Is WWE Becoming Stagnant?

Attendance Trends

When WCW began to tumble, you could see it in their house show attendance. It rapidly shrunk in the latter half of 1999. Yet, it wasn't until 2000 that WCW's falling TV ratings or plummeting PPV buyrates caught up. At that point it was painfully clear how quickly the company was deteriorating. And by then, it was also verging on being too late. Likewise, before WWF was pulled out of their mid-90s slump and experienced booming Attitude Era Pay-Per-View buys (catching up and then trouncing WCW in the Monday Night Wars), WWF attendance began significantly improving in late 1997 and early 1998. The point is simple: Attendance can be an excellent preceding indicator of future company health. So, looking back at the past eight years, we'll focus on three elements of attendance: Number of shows run (both in North America and Internationally) Average attendance at shows (again both in North American and Internationally) Overall revenue generated by Live Events. Domestically, on a rolling 12-month basis ending March 31, WWE has run between 236 and 259 live events in North America in the past eight years. On average, it's about 251 shows per year run in the United States and Canada. That includes all of the televisions tapings, Pay-Per-View events and the untelevised live events (formerly known as "house shows"). It seems likely that this number ought to stay around 250 NA Shows per year for the next 24 months. It's tough to ramp up. You've got the basic constraint that each tour needs sufficient star power to headline the events. However, WWE only has one world championship and they've unified their television rosters. There's a real sense that WWE is struggling to maintain a enough top-level heels & faces to have real house show draws. (For more on this, refer to my April 2014's analysis of drawing power of John Cena vs Daniel Bryan on the live Event circuit.) Internationally, on a rolling 12-month basis ending March 31, WWE has run between 61 and 80 live events outside of the US and Canada over the past eight years. Recently, the number of shows has seriously decreased (which is distressing). In the past 24 months, international live events have averaged was hovering around 65 shows/year. Compare that with the the five years prior to that where the average number of non-NA shows was 76 shows/year. This 15% drop in shows is significant because historically international shows drew larger crowds and generated higher average revenues.Typically WWE has two big international quarters: Q2 and Q4. To affect 2014's books, WWE's only opportunity to gear up for a large international increase would have to come right at the end of this year. There's always some complexity with accounting for international shows. Tours in different parts of the world (Asia vs Mexico, Europe vs Australia) have drawn very differently. Exchange rates can impair (or improve) tour receipts. In some cases WWE has partnered with local promoters and offered "sold shows", particularly in the Middle East, where the company is paid a flat fee to come in and perform. (It's unclear whether we'll see more of these "flat fee" events in future years but they always remains an option in the WWE playbook should they want to reduce the uncertainty and cost associated with touring some foreign territories.) In general, the company seems to have settled into a pattern of running about 320 annual shows. Without a dramatic change in the size of roster or significant time and investment to create competing touring brands (perhaps in the form of returning to a brand split or, more dramatically, starting a new rival promotion), it seems unlikely that the number of shows WWE runs annually could be much larger any time soon. While new television deals can infect foreign countries with WWE-fever and provide fertile new touring grounds, right now that seems like an unlikely outcome. The big new international television deals for WWE were: In the UK (where WWE has been touring for more than two decades) Thailand (which is really being included in the WWE press releases because the deal represented a huge multiple over a small base) India (where the TV deal is technically not even yet signed and where there is an intense media rights battle which is somewhat divorced from the profitability of actually executing live tours). With a limit on the number of existing arenas for WWE to run in lucrative areas (such as Western Europe), WWE doesn't seem like they will be able to easily ratchet up the number of international tour dates far beyond about eighty per year. (Though theoretically it's possible for WWE to mount a larger tour of a country like Germany since they a large number of venues in that country.) Furthermore, WWE has grown more wary about pre-taping several weeks of television shows which is a necessary cost-wise step if they're about to go on the road for a long stretch. The alternative of expensive live international broadcasts of Raw or Smackdown remain less likely outside the annual foray into the UK. Ironically, during the height of the Attitude era, when WWF was averaging over 10,000 people per show and selling out regularly, they were only running a little over two hundred shows per year. That's why, on the whole, WWE's live events division makes far more today than they did in at the modern wrestling's popularity peak. They make more than $30M more in Live Events because WWE is running nearly 1.5x as many shows. This pales in comparison to the late 80s where McMahon's company was running up to a thousand WWF shows annually. Still, they used an expanded roster (about sixty wrestlers had 5+ matches in the late 80s compared to only about forty in the Attitude Era and fifty today) coupled with insane travel schedules and plenty of pre-taped television. (And, copious amounts of steroids, drug & alcohol.) Everything was built around the allure of seeing these television stars actually wrestle in your hometown. It was a different age. Click "next" below for part 3...