Is WWE Becoming Stagnant?

My Major Concern Is Around The Per-Show Attendance Trends

While you can monkey with the live gate by changing ticket prices or introducing VIP meet-and-greet packages, your core driver for live event revenue is how many people you can get to come to the show. The average attendance of North American (US/Canada) WWE shows hasn't moved much in four years - it hovers around 6,000 per show. Meanwhile International attendance has steadily decreased. That's very alarming. Five years ago international attendance was well above 8,000/show. Then it dropped to around 7,500/show. Then it spent three years dancing around a little over 6,000/show. And in 2013, WWE's International attendance was actually a hair lower than their US/Canada attendance (5,900 vs 6,000). While one side of the business (North America) stayed relatively flat, the other one (International) dropped year after year (after year). That's a very concerning trend. It's especially concerning when you consider that WWE is actually running less international shows than before. Perhaps you can try to argue that the marketplace was exceptionally hot before and they burned it out, or the economic recession took a bite out of WWE overseas business. But whatever the root cause, it boils down to a clear sign that WWE isn't getting hotter with either the domestic (stagnant) or international populace (falling). The one piece of bright news for the WWE is that while live event trends haven't been encouraging, the revenue generated by live events has been trending upwards. WWE has topped $100M for the last six years. In fact, 2013's combined NA/Int'l live event revenue of $113M was a record high for the company. In addition, the company has shown some encouraging signs of learning by observing the marketplace and adapting. For instance, when WWE realized their top priced tickets were being bought and immediately resold on StubHub at higher prices, they raised their top ticket prices. WWE saw the potential to deliver added value (and extract added money) from fans by offering more VIP and PPV event travel packages. These are smart moves for the company. Ultimately, WWE's revenue is intimately tied to their average attendance. In simple terms, each percentage decrease in attendance correlates proportionally with a drop in overall Live Event revenue. If WWE attendance falls from 6,000/show to 5,800/show, even with improved pricing strategies, WWE revenue for 2015 would be expected to come in about 3% lower. To put it another way, every person that WWE loses off their average attendance is worth almost $20,000 in annual Live Event Revenue. When every fan is worth twenty grand, keeping your average attendance up seems like an exceptionally important goal for WWE. Again, this piece isn't suggesting that WWE is deadset on a path to failure. In fact, they've a chance to change directions. This piece is highlighting fundamental weaknesses in important sectors for the WWE. At the same time, WWE decided to ditch traditional PPV (which was profitable and worth $60M+ in domestic revenue) and increasingly count on future Global WWE Network revenues (an expensive proposition to launch) and new TV Rights fees (which were difficult to negotiate and underdelivered on American expectations). With WWE looking for massive and unprecedented growth through their worldwide WWE Network (projections of 2M to 3M subscribers!) the question remains: can they get there? No one really knows. But one place to start is making sure you're getting the people to your live events. As we continue our search, be on the lookout for the future installments as we examine at WWE's Television Ratings and the new world of PPV for the WWE.