Thursday, September 03, 2015

Wrestling Observer Hall of Fame 2008-2014 Voting Wrestlenomics

I've been going through the Wrestling Observer Newsletter archives and looking at the WON HOF performance over the last seven years:

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To keep people's results grouped together, I've included everyone in the most recent category in which they were categorized. That means, people who began in Modern and moved in Historical would appear to Historical. Likewise, the catch-all category ("AUSTRALIA/PACIFIC ISLANDS/CARIBBEAN/AFRICA") was only introduced in recent years though some of these candidates have been on the ballots for much, much longer. Keep in mind that the overall number of voters in each category has shifted each year. In addition, the percentage of votes required for being inducted is a function of number of voters for the group of which each performer is part of. Induction is 60% or higher. Wrestlers with less than 10% are dropped from the ballot.

WON Source (subscription required)
2008: 9/8/2008 issue
2009: 9/28/2009 issue
2010: 9/27/2010 issue
2011: 10/24/2011 issue
2012: 11/12/2012 issue
2013: 11/6/2013 issue
2014: 11/24/2014 issue

Some notes for 2015 ballot:

Added to the ballot in 2015:
  • CIMA - first year
  • Bryan Danielson - first year
  • Cowboy Bob Ellis - was dropped from the ballot in 2010 after receiving less than 10% of the vote
  • Bob Geigel
  • Samoa Joe - first year
  • Rocky Johnson - was dropped from the ballot in 2009 after receiving less than 10% of the vote
  • Shinsuke Nakamura - first year
  • Randy Orton - first year
  • Eddie Quinn - first year
  • A.J. Styles - was dropped from the ballot in 2013 after receiving less than 10% of the vote
Will be dropped after next year if not inducted or 50%:
  • Cien Caras - 18 votes in 2010 (24%), 37 votes in 2011 (31%), 32 votes in 2012 (42%), 41 votes in 2013 (45%), 53 votes in 2014 (54%)
  • Carlos Colon - 39% of votes in 2007, 116 votes in 2008 (47%), 80 votes in 2009 (40%), 62 votes in 2010 (34%), 61 votes in 2011 (55%), 61 votes in 2012 (59%), 85 votes in 2013 (59%), 76 votes in 2014 (56%)
  • Villano III - 54% of votes in 2007, 50 votes in 2008 (40%), 23 votes in 2009 (31%), 23 votes in 2010 (31%), 55 votes in 2011 (47%), 38 votes in 2012 (49%), 38 votes in 2013 (41%), 32 votes in 2014 (33%)
  • Volk Han - 28% of votes in 2007, 38 votes in 2008 (45%), 38 votes in 2009 (39%), 25 votes in 2010 (22%), 55 votes in 2011 (47%), 41 votes in 2012 (42%), 44 votes in 2013 (42%), 52 votes in 2014 (51%)
Looking at the trends (which obviously can be quite misleading), it would seem that we'd see strong results for:
  • Gene & Ole Anderson - grown from less than 25% in 2008/2009 to mid-50% in 2011-2013 and finished at 49% last year
  • Cien Caras - grown from 24% to 54% which higher percentage every year. This is also a "make or break" year for Caras.
  • Karloff Lagarde - grown from 19% in 2008 to 52% in 2013. Last year was at 48%.
  • Brock Lesnar - 24% in 2012 immediately grew to 47% in 2013. Last year nearly made it in at 56% and continues to be a major player in WWE.
  • Carlos Colon - Been consistently above 40% with a single exception in 2010. Bounced back from that. Another candidate who is in a "make or break" situation.
On the flip side, candidates whose support has been eroding in recent years:
  • Dick Hutton - started at 28% in 2011 but has been below 20% ever since. Last year was 13%.
  • June Byers - started at 25% in 2012 but has been dropping each year. Last year was 14%.
  • Kinji Shibuya - started at 50% in 2010 (following his death in May) but support fell to 27% the following year and has been at 14-15% in recent years.
  • Pepper Gomez - his iron stomach has held up stronger than his votes; dropped from 26% to 24% to 16% down to 10% last year.
  • Von Brauners/Weingeroff - first year at 22% in 2010 but slipped into the 12-19% in following years and last year was down to 10%.
  • Hector Garza - fell off the ballot in 2008 and returned to the ballot in 2013 after his death. Initial support was at 32% but that cut in half (similar trend to Shibuya) to 15% last year.
  • Brute Bernard & Skull Murphy - only 12% support last year and with likelyhood at Colon voters will flood the ballot, seems less likely the team will rebound.
  • Domenic DeNucci - after a brisk start at 47% in 2012 and respectable follow-up at 37% in 2013, stuck in the "catch-all" category, DeNucci dropped to 21% last year. Still living so perhaps his numbers will rebound after his passing and there is a larger reconciliation of his entire career.
  • Johnny Barend - also in the moutful "AUSTRALIA/PACIFIC ISLANDS/CARIBBEAN/AFRICA" category, Barend began at 25% in 2012 but has dropped to the dangerous drop-off point of 10% in last year's balloting.
  • Mario Milano - yet another candidate teetering on the edge, with 28% in 2012, his stock fell in recent years ending at only 11% in 2014.
Personally, I believe that Sting's stock is likely to go up (was at 33% - could see bump into mid-40s due to his prominent role in WWE at two PPVs), voters will be FAR less likely to support Jimmy Snuka (who was already waning at 19% last year) and I still can't believe that Junkyard Dog only had 16% support last year (seems far too low).

Wrestlers who died in 2014 might see their votes decrease after their initial bump - that would include Ultimate Warrior (20%) and George Scott (19%). I'll be curious how Perro Aguayo Jr. does - he dropped off the ballot in 2012 after initially coming in at 25% in 2010 and dropping to 15% in 2011. I wouldn't be surprised if re-debuted at a strong 35%-40% range.

-Chris Harrington

Wednesday, August 12, 2015

Hypothetical financials of WrestleMania 32 as a PPV-exclusive

As Dave Meltzer wrote in the August 10, 2015 Wrestling Observer newsletter: (subscription required)
"In case there were any questions, next year's WrestleMania is going to be on the network. They could make more money with it as a PPV exclusive but the bad blood they'd get from the customer base would be a disaster because the feeling is they've promised all PPVs going forward, including Mania, on the network. The production trucks got their WrestleMania 32 promo skins and it was pushed prominently as being live on the network."
I wanted to get at was big of a difference would WrestleMania 32 make for WWE's profits if they had decided to change course and only put WM32 on pay-per-view (exclusive or hypothetically offered it ala cart via the WWE Network for $30+).

I'll do my best to cite all of my sources since there's a lot of misinformation out there on the web and want to thoroughly document my assumptions. My primary source is WWE's own financial filings, particularly when WrestleMania moves a quarter because they do a pro-forma which explains the impact and it's easy to isolate the WrestleMania PPV revenue number.

Pay-per-view Revenue from WrestleMania as recorded by WWE in that quarter
WM2007: $24.6M PPV revenue (source: 5/8/08 10-Q) - 1,250k worldwide buys / 825k North American Buys ($49.95 domestic PPV price, see 4/6/09 WON)
WM2008: $23.8M PPV revenue (source: 5/8/08 10-Q) - 1,041k worldwide buys / 697k North American Buys ($54.95 domestic PPV price, see 2/23/11 WON)
WM2009: $21.0M PPV revenue (source: 8/9/10 10-Q) - 975k worldwide buys / 605k North American Buys ($54.95 domestic PPV price, see 3/5/12 WON)
WM2010: $19.0M PPV revenue (source: 8/5/11 10-Q) - 885k worldwide buys / 495k North American Buys ($54.95 domestic PPV price, see 3/19/13 WON)
WM2011: $24.2M PPV revenue (source: 8/5/11 10-Q) - 1,124k worldwide buys / 679k North American Buys ($54.95 domestic PPV price, see 3/3/14 WON)
WM2012: $27.85M PPV revenue (approximated based on the information in 8/7/12 10-Q) - 1,219k worldwide buys / 715k North American Buys ($54.95 PPV price, see 8/11/14 WON)
WM2013: $27.0M PPV revenue (approximated based on the information in 8/1/13 8-K) - 1,104k worldwide buys / 662k North American Buys ($59.95 PPV price + HD upgrades, see 5/11/15 WON)
WM2014: $17.8M PPV revenue (source: 7/30/15 8-K) - 684k worldwide PPV buys / 420k North American PPV Buys ($59.95 PPV price + HD upgrades, see 5/11/15 WON)
WM2015: $4.9M PPV revenue (source: 4/30/15 8-K) - 259k worldwide PPV buys / 104k North American Buys ($59.95 PPV price + HD upgrades, see 2/23/15 WON)

All of these PPV revenue numbers (except 2012 & 2013) come directly from SEC documents that WWE filed where the company provided a specific pay-per-view revenue number for the WrestleMania event. It's important to note that this only includes the revenue which WWE recorded in that quarter which is usually a little lower than the final numbers (which is what Dave is reporting). Buys that were reported later show up as "prior period buys" in the subsequent quarters so there usually a trailing PPV revenue impact on the following quarter.

Let's look at the Network division (WWE Network + PPV + Video-on-demand) revenue/OIBDA for the past ten quarters:

Latest WWE Trending Schedule
Total Network Revenue/OIBDA in the Media Division

2013 Q1: $16.0M ($15.1M in PPV + $0.9M in VOD) / $5.0M in OIBDA
2013 Q2: $38.2M ($37.0M in PPV + $1.2M in VOD) / $8.2M in OIBDA
2013 Q3: $15.5M ($15.5M in PPV + $1.0M in VOD) / $7.4M in OIBDA
2013 Q4: $16.6M ($15.7M in PPV + $0.9M in VOD) / $7.3M in OIBDA
FY 2013: $86.3M ($82.5M in PPV + $3.8M in VOD) / $27.9M in OIBDA

2014 Q1: $18.4M ($13.8M in PPV + $0.2M in VOD + $4.4M in WWE Network) / -$3.6M in OIBDA
2014 Q2: $43.3M ($23.8M in PPV + $0.1M in VOD + $19.4M in WWE Network) / -$7.3M in OIBDA
2014 Q3: $26.1M ($3.7M in PPV + $22.4M in WWE Network) / $2.3M in OIBDA
2014 Q4: $27.2M ($3.9M in PPV + $23.3M in WWE Network) / $6.8M in OIBDA
FY 2014: $115.0M ($45.2M in PPV + $0.3M in VOD + $69.5M in WWE Network) / -$1.8M in OIBDA

2015 Q1: $37.6M ($9.0M in PPV + $28.6M in WWE Network) / -$1.5M in OIBDA
2015 Q2: $40.1M ($3.5M in PPV + $36.6M in WWE NetworK) / $17.2M in OIBDA

To compare, first half of 2013/2014/2015:

2013 Q1+Q2 = $54.2M ($52.1M in PPV + $2.1M in VOD) / $13.2M in OIBDA (implied "cost" is $41.0M)
2014 Q1+Q2 = $61.7M ($37.6M in PPV + $0.3M in VOD + $23.8M in WWE Network) / -$10.9M in OIBDA (implied "cost" is $72.6M)
2015 Q1+Q2 = $77.7M ($12.5M in PPV + $65.2M in WWE Network) / $15.7M in OIBDA (implied "cost" is $62.0M)

In general, this puts the "cost" for the Network division (PPV+WWE Network) for a non-WM qtr around $23M. The "cost" for a WM qtr is higher (it was $50M in 2014 and $40M in 2015). I'll take the higher end because I'll assume that high-value wrestlers (such as The Rock) are performing. Still, that's large variance, and this $10M delta matters. I will assume that first half of 2016 would cost around $70M for the Network division (PPV+WWE Network).

Steady State (WrestleMania 32 is on WWE Network)
January 2016: 1.40M WWE Network subscribers = $14.0M (Royal Rumble has interest); $2.4M in PPV revenue
February 2016: 1.30M WWE Network subscribers = $13.0M (Fastlane again); $750k in PPV revenue
March 2016: 1.40M WWE Network subscribers = $14.0M (interest returning for WrestleMania); no PPV event - assume about $150k from prior events
April 2016: 1.60M WWE Network subscribers = $16.0M (WrestleMania held at beginning of April); $5.5M in WM PPV revenue + $750k in PPV revenue
May 2016: 1.30M WWE Network subscribers = $13.0M (drop-off after WrestleMania); $700k in PPV revenue
June 2016: 1.25M WWE Network subscribers = $12.5M (leveling off); $750k in PPV revenue
H1'16: $82.4M in WWE Network Revenue (+26% vs prior half year) + $11M in PPV revenue (-12% vs prior half year) = $93.4M / $23.4M in OIBDA

Alternative State (WrestleMania 32 is a PPV exclusive)
January 2016: 1.35M WWE Network subscribers = $13.5M (Royal Rumble has interest); $2.4M in PPV revenue
February 2016: 1.25M WWE Network subscribers = $12.5M (Fastlane again); $750k in PPV revenue
March 2016: 1.20M WWE Network subscribers = $12.0M (subscribers are dropping); no PPV event - assume about $150k from prior events
April 2016: 800k WWE Network subscribers = $8.0M (WrestleMania is only available on PPV); $25M in WM PPV revenue (about 925k worldwide buys) + $750k in PPV revenue
May 2016: 900k WWE Network subscribers = $9.0M (subscribers can watch WM32 on PPV - brief bump); $700k in PPV revenue
June 2016: 800k WWE Network subscribers = $8.0M (leveling off); $750k in PPV revenue
H1'16: 62.9M in WWE Network Revenue (-4% vs prior half year) + $28.5M in PPV revenue (+128% vs prior half year) = $93.4M / $23.4M in OIBDA

Again, there's a lot of assumptions. I figured that it would still cost $70M to run the WWE Network for 6 months even if average subscribership dropped from 1.375M in H1'16 to 1.05M in H1'16. One of the reasons that the WWE Network costs $20M-$30M more than prior years is because WWE is spending so much on "programming". I figured that they would only lose about 50,000 subscribers off the base for January-February if they weren't going to offer WM on PPV in April. I figured that WWE could get almost a million wordwide buys for their PPV and generate well north of $20M for their share of revenue from the event (they made $18M in 2014 when they were competing with the WWE Network and $27M in 2013 between $60 pricetag and HD buys). I figured that WWE would get a post-WM bump as people came back to see the replays of WM. I figured that the steady state of year-round subscribers if you don't offer a lucrative carrot like live WrestleMania is 800k-900k people. As you can see, there's a lot of moving parts.

WWE loves to give assumptions for overall company OIBDA based on the WWE Network subscribers numbers but doesn't ever provide direct Network segment OIBDA based on subscriber numbers. What do you think?

Monday, August 10, 2015

The Online Encyclopedia of Integer Sequences (and wrestling)

One of the more unique resources for number geeks (like myself) is the OEIS (The Online Encyclopedia of Integer Sequences), created by Neil Sloane.

If you're unfamiliar with the idea, there's a good piece online from Quanta Magazine talking with Sloane about the website.

About a year and half ago, I started working on a chapter for my now-cancelled Kickstarter book called, "Babyface, Heels and Graph Theory". One of things I wondered was how many "traditional" pro-wrestling matches were possible were possible with wrestlers.

I go into greater detail in the PDF (I put the work-in-progress chapter up for free via PayHip yesterday), but when I asked a math professor friend for help, he explained that the sum of the partitions we were calculating was actually the same as a OEIS sequence #A023998.

If you had 8 wrestlers (4 faces, 4 heels) and followed the conditions that I outline (book them in matches where each team is only compromised of babyfaces or heels and everyone wrestles once in either a singles, tag or multi-man tag match), you find there's 131 different "cards" you can put together (before you start accounting for the order on the card). By the time you have a dozen wrestlers, there's well over twenty thousand. And then things start growing even more rapidly.

Links: - Online Encyclopedia of Integer Sequences - interview with OEIS creator Neil Sloane - a free 10-page from the chapter that was going to be, "Babyfaces, Heels and Graph Theory"

Wednesday, August 05, 2015

WWE Q2 Analysis and WWE Wrestler Pay

I have posted some serious Wrestlenomics and analysis on WWE's Q2 '15 results over at Voices of Wrestling.

This includes:
I hope you'll check it out if you haven't already.

Also, I was poking around in the WWE financials looking at wrestler pay. In a thread over at F4W/WON (subscription required):
Dave Meltzer wrote, "Wrestler contract money is listed elsewhere."
I wanted to expand on that comment from what I've found.

Under "Talent and other commitments" in the 2014 Annual Report, WWE lists $11,952,000 for 2015. This is "aggregate minimum payment obligations under these contracts as of December 31, 2014" for "Service contracts with certain vendors and independent contractors, including our talent with terms ranging from one to twenty years."

I would assume that's the sum of all total of downside guarantees for WWE for contracts with last past 12/31/15. Obviously, WWE pays out a lot more than that each year. This is just the minimum amount they'd have to provision for.

Earlier in the report WWE notes that "we currently have approximately 140 Superstars and Divas under exclusive contracts, ranging from multi-year guaranteed contracts with established Superstars to developmental contracts with our Superstars in training."

The "average" downside (if you assume that all 140 contracts are in the $12M bucket and all of them last until end of 2015 - both assumptions are probably wrong) would be $85,000 but that's going to be skewed on the top and bottom ends. There's still only a handful of people who have exceptionally high downside guarantees over $1M (HHH, Cena, Orton being the top ones). Unsure how contracts like Lesnar, Undertaker, Sting or even Rock/HBK/Austin are being accounted for. When wrestler's contracts have become public knowledge through lawsuits or SEC filings (for company officers like McMahons and Triple H), I throw them on my website.

I also wonder whether the "developmental contracts" are considered part of the Corporate & Other Expenses as part of the "talent development" function (which includes the costs of the WWE Performance center). The "All Other" part of "Corporate & Other Expenses" was a hefty $45.3M in 2015.

For instance, I've heard that NXT's contacts will pay for travel/hotel when they are touring whereas the main roster contracted talent has to pay for that out of pocket. So, it would make sense that the two contracts might be structured separately and even accounted for in different buckets. Still, 140 contracts certainly includes both the main roster and developmental folks. I would assume road agents and NXT coaches are considered staff. I'm not certain where referees, commentators or ring announcers would fall in this mix.

Also, there's quarterly/annual accounts payable breakdown which includes a line item for, "Talent related" which was $6,446,000 in 2014 and $6,304,000 in 2013. I always wonder if this is the revenue that they paid out on top of the guaranteed downsides for talent, or whether this is something else.

For comparison, Dave noted in the July 27, 2009 WON that "The total downside guarantees for all talent this year is $16.2 million with approximately 101 performers under contract between roster contracts and developmental contracts. " For comparison, the 2008 annual report (published 2/27/09) listed "Talent, employment agreements and other commitments" for 2009 at $18.1M and 2010-2011 at $24.0M.

In 2013, WWE's "talent philosophy" page used to claim:
WWE has approximately 150 performers who are independent contractors, same as actors or actresses on television dramas, soaps or comedies. They do not have corporate responsibilities or duties. The average full-time, main-roster WWE performer works four and a half days per week, which includes travel and appearances, and has an average annual compensation of $550,000. Each year, WWE receives thousands of inquiries from talent wanting to be considered for the WWE roster.
In December 2013, they dropped the average compensation calculation from the page. I think it was the result of a skewed calculation driven by top-end earners. The median compensation for a WWE talent is likely far below $550k annually.

Wednesday, July 29, 2015

Reviewing the WWE Network Accounting and preparing for WWE's Q2 results

I spent almost two hours with Hugh Little and Les Moore on Talking Sheet last night discussing my personal history with Wrestlenomics, WWE lawsuits, preview of WWE's Q2 results and more.

Q: Why didn't WWE announce Sting for SummerSlam? Wouldn't that help the WWE Network number they're about to announce?

A: Announcing Sting this week, last week or anytime in the last four weeks wouldn't have any impact on the number they're about to announce.

The number they're going to announce is paid subscribers as of June 30, 2015 and the average paid subscribers across all of Q2 (April 1 to June 30).

For reference, the Q1 numbers were: (see the 10-Q SEC filing from 3/31/2015)
  • 1,327,000 paid subscribers as of 3/31/2015 broken into 196,000 international and 1,131,000 domestic
  • 927,000 paid subscribers during the 1/1/2015 through 3/31/2015 period

I expect that they will announce more that they did average more than a million paid subscribers during Q2 for the first time ever and that the 6/30/15 number of paid subscribers will be higher than one million but lower than 3/31 mark.

In the 7/27/15 wrestling observer newsletter, Dave put the over/under at 1.18M paid subs as of 6/30.

If the number released on 7/30 is down below about 1.18 million, the stock will probably tumble.
Q: So, what do you think about 1.18M for the 6/30 number?

A: I still feel like that 1.18M mark feels high, so I will guess 1.11M as of 6/30 and 1,035,000 was the 4/1-6/30 paid subscriber average.

Q: If somebody is in a free month, would WWE be able to class them as a paid sub anyway? Because they kind of are... they're in the subscription, and they have their payment details etc., and they're scheduled to pay on the next month.
A: No - paid subscribers refers to money in the bank = revenue.
In the SEC filings, they're pretty clear that they're talking about "paid subscribers". You'll notice in some of the press releases (take the January 27 press release "WWE NETWORK HITS 1 MILLION SUBSCRIBERS") that they don't say the word "paid" anywhere. That's because when they hit one million subscribers, a portion of them were in free trial and a portion of them were in the UK/Ireland where there was longer protection laws around cancellation periods. That's why they hit 1 million subscribers (but not 1 million paid subscribers) near the end of January, hit 1.327M paid subscribers as of the end of March, yet only had an average of 927,000 paid subscribers over the whole period.

Q: How many subscribers does WWE need to be profitable?

A:  The last full-year guidance that WWE gave us was in the February 12, 2015 press release as part of the Q4 results.
Average Paid Subscribers in 2015 = Adjusted OIBDA
500,000 average paid subscribers in 2015 = between ($10M) - $10M
1,000,000 average paid subscribers in 2015 = between $45M - $65M
1,500,000 average paid subscribers in 2015 = between $100M - $120M
2,000,000 average paid subscribers in 2015 = between $155M - $175M
2,500,000 average paid subscribers in 2015 = between $210M - $230M

The average number of paid subscribers over the 12-months of 2014 was approximately 567,000. This 12-month average is below the average for the 2014 period in which WWE Network was operative (WWE Network was launched on February 24, 2014).

OIBDA = Operating Income Before Depreciation and Amortization
However, WWE likes to report "Adjusted OIBDA" which means they can monkey with the numbers to keep out some costs.
The Company presents OIBDA as the primary measure of segment profit (loss). The Company believes the presentation of OIBDA is relevant and useful for investors because it allows investors to view our segment performance in the same manner as the primary method used by management to evaluate segment performance and make decisions about allocating resources. The Company defines OIBDA as operating income before depreciation and amortization, excluding feature film and television production asset amortization and impairments, as well as the amortization of costs related to content delivery and technology assets utilized for our WWE Network.

That's a lot of caveats.

So, WWE estimates that somewhere north of 500,000 subscribers, they can "be profitable" for the year overall. However, it's worth comparing to where WWE was BEFORE they launched the WWE Network. OIBDA in 2012 was $63.2M. By 2013, OIBDA had dropped to $30.4M but they had started to spend on the WWE Network even before they launched it. In 2014, OIBDA was -$15.5M. (see the latest Trending Schedule)

So, if WWE wanted to generate, say 2012 level of OIBDA = $63M. How many subscribers would that require? According to the loose-guidance that was provided, that would require averaging between 982,000 and 1,164,000 subscribers in 2015 (midpoint is 1,073,000). Again, in the first quarter of 2015, WWE averaged 927,000. So they'd need to average 1,122,000 for Q2/Q3/Q4 to hit that point.

That's just to hit 2012-level of profitability. Really, in that scenario, the WWE Network isn't replacing the lost PPV revenue because television rights are A LOT more profitable now than it was back in 2012. But that's what I would consider the bare minimum they should target before you can call this at least starting to work.

Q:  Is there a way to remove TV rights fees from the equation, and just focus on average PPV revenue they've lost, plus decline in DVD sales? Isn't that a more accurate indicator of whether the Network is working or not? The TV rights fees were going to go up even if they didn't start the Network.

A: It's tough.

So, if we look at the "Network" segment (which is PPV+VOD+WWE Network):

WWE Network Segment (within Media Division - PPV+WWE NETWORK+VOD)
2012: $87.7M revenue / $41.3M adjusted OIBDA
2013: $86.3M revenue / $27.9M adjusted OIBDA
2014: $115.0M revenue / -$1.8M adjusted OIBDA
2015 Q1: $37.6M revenue / -$1.5M adjusted OIBDA [927k average paid subscribers, 505k PPV buys] ** WM quarter **

So, they'd need to produce $42.8M in adjusted OIBDA between Q2 and Q4 for the Network segment to be profitable.
Thing is, it's clear that pulling apart the accounting is a total mess.

Look at quarters for 2014:

WWE Network Segment (within Media Division - PPV+WWE NETWORK+VOD)
2014 Q1: $18.4M revenue /-$3.6M adjusted OIBDA [147k average paid subscribers, 678k PPV buys]
2014 Q2: $43.3M revenue / -$7.3M adjusted OIBDA [665k average paid subscribers, 1059k PPV buys] ** WM quarter **
2014 Q3: $26.1M revenue / +$2.3M adjusted OIBDA [723k average paid subscribers, 285k PPV buys]
2014 Q4: $27.2M revenue / +$6.8M adjusted OIBDA [721k average paid subscribers, 271k PPV buys]

It's clear that absorbing the cost of WrestleMania is impactful, but still there's a huge difference between the cost structure in Q3 2014 and Q4 2014 for the Network segment. I'm not entirely sure what that honestly means.

This is why WWE loves to confuse the issue by telling us about the overall company OIBDA based on WWE Network subscribers without actually talking about what the WWE Network segment would be at different levels.

It's worth noting that during this time TV rights have jumped and profitability on TV rights have jumped too:

WWE Television Segment (within Media Division)
2012: $140.9M revenue / $51.6M adjusted OIBDA
2013: $163.4M revenue / $56.1M adjusted OIBDA
2014: $176.7M revenue / $61.9M adjusted OIBDA
2015 Q1: $58.2M revenue / $25.9M adjusted OIBDA

As you can see, in 2012 the combined OIBDA from TV and Network was $92.9M. It fell to $84.0M in 2013 and $60.1M in 2014. Thus far, in 2015, it's $24.4M.

Over the last six quarters, Network has contributed about $4M in adjusted OIBDA and Television had contributed about $99.2M.

Source for analysis: Latest Trending Schedule from WWE

-Chris Harrington
Twitter: @mookieghana