DirecTV Upset Over WWE Network Plans, To Re-Evaluate Business With WWE

DirecTV is less than thrilled that the forthcoming WWE Network will carry all 12 live WWE pay-per-view events at a much cheaper price than they are currently offered by cable and satellite providers.

In a statement issued to the Los Angeles Times, DirecTV said they will “quickly re-evaluate the economics and viability of their business” with WWE, adding the company “feels they do not need their PPV distributors.”

Further, DirecTV said the audience for WWE pay-per-views “has been steadily declining,” a trend that will only be accelerated by the cheaper alternative on the WWE Network.

Vince McMahon said in an interview on Wednesday it was in the interest of the satellite and cable operators to continue to carry WWE pay-per-views events, calling it “foolish” for them not wanting to carry the pay-per-views. He continued by saying, it’s “found money” for them.

WWE responded through an official statement to the LA Times, noting they hope to continue to be in business with their pay-per-view distributors and ultimately give fans a choice between the two offerings.

The LA Times has the full story at this link.

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  • dean

    Vince Mcmahon is a complete idiot for putting all 12 ppv events on his on line network. True, the ppv will still be offered by cable companies , but he is pissing them off for no good reason.
    All he had to do was put the b level 8 ppvs on the network and then leave mania, royal rumble, summerslam, survivor series EXCLUSIVE to the cable companies at 60 dollars each and the buy rates would increase because wwe fans would not feel the hassle of having to shell out 50 to 60 bucks a month to see a ppv when they can see the results on the internet or just watch the ppv fall out commence on Monday night raw.

    • beichcua

      Vince doesnt take decisions lightly, he knows what hes doing. wwe is a powerful organization, and the model of the wwe network is what all tv networks are heading. with the price of the wwe network and all that includes,, i think a lot of casual fans that dont buy ppvs will pay.

      • Rus

        But Vince does make bad decisions………ALOT

        • dean

          Exactly, Vince does make bad decisions and I am not talking about his wrestling product.
          There is no good reason to put all 12 wwe ppvs on the network . Keep the big 4 ppvs EXCLUSIVE to cable and satellite providers and they will be happy with the increased buy rates for those 4 ppvs.
          I have watched wwe since 1991 but I have zero interest in a wwe network personally because I am not a “hard core” fan anymore. I am a lawyer now and I grew out of pro wrestling. It is just a form of “entertainment” for me now with zero intrinsic value.
          However, I greatly respect the McMahon family and john cena as human beings and wish the best for them from a health and monetary standpoint.

          • RJR

            That’s all well and good, Dean. But based on your argument of having grown out of pro wrestling, one can only assume you do not order PPVs anyway. Therefore, you’re not exactly the audience the WWE Network is targeting.

            But furthermore, let’s get to the math of the issue. Granted, this is EXTREMELY loose math, as we do not know the exact numbers of all the PPV buyrates, however, it gives you an idea of why WWE Network is a great idea.

            This math is ONLY for domestic (United States) PPVs. But the math will eventually translate to outside of the US.

            In 2013, domestically, WWE sold 2.31 million PPVs, with only Wrestlemania being at a higher price of 59.95 and all others being sold at 44.95. Combined, WWE collected
            $113,764,500. We have no idea how that money is divided, so we won’t account for those kinds of deductions in this math.

            Okay, let’s break that down. In order for WWE Network to make this PPV idea worthwhile, they’ll need to at least bring in $9,480,375 per month. In order to do that, they’ll need 952,801 subscribers. They’re already predicting they’ll get between 1 and 2 million subscribers in the US alone. Therefore, they will be making more money through the monthly subscription than they would by having PPV standalone.

            Therefore, keeping the big 4 only on PPV is a terrible idea for business, because it gives people 4 less reasons why, monetarily, subscribing is a bad idea. It suddenly means that instead of paying $119.40 per year, WWE fans would now have to spend $314.20 per year. People won’t be willing to do both. Not to mention… if they kept the main 4 on PPV alone, could you even imagine the horrible number Survivor Series would end up doing? They haven’t cared about the booking of that PPV for awhile now.

          • dean

            You brought up a lot of great points in your argument. At the end of the day, it is the Mcmahons’ company and they have a lot of educated and experienced people running the business side of wwe, so they are going to go down the road they choose to go down regardless of the risks associated with it.

          • Jason

            To help with the math, on a typical PPV event, 80% or so goes to the cable companies and distributor. Based on that, WWE sees about $10-$15 per PPV buy.

          • RJR

            See, I didn’t even know that. If you cut that profit down by 80%… this 9.95 a month (probably almost entirely going in to WWE’s pockets) will be an incredibly good thing for WWE and its fans. Not to mention, they also get to jump ahead of the game and do what, I predict, all television will be doing within the next 5 years.

          • Nick K

            Hey be nice, you completely nullified his argument you bully lol.

        • JR Texx (Jamie)

          Vince also has a multi-billion $ business based on good decisions. You can’t really say he’s made bad choices when he has made the WWE what it is today.

      • Tom

        Yes buy rates on ppvs have not been good the past few years. Due to distribution fees by cable and sat companies, it has pushed the prices up high the past 12 years. Give people a cheap alternative and WWE can make more money via volume sales such as this.

        • Jason

          They will also make more money because that is less they have to pay to an outside company to broadcast via PPV. The really good thing I can honestly see coming from this is the PPV industry rethinking how much they charge for PPV events. This move isn’t just going to affect the WWE PPV’s, but all of them across the board. If this is successful, watch for other outlets to try and do the same thing. Remember, for those that watch on the WWE Network, WWE gets 100% of that money since they don’t have to pay for others to distribute.

    • illdecide

      Economies of scale, take Wrestlemania, whether they sell 1,000,000 buys at $50 (don’t know exact price, sorry) or 5 million subscriptions at $10 they still come out ahead, and those subscriptions are guaranteed so those 5 million subscribers are locked in for 6 months and still generating revenue for pay per views that the average fan wouldn’t have purchased.

      • dean

        My comment just stated that it is foolish for Mcmahon to put ALL 12 wwe ppvs on the network.
        Even though the ppvs will be available on cable, Mcmahon could keep the BIG 4 WWE PPVS EXCLUSIVE TO cable/satellite then the buys would increase and the cable companies will be happy.
        I personally have zero interest in a wwe network because I am not obsessed with pro wrestling anymore but I have watched wwe shows since 1991 and I used to buy wwe ppvs years ago.
        However, wwe offering 8 ppvs a year on the network for a 10 dollars a month subscriptions is still a great offer to entice wwe hard core fans to buy the network.

      • Jason

        You are forgetting one small thing. As of right now, WWE doesn’t get all of that money. The PPV distributor and cable companies each get a good chunk of that money as well. When all is said and done, there is a good chance that WWE only sees about $10-$15 per buy.

    • Nick K

      Yea clearly Vince got to where he is by being an idiot, let me ask you something. Even if he pisses off every cable/satellite provider what’s gonna happen? You think they’ll drop NBC and its other networks? Of course not and with the ppv’s and everything coming out of the WWE network, what exactly do you think they can do about? What you’re saying is just banter there’s no substance to your claim what so ever.

      • chris

        vince McMahon is a great business man. He is the driving force behind a 1.25 billion dollar company. This wwe network has been in the works for nearly 5 years; it is not some fly by night scheme.
        fans and the wrestling media can argue against it as much as they want, but it is goping to happen and it wil be a great revenue source for wwe and a great form of entertainment for wrestling fans who want more content than the current wwe product which is available on Mondays and Fridays.

  • Jason

    DirecTV will only hurt themselves if they drop the WWE PPV’s. Most, if not all, restaurants that show WWE PPV’s use DirecTV. If they decide to drop them, then the restaurants will go elsewhere in order to show them and keep the customers coming. And that is part of the reason I feel that the “audience” has been dropping. More and more are going out to places to watch with others. Every time I go out to watch a PPV at Hooters, there are more and more people there trying to get a table to watch. It’s cheaper and better on the consumer. Instead of having to pay for food and the PPV, you get to hang out with a few hundred other wrestling fans and just pay for food and drinks for half the price of having it at home.

  • Christen

    DirecTv does this with every network they will then threaten to remove the product until they get more money. I watch the ppvs online anyways cause the price is too much to pay for just one showing.

    • JR Texx (Jamie)

      and I don’t see Vince backing down from it.

  • Matt

    I think DirecTV should be thankful WWE still wants to do business with them. We see satellite networks dropping stations all the time because of pettiness. WWE is free money for them; even if for the big four alone. Even though Wrestlemania will be through the WWE Network, there will still be a substantial amount buying it as WWE Network is on available credit card; PPVs will be charged to the bill. Much easier for some to order, not to mention the restaurants. DirecTV is still going to make millions a year off WWE.

  • Nick K

    So direct TV is going to punish their base because they’re mad at WWE? Kinda like how the sequester was Obama punishing the people because he didn’t get his way. Funny how things work lol.

    • Chris

      …seriously? You people are pathetic. “Hey, here’s an article about WWE and DIRECTV, let me spew some political bullshit. It’ll make me look intelligent and cool.” Guess what, hero…it failed…it ALWAYS fails.

  • Nostaljack

    DirecTV is right, of course. When you offer something for cheaper, it will be more expensive and fewer will buy it. I just want to know when Vince Russo started working for DirecTV?

  • Bob G in LI

    Even the casual fan will end up buying the network package when WM draws closer just for the fact that when making an economically sound decision for their own piece of mind, if people are smart at WM time, they will have to make a decision: JUST WM for $59.95 or WWE Network for 6 months (5 more PPVs + endless programming) for $59.95. If a person is a complete moron, then they will continue to pay for each individual PPV , but if money is tight in their household, as it is for most of us, this makes complete sense! Nobody ever said that the casual fan had to watch any of the other programming. If they only watch the PPVs, then they have saved hundreds of dollars. Therefore, if there is an argument to be made for the casual fan, it’s that they are complete morons if they do not buy into this ingenious, groundbreaking idea!

  • Robert Daniels

    Not every one wants to pay 50 dollars to watch a ppv some just don’t have that much besides it’s crazy to charge 50 dollars for it in the first place that almost more then my whole direct tv bill. I’m glad wwe is giving us a better way to watch it and save money.