WWE is the trailblazer for all other wrestling promotions in the world. Even if you’re a wrestling fan who doesn’t follow WWE — due to its overwhelming global presence, the company’s influence on every promotion in the world is undeniable.

If WWE were to permanently vanish from television, it’s questionable whether the hundreds of independent promotions throughout, for example, the United States, would continue to exist for long without the presence of WWE to keep the masses familiar with pro wrestling. Even on the other side of the world, many of New Japan Pro Wrestling’s business practices are inspired by WWE.

The facts about WWE’s business (like so much else in the world) are buried in mind-numbing documents, obscure acronyms, accounting terms, seemingly inextricable business-speak — all of which may or may not be inaccessible by design. And that’s with the benefit of WWE being a publicly-traded company that is required by the Security and Exchanges Commission to make certain public disclosures.

I understand that for some, following WWE business isn’t that interesting. I think at least part of that is due to the inaccessibility just mentioned. So if you find WWE business news difficult to make sense of, but would like to know more, this is for you.

When and why did WWE go public?

The then-named World Wrestling Federation became a publicly-traded company on October 19, 1999. As a result of going public, the WWF’s previous parent, Titan Sports, Inc. (also owned by Vince McMahon), was dissolved.

Upon their initial public offering, the company hoped to raise $172 million.

At the time, the Pro Wrestling Torch speculated that part of the reason the WWF was going public was to get money for outside projects: “such as a Las Vegas hotel, a record label, theme restaurants, and perhaps sports ventures outside of pro wrestling. Vince McMahon showed interest in purchasing the Minnesota Vikings last year [1998] with an Ohio investment group. He may try again to venture into pro sports.”

This sounds a lot like the ill-fated Xtreme Football League and The World/WWF New York restaurant projects that were to come, and the seldom profitable WWE Studios division that exists today.

Who owns WWE today?

Until the company went public, Vince McMahon was the 100% owner. Today he solely owns about 47%. However, almost all the shares owned by Vince, Linda, Stephanie and Shane (class B family stock) hold ten times the voting power of the rest of the shares (class A common stock), so Vince is still firmly in control of his company.

On her own Linda owns 0.75%. Their daughter Stephanie owns 2.51%. According to the last SEC filing on his WWE ownership, their son Shane still owns 2.03% of the company as of December 2013, despite leaving his corporate position with WWE in 2009.

Other corporate officers hold shares, such as George Barrios, Kevin Dunn, Michelle Willson, Paul Levesque and Basil DeVito. WWE’s top executives are often awarded shares as part of their compensation.

Over 25% of the company is owned by the six institutions with the largest stakes.

The remaining 19.5% is owned by nearly 8,000 other parties: numerous institutions; mutual fund companies; and other investors, including regular people like you and me. Because it’s a publicly-traded company, anyone can buy WWE stock through their stockbroker of choice.

Meet WWE’s Corporate Officers!



Vincent K. McMahon

Title: Chairman of the Board of Directors and Chief Executive Officer

2015 compensation: $3,308,998

With WWE since: 1969

Age: 70

If you’re reading this, you know him. Often an on-air personality, Vince has been the promoter and chief decision-maker behind WWE since 1982, when he took over the company from his father, Vincent J. McMahon. He works infamously long days. He hates sleep and sneezing. His favorite western movie is The Searchers. As stated in WWE’s annual report, he heads the creative team that determines everything seen on WWE programming.



George Barrios

Title: Chief Strategy and Financial Officer

2015 compensation: $4,494,878

With WWE since: 2008

Age: 50

If you follow WWE business, Barrios is the person you’ll hear from most often. He does most of the talking on the quarterly and post-WrestleMania conference calls (though you’ll hear some from Vince too). He has a haircut only a corporate executive could afford — or want. During a Q&A session once, he claimed his favorite wrestler was “Ricky the Steamboat Dragon”, and for modern times, “Shawn… uh… Rollins”.



Stephanie McMahon-Levesque

Title: Chief Brand Officer

2015 compensation: $1,738,950

With WWE since: 1998, but worked in smaller roles before then

Age: 39

“Plays a bad guy on TV.” Most notably the mainstream public face of the company today, as WWE tries to establish itself as a benevolent cultural entity. She was heavily involved in WWE’s creative process from 2002 to 2013; her previous title was Executive Vice President of Creative Development and Operations.



Paul Levesque

Title: Executive Vice President of Talent, Live Events & Creative

2015 compensation: $3,112,624

With WWE since: Wrestler since 1995, executive since 2011

Age: 46

Former zillion time world champion and Ric Flair cosplayer; now the leader behind the NXT brand, which has become very popular with WWE’s most ardent fanbase. He signs new talent. He seems to have had a change in philosophy on talent around late 2014, becoming more open to signing and getting behind wrestlers who made their name in independent wrestling or in other countries. As his title suggests, he’s heavily involved in the creative process, though Vince has final say. There have been rumors recently that there’s something of a power struggle between Levesque and Vince.



Michelle Wilson

Title: Chief Revenue & Marketing Officer

2015 compensation: $4,507,801

With WWE since: 2009

Age: 50

Wilson actually worked with the WWE in 2001 when she was the Vice President of Integrated Marketing for the XFL for the year it existed. Before being hired this time by WWE she worked in marketing for the NBA and United States Tennis Association. Her profile on the WWE corporate website says she “oversees all of the company’s revenue lines”. She’s credited with helping the company obtain the “blue-chip” sponsors they’ve made deals with in the TV-PG era, such as General Mills, Frito-Lay and Pepsi. She’s also been instrumental in WWE’s involvement with various charitable organizations like Make-A-Wish and the Susan G. Komen Foundation.



Kevin Dunn

Title: Executive Producer & Chief Global Television Production

2015 compensation: $4,758,170

With WWE since: 1984

Age: 55

His father, Dennis Dunn, held a similar position for the company before him, in the Vince J. McMahon era. Supposedly the elder Dunn risked his life in a car fire, saving videotapes of TV programming that had yet to air, and his son has been promised a job ever since. Last year Kevin Dunn was the highest paid executive in WWE. Allegedly he’s Vince’s biggest ally in valuing good looks in their performers, in pushing for some of the company’s sleaziest storylines and in presenting women in a sexualized and oversimplified manner. Former members of the creative team have been critical of him. According to Dave Meltzer, Stephanie and Paul Levesque don’t regard him as highly as Vince does, and Dunn will be removed from his current position “within seconds,” once Vince is out of power.

How does WWE make money?

In financial documents, WWE separates their business into various segments:

Television

2015 revenue: $231 million (35% of all revenue)

OIBDA (WWE’s profit-like metric of choice): $97 million (42% OIBDA margin)



The largest portion of WWE’s revenue these days comes from television rights fees. These are fees paid to WWE by television stations which get the rights to broadcast WWE’s programming. NBCUniversal (the parent of the USA Network) is their television partner in the U.S., and is almost certainly the largest contributor to WWE’s television revenue; WWE is not required to reveal the details of each individual TV rights deal. WWE also has a number of international television partners that pay for the broadcast rights in other regions, such as Sky (parent of Sky Sports 5) in the United Kingdom and Ireland, and Rogers Media (parent of Sportsnet 360) in Canada, just to name a few.

As long as the market for WWE’s TV rights remains this strong, the company will have a very stable future, where lots of guaranteed money rolls in. Strong TV rights revenue arguably allows them to focus more on strengthening WWE as a brand and less on creating mega stars who can carry live events, become huge individual merchandise sellers and main event PPV/Network draws. Even as TV ratings decline, their ratings aren’t declining at the rate of most U.S. TV programs overall; however, it is declining at a higher rate versus live sports, including UFC.

WWE Network

2015 revenue: $139 million (21% of all revenue)

OIBDA: Estimated $41 million (30% OIBDA margin)



The WWE Network is easily the most talked about part of their business today. That’s due to the excitement over the new media and because the Network is less predictable, whereas TV rights provide guaranteed money negotiated every few years.

In February 2014, WWE launched its over-the-top streaming service. As of the day after WrestleMania 32, the Network had 1,450,000 paid subscribers (plus an additional 370,000 active free trial subscriptions).

The advent of the Network changed their business dramatically, willfully cannibalizing multiple areas of their business: most importantly pay-per-view. The idea was that rather than charging $44.95 for monthly PPVs (or $59.95 for WrestleMania), they could make more money by convincing enough WWE fans to pay $9.99 per month, year-round.

Besides PPV, the OTT service cannibalizes their Home Entertainment (DVD/Bluray) business and completely eliminated their iPPV business (part of the “Digital Media” segment below).

Has the WWE Network been a success as a business move? Not yet overwhelmingly so. Since WWE only reveals certain facts and figures about their business, it’s hard to say what exactly the opportunity cost was of launching the Network. As we’re well underway in the third year of the Network era, the service is still gradually building a subscriber base, so far gaining more each year on average, but peaking around WrestleMania.

With the benefit of hindsight, I think it’s clear WWE would be more profitable today if when they launched the Network they’d offered 9 or 10 of their annual pay-per-views on the service, and left the biggest events (WrestleMania, Royal Rumble and maybe Summerslam) exclusive to pay-per-view for at least the first few years.

Pay-Per-View

2015 revenue: $21 million (3% of all revenue)

OIBDA: Estimated $7 million (34% OIBDA margin)



Somewhat unexpectedly, pay-per-view was still a moneymaker in 2015, generating almost as much revenue as venue merchandise. Even despite WWE PPVs being dropped by the two major U.S. satellite providers, DirecTV and Dish Network, due to the Network undercutting the PPV price, the shows are still available to order through most cable providers.

PPVs are still $44.99 (and $54.99 for WrestleMania), but thousands are still ordering them even though the Network is $9.99 a month. The reasons for this are anyone’s guess. Tech-averse fans and lack of availability of broadband internet service in some areas are probably a factor in most orders.

If 2016Q1 is any indication, though, pay-per-view revenue will be even lower this year.

Live Events

2015 revenue: $125 million (19% of all revenue)

OIBDA: $38 million (30% OIBDA margin)



Ticket sales.

WWE also provides average attendance for each quarter for North American and International markets. They do not reveal attendance for individual events. It is believed the attendance figures reflect the number of tickets actually sold, not including free tickets.

Of course, the exception is WrestleMania. Yes, WWE, a publicly-traded company governed by the SEC, reiterates their exaggerated WrestleMania attendance even to their investors. How do they get away with this? Investors don’t really care about attendance counts as much as they care about how much money the event made: something WWE is required by the SEC to be truthful about.

WWE has reported a 6,000 average per event in North America for each of the last three years. While attendance remains largely unchanged, revenue and OIBDA for the segment have slowly gone up as ticket prices have slowly increased, even when adjusting for inflation.

Licensing

2015 revenue: $49 million (7% of all revenue)

OIBDA: $29 million (59% OIBDA margin)



This segment refers to deals WWE makes with other business, allowing them to use their intellectual property, talent likenesses, etc. Mainly, we’re talking WWE video games and action figures; WWE’s deals with 2K Sports and Mattel, respectively.

Since they’re basically just selling intellectual property and letting their business partner do most of the work, this is the segment with the highest OIBDA margin.

WWEShop

2015 revenue: $27 million (4% of all revenue)

OIBDA: $5.1 million (19% OIBDA margin)



Merchandise sold online through WWEShop.com and other distributors, including Amazon. It’s a relatively small but very healthy area of business for the company.

Venue Merchandise

2015 revenue: $22 million (3% of all revenue)

OIBDA: $8.9 million (40% OIBDA margin)



Merchandise sold strictly at live events.

Digital Media

2015 revenue: $22 million (3% of all revenue)

OIBDA: $4.4 million (20% OIBDA margin)



Mainly this is ad sales on WWE.com and revenue from ad-supported videos on YouTube. This segment used to include their magazines, until that aspect of their business was discontinued.

WWE is among the most popular content on YouTube. View counts are exploding: with more and more views reported each quarter. In 2016Q1, they reported 4 billion video views. Even if views don’t continue to accelerate, that puts them on track to have 16 billion views for the year, twice their total for last year.

Despite massive YouTube viewership, this is a small segment for WWE, which was not even profitable in 2016Q1, as its OIBDA was -$100,000 for the quarter.

Home Entertainment

2015 revenue: $13 million (2% of all revenue)

OIBDA: $4.6 million (34% OIBDA margin)



DVD, Bluray and VOD sales. This segment has been cannibalized by the Network. Why buy a DVD of the recent PPV when you can get access to that and thousands of hours of anything else by subscribing to the Network for $10? Their new release DVDs focusing on a particular wrestler are not uploaded to the Network immediately, though the documentary feature for most of them eventually seem to make their way to the Beyond the Ring section of the service.

DVDs are becoming a cold media. WWE is ahead of the game by launching its own video streaming service. But when we calculate whether the OTT model is more valuable than the old PPV model, we should consider the losses to this segment also.

WWE Studios

2015 revenue: $7.1 million (1% of all revenue)

OIBDA: -$1.5 million (-21% OIBDA margin)



“We make movies!” But they don’t make money.

Despite having lost millions of dollars over the last ten years, for whatever reason, WWE Studios persists.

OIBDA? EBITDA? Net Income? Operating Income?? Profit??? Ahhhhhh!!!

Don’t get bogged down in this. Feel free to Google these terms; maybe you can explain them to me.

Basically, in such a big company there are too many moving parts for there to be one clean profit metric. Rather, there are a number of profit-like metrics. Currently, OIBDA is WWE’s profit-like metric of choice. From 2006 to 2012, they liked to focus more on EBITDA and “Profit Contribution”.

How often does WWE release information?

Quarterly upon the release of their quarterly reports.

Q1 runs from January 1 to March 31. Q2 runs from April 1 to June 30. Q3 runs from July 1 to September 30. Q4 runs from October 1 to December 31.

But reports don’t come out immediately after the quarter ends. The report for the recently-passed quarter comes out about six weeks after the end of the quarter. For example, this year, Q1 ended on March 31 and they released information on May 10.

Since the launch of the WWE Network, the company has also done a conference call on the morning after WrestleMania to give an immediate update on Network subscribers, as that’s the day that total subscribers will likely always peak.

They’ve also given additional conference calls or press releases sporadically whenever they wish. The day after Royal Rumble 2015, the Network reached one million subscribers, so they put out a press release announcing so. Another instance was in May 2014 after WWE signed their TV rights deal with NBC Universal. While the deal was an increase from the previous one, it wasn’t big as many speculated, causing WWE’s stock price to fall sharply. To address concerns, they held a conference call.

What does WWE release?

WWE’s corporate website offers several types of documents, almost all of which are released or updated just a couple hours before they give their quarterly conference call.

The Key Performance Indicators (KPIs) and the Trending Schedules are the two most digestible documents WWE releases, which are put out every quarter. (Until this year the KPIs were updated monthly, but they’ve cut back.)

Less digestible: they also release a 8-K and 10-Q each quarter, and a 10-K at the end of each year.

Key Performance Indicators

The KPIs are a ten-page document showing business metrics that are not financial metrics like revenue and OIBDA. The format of the document was changed greatly this past quarter and now reports the following information:

TV ratings for RAW and SmackDown compared to those of the USA Network and the top 25 cable networks, per quarter.

Views and hours views for ad-supported video on demand, per quarter. Right now, this mostly refers to YouTube, but also some videos on WWE.com and Facebook.

Social Media: followers on platforms like Facebook, Twitter, YouTube and Instagram (which will always increase) and actual engagement (likes, comments, shares, retweets, etc.) on those platforms.

WWE Network subscribers at the end of each quarter and after each WrestleMania.

Average WWE Network subscribers throughout each quarter. This is an important metric because this is the factor needed to calculate how much money the Network actually generates for a given period.

WWE Network growth and churn (cancellations).

Live attendance averages for each quarter, broken down by North America (U.S. and Canada, but not Mexico) and International markets. Attendance in international markets tends to be higher because WWE tours those markets less frequently, so it’s important to separate International from North America. It’s believed these are the number of paid tickets sold, no free tickets included.

Trending Schedules

The Trending Schedules document is now strictly financial metrics. It’s five-page PDF that shows revenue and OIBDA. It compares the latest quarter(s) to those of the previous two calendar years. The revenue and OIBDA numbers are broken down into the various divisions and segments discussed above.

8-K: usually, a quarterly report

An 8-K is a type of SEC form that publicly-traded companies are supposed to use to report important “current events” that are relevant to their investors.

WWE files an 8-K quarterly. It contains the WWE’s press release for the day and guidance for how WWE wants you to interpret the numbers and what to expect in the near future.

For each aspect of their business, there’s at least a paragraph explaining what happened in that part of the business during the quarter.

There are also tables providing similar information to what’s available in the Trending Schedules, as well as some more hardcore financial stats.

Sometimes 8-Ks are used to report other important events, like when Vince McMahon recently sold over 2 million shares of his stock in the company.

10-Q: basically, an even bigger quarterly report

The SEC requires this quarterly from publicly-traded companies. WWE’s 10-Q is more comprehensive than the 8-K.

Besides a lot more complicated financial stuff, it reveals interesting metrics like average ticket prices by region for the quarter, pay-per-view buys (though just the total for the quarter, not for the individual events), a breakdown of total revenues by region (page 13), and it’s the only document that shows TV ratings for Total Divas (page 27).

The 10-Q is also where WWE reveals updates about its on-going legal issues (page 36) such as the class-action concussion lawsuit currently filed against them.

10-K: the annual report



The 10-K is the required annual report that reviews the entire past year. So at the end of each Q4, they’re release a 10-K instead of a 10-Q.

Several weeks after the 10-Q is released, they re-publish it on their website with a fancy, optimistic letter signed by Vince McMahon at the front of it. Annual reports for all years 2004-2015 are kept on the corporate website.

Other stuff

They also publish on the site the earnings presentation that goes with each quarterly conference call and a more general-purpose investor presentation: these are basically PowerPoint slideshows. These give you an idea of how WWE is trying to sell itself to investors and partners. The WWE spin is sometimes pretty high. They still claim there are 159 million WWE fan affinity homes (page 15 of the investor presentation). And they even include the occasional graphs of nothing (page 25).

When WWE first went public, they had to release a prospectus, which reveals some financial data for a few years before they went public in 1999.

Other documents they file with the SEC include the proxy (which reveals corporate officers’ salaries among other interesting bits), and Form 4s and Schedule 13Ds reporting ownership changes among insiders and prominent owners.

Conference calls

At 11:00AM ET on the morning of an earning release, WWE will hold a conference call that can be listened to live (or after the fact) on their corporate website. George Barrios and Vince McMahon are on the call, I imagine sitting at a long shiny desk at the corporate offices in Stamford. Barrios and McMahon will give some prepared statements, usually consisting of reading verbatim from their newly-released documents. After about fifteen minutes of that, the most interesting part begins: they take questions from analysts who are on the call.

The analysts represent firms that advise others whether to invest, or they represent firms that actually invest in WWE. They often ask interesting questions, which are mostly fielded by Barrios who will do anything from give an insightful answer to refuse to go into any detail.

Barrios will also give occasional talks at various conferences which also can be listened to live on the corporate website. Similar to the conference call, he’ll give a sales pitch while going through one of the presentation documents, then take a Q&A. Again he can tend to be evasive.

Chris Harrington once commented on Barrios’ performance in Q&A sessions:

Actually, in [Q&A sessions], I think Barrios is trying to run out the clock… He wants to craft a message (WWE Network has 159M potential homes!) and get out of there without being grilled… WWE isn’t going to these conferences because it’s journalism – they go because it’s PR and they’re trying to control the conversation. Still, there’s elements (especially when they do open mics) where you can actually get some good gems from even someone as granularity-avoiding as Barrios.

What does WWE not release?

Just because WWE is a publicly-traded company, that doesn’t mean they have to reveal every detail of their business. As anyone who’s ever listened to a WWE conference call knows, the Q&A session is often highlighted by Barrios being evasive in response to analysts’ questions, or outright refusing to give any answer at all. A lot interesting facts they keep to themselves. Here are just a few of what I think are the most interesting metrics WWE does not reveal:

Merchandise sales for individual talent. The vast majority of merchandise is wrestler-specific. Knowing who’s driving the most merchandise would give us an idea of which stars are gaining traction with the fan base. You can go on WWEShop.com and sort items by “Best Selling”, which produces results which are interesting but by no means give you an idea of which stars are driving the most merchandise revenue. When it comes to “Who was a draw?” arguments among hardcore fans and historians, this would be probably the strongest evidence we could show to prove so-and-so was a draw. All other metrics (like PPV buys, Network subscriptions, live event attendance, ratings) are much more collective efforts.

The vast majority of merchandise is wrestler-specific. Knowing who’s driving the most merchandise would give us an idea of which stars are gaining traction with the fan base. You can go on WWEShop.com and sort items by “Best Selling”, which produces results which are interesting but by no means give you an idea of which stars are driving the most merchandise revenue. When it comes to “Who was a draw?” arguments among hardcore fans and historians, this would be probably the strongest evidence we could show to prove so-and-so was a draw. All other metrics (like PPV buys, Network subscriptions, live event attendance, ratings) are much more collective efforts. Viewership for specific programming on the WWE Network. We don’t have any good insight into how many people actually watch any given content on the Network. We’re told that live content like the PPVs perform best, unsurprisingly. We have no idea how many viewers actually watch NXT weekly or any of the Takeover specials, whether on their first airing on the live stream or on VOD. This is surely the kind of data that WWE itself collects and studies closely, but is unknown to the public. The closest thing we have to any insight is the Network’s “Most Popular” section, which may or may not actually reflect the most highly-viewed content over the previous week. Steve Coulson of WWE Network News has covered this.

We don’t have any good insight into how many people actually watch any given content on the Network. We’re told that live content like the PPVs perform best, unsurprisingly. We have no idea how many viewers actually watch NXT weekly or any of the Takeover specials, whether on their first airing on the live stream or on VOD. This is surely the kind of data that WWE itself collects and studies closely, but is unknown to the public. The closest thing we have to any insight is the Network’s “Most Popular” section, which may or may not actually reflect the most highly-viewed content over the previous week. Steve Coulson of WWE Network News has covered this. Quarter-hour or minute-by-minute viewership for WWE programming. This would give us greater insight into whose segments are a success, and which segments are turning off viewers. I believe WWE gets data like this from Nielsen. Dave Meltzer used to report quarter-hour viewership in the Wrestling Observer Newsletter several years ago, but apparently no longer has access.

This would give us greater insight into whose segments are a success, and which segments are turning off viewers. I believe WWE gets data like this from Nielsen. Dave Meltzer used to report quarter-hour viewership in the Wrestling Observer Newsletter several years ago, but apparently no longer has access. Specifics about their agreement with NBCUniversal. We know revenue and OIBDA figures for each quarter for the entire Television segment, but that segment includes deals with all their TV partners all over the world. NBCUniversal is surely the partner contributing the most money, but WWE won’t say publicly exactly what the terms of the deal are; it’s believed the deal is worth about $150 million annually. Likewise we don’t know just when the deal expires, though it’s believed to expire sometime around 2018.

Data available outside of WWE’s corporate reporting

Who covers WWE business?

Since it’s business and especially since WWE is publicly-traded, mainstream news outlets often cover important stories about the company. Analyst sites like BTIG and PAA Research cover the company behind a paywall. In particular these are some people to follow: