans would be willing to pay. Particularly for major events like WrestleMania, the company would make a lot more money off of the old PPV model than by getting Network subscriptions. Sure, you might price out some fans with an expensive PPV, but the hardcore fans would be willing to pay for it, and unfortunetly those are really the only fans WWE has left.

Where would the WWE PPVs go? DAZN and ESPN+ are the rulers of streaming live sports and would be the obvious front-runners, having already established themselves as the home for premium boxing and UFC events respectively. Another candidate could be Peacock, NBC's streaming service set to launch in April. NBC is already WWE's biggest television partner, and WWE's fanbase would be an attractive audience for a streaming service entering a bloated marketplace.

WWE also may be looking to make a deal in order to show that the company is still progressing and finding new streams of revenue. The company can't build new fans, but if they can get those remaining fans to pay more, that may satisfy some nervous investors. WWE can't turn around their house show attendance, merchandise sales or Network subscription trends, but if they squeeze some more revenue out of their PPV events, that would at least show investors that the company does have some capacity to make more money.

So how would this all affect WWE fans? What impact would this have on the product? As a fan, I find this development very intriguing. Since the creation of the WWE Network and the death of WWE on traditional PPV, the company has been able to coast off of lackluster builds and main events for a lot of their PPV shows, especially the "B" shows. Since most subscribers to the Network had been subscribers for years, WWE was able to put out lackluster shows devoid of any interesting matches. As long as once and a while the company produced a truly engaging show, most fans would remain subscribed to the Network.

If WWE were to sign a big deal with a company like ESPN+, and fans would go back to having to purchase each PPV, it would force WWE to have to put some more effort into each of their shows. They couldn't roll out a show with a crappy main event that nobody wanted to see because nobody would end up buying that show, and it would reflect poorly on their deal with the major streaming service.

This would also force WWE to actually find out what their fans are really interested in. Would the company have pushed Roman Reigns relentlessly for as long as they did if they were counting on interest in his matches to sell a PPV each month? History tells us that a lukewarm babyface on top doesn't last long, because they hurt business. We certainly wouldn't have gotten something like the Jinder Mahal experiment because nobody would have bought PPVs headlined by a job guy who was suddenly elevated to the main event.

From an analysts perspective, it will give us a much greater understanding over what wrestlers draw and which wrestlers did not. If the PPV purchase number is high, it tells us that the angle and the wrestlers involved worked, and if the purchase numbers is bad, it tells us that the angle and the wrestlers involved did not work.

One of the annoying things about the Roman Reigns era has been that it was hard to tell if his run on top had any real effect on business because we didn't get critical info such as PPV buys. We could point to things like declining live attendance and merchandise sales, but those are indicative of a company-wide problem and not just because Reigns was in the main event that night. With PPV buys, it will give us a better understanding of how these individual stars are doing as legitimate draws in the industry.

Once again, things might not be changing at all and WWE may still present its major events on the Network the same as always. However, WWE deciding to partner with a major streaming service would certainly change how fans consume the product and how much money they will be asked to spend to watch WWE, as well as increase the importance of angles and having credible main event draws to headline shows.

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