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Year Ago, Inspired by the Dr. Keith Presents Annuals of 2011 and 2012, We Published

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Year Ago, Inspired by the Dr. Keith Presents Annuals of 2011 and 2012, We Published year ago, inspired by the Dr. Keith Presents Annuals of 2011 and 2012, we published the Ainaugural Cubed Circle Yearbook, attempting to encapsulate what was a pivotal year for professional wrestling in 2014. This year we hope to do the same, albeit for a year of a decidedly different sort. 2015 was dissimilar to 2014 in many respects. It didn't see moments as grandiose as the end of the Undertaker's Streak, Daniel Bryan's WrestleMania victory, or the Guerrero-Atlantis mask match. When evaluated from afar 2015 may even appear stagnant in comparison, as did many of the world's largest and most influential promotions during the year – WWE, NJPW, and CMLL in particular. But, upon closer inspection, the seemingly motionless landscape of 2015 wasn't only very much alive, but both morose and vibrant, disheartening and emboldening. The open wrestling fan of 2015 had more choice and freedom than perhaps ever before, with some ardent observers of the industry even abandoning Monday Night RAW for lack of faith in the lumbering weekly juggernaut. Some turned to Lucha Underground, a show that garnered considerable cult popularity. Others looked to alternative facets of the company such as NXT, which grew beyond what many considered its zenith at the end of 2014, harbouring one of the better years for American women's wrestling in decades. AAA showed promise and ambition on several fronts, but was subject to unfortunate, and at times tragic, circumstances. NJPW was as repetitive creatively as it had been under the Kidani administration, but produced one of the best nights of wrestling of the last several years in WrestleKingdom 9 – made more readily available to an American audience than ever before. And for as cautious as they were creatively, New Japan was positively adventurous on its business front, with NJPW World only strengthening an already impressive catalogue of options for the internationally inclined wrestling fan. A catalogue further enhanced by a continued boom in the realm of podcasts, news sites, commentary, and analysis produced by those in and outside of the industry alike. All of these stories and more contributed to the broader tale of a schizophrenic year. It is in this yearbook that we hope to investigate, discuss, and celebrate 2015; a year that was at times frustrating, but was a thrilling one in the wonderful world of professional wrestling regardless – particularly for those who knew where to look. – Ryan Clingman, Cubed Circle Newsletter Editor inancially speaking, the story of WWE in 2015 was capable of drawing large crowds when they piggy-back Fhow it wasn’t 2014. Thank God. on major Between Q4’13 and Q4’14, WWE posted five consecutive negative quarters of operating income. WWE PPV event weekends are among WWE’s most noteworthy achievements this year. Things turned around in Q1’15 for a variety of reasons. There was a first quarter WrestleMania. WWE started WWE Network paid subscriptions in 2015 are much receiving new revenue from a bevy of domestic and higher than they were in 2014. It helps that WWE cut- international television rights agreements. WWE finally costs in Q3’14, hastily rolled out the WWE Network expanded the WWE Network distribution to the U.K. internationally in August 2014 and added UK/Ireland to marketplace. In the parlance of business, 2014 was a the mix in January 2015 (at a 50% price premium). “transition year” for World Wrestling Entertainment. Using WWE’s numbers, they would need to achieve an average of 1.36M paid subscribers for 2016 to return to Already, WWE has posted three quarters of positive the levels of profitability that WWE had in the late double-digit OIBDA for 2015. Final OIBDA (operating 2000s under their traditional PPV model. As it stands, income before depreciation & amortization – a sort of WWE will probably end 2015 at an average of 1.1M “profit” calculation) for 2015 should be somewhere paid subscribers. It’s a respectable number. However, north of $60 million. That’s a huge improvement over the company seems to be crawling closer and closer to 2013 and 2014 numbers. the artificial interest ceiling for subscribers. Breaking beyond two million paid monthly subscribers still While that may sound terrific, it’s worth reminding seems like quite a reach. readers that from 2007 to 2010 adjusted OIBDA bounced between $78 million and $94 million. WWE WrestleMania 32 will undoubtedly attract new started investing in what would eventually become the subscribers in 2016. The decision in November 2015 to WWE Network in 2011.Simply put, 2015 is a positive finally add a multitude of archival territorial footage development. It is certainly not close to record WWE (NWA, SMW, AWA) should please many fans. Yet, it’s profits. Digging deeper, let’s examine what is difficult to assess the ultimate WWE Network growth propelling the turn-around for WWE. potential. First of all, WWE is driving more revenue from their Most of the accounts are still registered domestically live events. This is mostly in the form of extracting (80% of WWE Network accounts have U.S. billing more revenue per person (higher ticket prices, new addresses) and this year has seen a wild decline with travel and VIP packages) rather than actually expanding live Raw ratings. Can WWE really expect to keep the overall number of people attending each show. growing the WWE Network when their best However, it is worth commenting on how NXT has promotional vehicle, Monday Night Raw, is losing emerged as a notable live event highlight for 2015. The traction? ascension of NXT as an independent event The surprise of 2015 has been the continued moderate 1 success of pay-per-view. WWE generates about the favorite narratives has been how India is the future. In same amount of revenue from PPV that they do from 2016, I expect that tune will switch to talking about the segments such as Venue Merchandise or WWEShop endless possibility of China. Yet, navigating the (about $21 million). PPV business is larger than Chinese media landscape requires precise dealings in a established divisions such as Home Entertainment bureaucratic albatross. Media providers must agree to (DVDs/BluRays - a long-shrinking business) or Digital state oversight (some say outright censorship) to gain Media (WWE’s golden calf; big social media numbers licenses and distribution. but tiny revenue now that webcast PPV aren’t available). PPV is still profitable, even though the There is a family connection. Shane McMahon left majority of the buys are through international WWE to join a media company called “You on distributors at a much lower price than historic US Demand”. YOD touts themselves as a “leading multi- prices. platform entertainment service company delivering premium content, including leading Hollywood movie Television rights continue to fuel the WWE’s growth. titles, to customers across China via subscription and That’s how it is. That’s unlikely to change in the near transactional streaming services.” future. The bundle of deals that WWE negotiated in 2013/2014 have built-in escalators. WWE will take It’s completely fathomable that WWE will end up home more revenue every year regardless of whether partnering with YOD or possibly even outright buying ratings grow or ratings shrink. It’s a pretty sweet deal. the company in order to pursue their dreams of The only hitch is when partners don’t pay. That was the achieving WWE Network distribution in China. It’s a issue with Thailand’s CTH. In that situation, WWE noble mission, but my assessment is that will more took the company to court to demand their $23 million remain an aspirational talking point for WWE in TV fees. Extracting such a bounty from an conference calls rather than an executed 2016 project. international corporation can be a lengthy and exhausting process. While the Thai deal only represents With television negotiations locked up and television a small portion of the overall throng of new TV deals ratings slipping, WWE’s motive in 2015 was to focus (US, Canada, UK, UAE, Mexico, India), the precedent investors on their year-over-year WWE Network is unnerving. subscription growth (an easy target when you’re moving around WrestleMania timing, comparing The WWE Network was recently rolled out in India at a domestic-only to internationally-distributed platforms) $9.99 price-point. WWE didn’t include any special and bragging about their Twitter followers, YouTube mobile-phone support and live PPVs are blacked out video views and Facebook fans. for 24 hours. It doesn’t appear WWE is making much effort to gain huge traction in some of these markets. The vague but omnipresent “monetize digital and social media presence” objective remains a company mantra. In January 2016, WWE Network will expand into Japan and Germany. Moving into Deutschland is a By adding together all of the accounts for each of the worthwhile venture, but it is unclear how many WWE’s superstars, the company loves to brag about consumers will join the WWE Network fresh and how their half-billion followers. Obviously, the true number many customers will merely switch over existing of unique people with a ‘WWE-affinity’ (to use the “domestic” accounts. company’s phraseology) is certainly far lower. The underlying thesis is solid – WWE will figure out a way There are only a handful of markets left for the WWE to turn those eyeballs into dollars. While they insist Network to launch. They include the Philippines (where they aren’t rushing the initiatives, one wonders who WWE had to sue their TV partner Solar in 2013 over exactly is leading this initiative.
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