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.

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