Wrestlenomics’ Brandon Thurston returned to The Wrestling Inc. Daily to chat with Wrestling Inc. President Raj Giri about WWE’s 2020 as well as give his outlook on WWE’s viewership in the future. WWE reported record profits in 2020, and Thurston explained how that helps everyone understand how the wrestling business has changed over the years.

“Well, I think it’s a year that really highlights, and if you look into it a little bit, you really understand how the wrestling business has changed from, at least like decades ago, being heavily reliant on ticket sales and on running live events. And since the middle of March 2020, there were no live events,” Thurston pointed out. “There were no tickets sold, but yet WWE, as you mentioned, it’s going to have its most in the years over. It’s had its most profitable year ever in all likelihood. I think the first three quarters alone were its most profitable year ever.

“So unless they report some negative number for Q4, they’ve already made it, but I don’t think they’re going to report a negative number. I think there are going to report even more net income and even more operating income. And that’s all because of how the business has benefited by the change in the media landscape, the change in the economy particularly from cable where cable, as fewer and fewer homes subscribe to cable, that has caused the cable networks to rely on and increasingly value the top rated programs.

“So they really have to keep those programs on their networks, otherwise people are going to be more likely to just cancel their cable subscription, especially the programs are that are top rated and those that are watched live because that, for one thing, makes the programs more DVR proof. And so we’re thinking about things like sports. News has done amazingly well too in 2020 for reasons you can probably imagine, but the network’s rely heavily on their top programs more than ever, and that’s probably going to be the case going into the future, at least the next few years I think.”

WWE will be entering their second year in their TV deal with FOX. Thurston explained how that deal will only help increase revenue even more each year.

“So WWE, for one, has gotten more TV rights fees,” Thurston noted. “They, in 2018, finished a deal with NBC Universal and another deal with FOX that resulted in more than tripling their their last deal. These are five-year deals for WWE. So it’s a business that’s really been turned on its head decades ago when I was growing up watching WWF Superstars on my local FOX network. That was a paid program.

“That was essentially an infomercial that WWF had to pay for to get that slot and similar, I think, around the country. And now, they’re not paying for TV. The TV networks are paying them, and that’s driving the majority of their revenue this year. And that would have been the case, I think, even without COVID. It would have been close in terms of revenue, but next year, that’s just the nature of these contracts is that every year, they get increased it seems by about 10%.

“So they’re now on their second year as of October. So they’re probably getting a 10% increase vs. what they got for the first 12 months of the deal. That’s only going to increase over time. It’s going to make up a little bit more of a majority of their revenue each year, and who knows what the future will be, the future of media, but there’s no end to in sight.”

While WWE’s declining viewership has been a major story in 2020, Thurston pointed out that all TV viewership is down in general. He noted that, excluding cable, the top 50 programs in 2020 were down 24% in the key 18-49 demo, and RAW was down 29% when not including news.

“It’s easiest for me, based on the data that I have, to look at P18-49. I can look at the total audience, P2+ also, but it’s a little bit more complicated because I’m getting the data from Showbuzzdaily.com, and they’re always ranking everything by P18-49 because that’s what advertisers care about,” Thurston explained. “Top 50 programs in 2020 were down, this is excluding cable, 24% in P18-49, and RAW was down 29%. So RAW doing five percentage points worse, than non-news cable. Include news cable and everybody’s off. If you just do news alone, it’s up 20 or 30% or something like that.”

SmackDown recently recorded their best viewership in quite some time on Christmas, and Thurston noted that SmackDown typically is one of the more watched programs in the key demo. He also noted that FOX is more reliant on advertising revenue than other cable companies.

“At least on their night, they’re usually the most watched program in the key demo, not in the total audience,” Thurston said. “Just in the key demo because there’s a lot of other network programming… I think the history in Nielsen is that broadcast, big network programming would always do the bigger number. So maybe you only need one decimal place, but now, viewership has gotten so small that it’s better to have two decimal places, and that’s what they do do for cable.

“In the key demo, which is what drives advertising, and when I looked at recently FOX’s SEC filings, it looks like FOX relies on advertising revenue more so than the cable networks do. Advertising revenues make up a majority of FOX’s, of broadcast FOX’s revenue, whereas for cable networks, cable companies like NBC Universal, Warner Media Turner, the majority of their revenue comes from affiliate fees.”

When asked how safe WWE is with the declining ratings mixed with the record recorded revenue, Thurston pointed out that WWE is still a global brand in possession of IP that will take AEW and other wrestling companies time to build. However, he agreed with Giri that there is no confidence that the creative direction will get better and talked about how AEW Dynamite beat RAW in the key demo for a week and how that could happen more in 2021.

“WWE is a huge brand. It’s got all this legacy IP, which you can see on the Network,” Thurston stated. “It’s got all these characters and trademarks that it owns, and it’s got massive global name ID. It’s going to take a long time to say the least for AEW or any other wrestling brand to come close to that, but I think that the trajectory that we’re on, and if Vince McMahon lives for a long time and stays healthy for a long time and continues to control creative, I don’t know how long the timeline has to be.

“But on a long enough timeline, I think WWE being the leader, at least those flagship brand, that can’t last forever, and I have no confidence that Vince is going to get better, that he’s going to start learning how to create stars again. I just think on a long enough timeline, and it’s probably sometime after 2023 when new TV deals get done, I don’t think RAW and SmackDown are going to be the leader in P18-49 viewership at least. We’re seeing 18 to 34, the lower half of that demographic, get really close between Dynamite and RAW.

“In fact, there was one week in December where Dynamite exceeded RAW. This is the week where RAW had its lowest rating ever, and Dynamite had the the follow-up to ‘Winter Is Coming’ and the interview with Sting. And it beat RAW in 18 to 34, and I think we’re going to see that happen quite a few times in 2021. AEW has decisively beaten NXT. NXT continues to lead AEW though with people over the age of 50.

Thurston discussed more about how WWE has a large amount of viewers in the 50+ demo. He admitted that he does not watch the product much nowadays and is more interested in the story around the business, but he did ponder why people watch the product and what makes people keep watching every week.

“So when I pause there and say well at least 18-49, its because WWE has this enormous bank of people over the age of 50 that watch their program,” Thurston pointed out. “Now, these are the people who just tend to watch TV more, and I think there’s plenty of younger people who are following wrestling in one way or another digitally, but they have an enormous P50 audience that AEW doesn’t have as much.

“Over time, I think the way that Vince books the product — I don’t want it that much. I put the PPVs on in the background, and I’ll watch AEW sometimes, but it seems like a product that just doesn’t make people care about it. And I just have to stop and think sometimes like, ‘Who’s watching this?’ I want to have focus groups and talk to random people who watched WWE be like, ‘What are you watching it for? What do you like about it?’ Are there so many people, maybe like us, who are following it for one reason or another.

“You’ve got a podcast, or you’ve got a community of people that they talk about it with. I think there’s a lot of sort of meta watching, and that’s certainly where I am where the story of the business is vastly more interesting to me than any intentional story that they tell.”

Brandon’s full chat aired as part of a recent episode of our podcast, The Wrestling Inc. Daily. Subscribe to get the latest episodes as soon as it’s released Monday – Friday afternoon by clicking here. You can listen to today’s episode, featuring newly engaged pro wrestling couple Teal Piper and Deimos, via the embedded podcast player below: