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Best For Business (8/5/15): WWE Second Quarter Financials, Fans Can't Stop Loving Dean Ambrose


What's happening, fellow smarks? Welcome to another edition of Best For Business, your regular resource for conversations on the financials and metrics behind this crazy sports entertainment industry we love so much.

This week, we're going to take a look at the much-awaited second quarter financials of the WWE, which were just released last week, as well as a quick peek into the WWE Shop Bestsellers List to see which Superstars and Divas are moving the needle as far as merchandise sales are concerned.

Lots to dive into this week, so let's get into things, shall we?

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How did the WWE perform in the three months after WrestleMania?



Hot off a critically-acclaimed WrestleMania Play Button, the WWE was loaded with a head of steam to take on the months that followed, and their financial performance reflects this.

Most impressive was the fact that in this quarter, the WWE delivered massive swing of nearly $20 million dollars in profit compared to the second quarter of last year. For this past quarter, the 'E recorded a positive net income of $5.1 million dollars, as compared to the $14.5 million dollars it lost in Q2 2014. It's not just the fact that the WWE turned a loss into profit that amazes us, it's the fact that Q2 2014 had the full financial weight of WrestleMania 30 behind it. To put it more simply, the WWE did better financially in a non-WrestleMania quarter this year than it did in a WrestleMania quarter a year ago. We don't mind at all that total revenues for the quarter dipped slightly by 4% to $150.2 milion compared to a year ago, because the money generated now was so much more profitable than last year.

What's been driving this growth? We took a look at the revenue delivered by each division under the WWE—Media, Live Events, Consumer Products, WWE Studios, and Others—to see which ones have been performing well.

All numbers, like the Prime Time Players would say, are in MILLIONS OF DOLLARS!
No surprise that Live Events dipped big time versus a year ago—they had a WrestleMania in their pocket last year, so we'll give them a pass. It's really Media (which includes the WWE Network as well as various TV rights) and Consumer Products (which includes merchandise sales and licensed properties such as the 2K video game franchise) that carried the load for the past quarter. Let's dig in deeper, starting with the Media division.

All figures are in millions of US dollars.

In this nearly-$100 million dollar division, it seems that the WWE has their new TV deal to primarily thank, as the higher fees they negotiated with the USA Network have fully kicked in, growing their TV-related revenues by 18%, offsetting a 9% decline in WWE Network revenues. We're not strongly worried about the Network bringing in less money this past quarter than they did in the same period a year ago; they are, after all, heavily dependent on their free one-month trial to draw in potential subscribers, and these obviously don't generate money for them in the short term.

But with the Network, we're not really interested in the money generated. It's the subscriber count that's interesting, and in their Q2 financials, the WWE had more good news to bring to the table. They reported an average of 1.216 million paying subscribers throughout the second quarter of this year, which is why over the last 12 months, it's been able to generate $131 million worth of revenue.

The WWE was quick to point out the strong growth of network-exclusive content as a key part of this success, specifically calling out WWE Too Hot For TV, Swerved, and the Stone Cold Podcast as among its top regular performers. with Beast In The East being named the all-time most-viewed non-PPV show ever aired on the Network. International expansion continues to be a prime driver of growth, with Italy and Malaysia now included in the Network's coverage, while India, China, Germany, Japan, and Thailand are next in line for roll-out. Still no Philippines on the list, goddammit. Thank God for livestreams and FOX Network.

Let's take a look now at the breakdown for the Consumer division.

All figures are in millions of dollars.
Venue Merchandising reflected a drop, but that's to be expected; again, Q2 2014 had WrestleMania recorded under it, which itself generated $2.6 million in merch sales, so Q2 2015 would obviously reflect worse numbers. What excites us here is the massive growth in Licensing fees. Part of this is due to more favorable royalties arranged with 2K, but the WWE is incredibly proud of how strongly its WWE 2K15 video game is performing. They proudly trumpeted how unit sales were performing roughly 40% better than last year's franchise, and that's been driving their success so far. The WWE Shop has been massive as well, growing almost 50% to deliver nearly $6 million in revenues for the quarter. As a whole, the performance of the Consumer division as a whole just means that the WWE Universe loves the product, and are buying more and more of any related merchandise. Good job, WWE.

I'd like to just quickly point out how the geographic spread of WWE is changing, by taking a look at the revenues generated across regions.

All figures are in millions of dollars.

North America is obviously the WWE's biggest market, but we see that expansion into other regions continues to be the fuel for the company's growth. The Europe/Middle East/Africa cluster grew by almost 35% versus a year ago, while Asia Pacific (APAC) was right behind it at nearly 27% growth. Come on, WWE. We're one of your big growth drivers. Throw us a bone and give us a decent live event once in a while. Latin America is negligible, so we don't expect the WWE to focus too much effort on that in the meantime, which is good news for Lucha Underground and AAA, we suppose.

This softening of the North America market (due, once again, to WrestleMania being attributed to Q2 last year) compounded by strong growth in other markets means that the revenue contribution makeup is shifting as well.


Last year at this time, North America delivered nearly 80% of the WWE's total revenues; for this year, that number has dropped all the way down to 72%. The international market is becoming more and more important to the WWE—investors like diversity, remember—so let's hope they begin to invest more heavily in developing fanbase countries like our own.

So overall, Q2 2015 has been sensational for the WWE. This continues a trend started in the first quarter this year, which the WWE heavily trumpeted as their highest-grossing quarter ever. Taken as a whole, the entire first half of 2015 has been kick-ass.

All figures are in millions of dollars.

They've grown by 16% in revenue from the first half of 2014, turned a $35 million dollar loss into a $22 million profit, and taken home $15 million in net income so far, as compared to the nearly $23 million bath they gave their investors last year.

Looks like for all the grief the IWC gives Vince McMahon for being out-of-touch, the old man certainly knows what's #BestForBusiness, and he has the financial performance to prove it. The WWE Network continues to attract more and more subscribers, we as fans are buying more and more of their merchandise, and the international market continues to boom for the WWE.

Let's hope they can keep this up.

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Which WWE Talents Had People Talking Over The Second Quarter?

So we've established how well the WWE performed in the second quarter of this year. We were curious though which specific Superstars had fans in a buzz over the period, so we took a look at Twitter to see which ones were generating the most conversations and engagement online.

All numbers are in thousands.

All over the world, we just can't stop talking about John Cena, can we? The Doctor of Thuganomics and reigning U.S. Champion topped the list of total social media mentions between April 1st to June 30th of this year with well over 500,000 individual mentions.

No other Superstar comes even close to the magic of Cena in generating online conversations, but we do have a strong second tier of talents right behind him. The ex-Shield trio of reigning WWE World Heavyweight Champion Seth Rollins, "The Lunatic Fringe" Dean Ambrose, and Roman Reigns continue to generate tons of interest, while "The Beast Incarnate" Brock Lesnar, the prizefighter Kevin Owens, and Sheamus created plenty of buzz on their own too.

Moving down the list, we see a list of other Superstars that continue to be highly-mentioned despite not having any high-profile storylines written for them. Randy Orton, Daniel Bryan, and the injured Intercontinental Champion Ryback lead this list, proving that fans haven't forgotten them even if sometimes it feels like the WWE has.

We do want to point out one big thing though before we close this section. We all know John Cena is the face of the WWE, and that Seth Rollins is its reigning champion, but please take note, WWE: Your fans freaking love Dean Ambrose.


Despite spinning his wheels and being booked to lose a hell of a lot of matches, based on Twitter mentions Dean Ambrorse is the third most discussed Superstar in the WWE Universe today, ahead of even the WWE's supposed golden boy Roman Reigns, who's only good for #6 on the list, or even Brock Lesnar, who's supposed to be the big mainstream draw for the company. Please do something useful and productive with this man.

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Which WWE Superstars Have Been Moving Merch?

It's also very useful to take a look at WWE Shop to see which Superstars (and Divas) the fans are literally buying into; WWE merchandise isn't cheap, after all, so for fans to be willing to spend money on a talent is a very important metric.

We sent Buezzy the Smark Henry House Elf over to manually audit the Bestsellers list on the site. As always, we don't know the absolute volumes or the timeframe being covered by the list, but it gives us a best-guess estimate on overall merch-generating potential across the roster.

Here's how the list looked as of August 3, but we do have to warn you—a lot of items have been on sale on the Shop lately, so read this list with caution.

10.
WrestleMania 31 Plush Bear (Sale)

9.
Brock Lesnar Suplex City Shirt




8.
Paige This Is My House Shirt


7.
Money In The Bank Lunchbox
6.
Money In The Bank Commemorative Briefcase
5.
John Cena Never Give Up Shirt (Sale)


4.
Undertaker Deadman Inc. Shirt


3.
Shield Dog Tag (Sale)

2.
Daniel Bryan YES! Shirt (Sale)

1.
"Rowdy" Roddy Piper Shirt

It seems like "Rowdy" Roddy Piper has discovered the secret to outselling John Cena's merchandise. Too bad it involved him dying, and we're still not over his untimely passing.

Hot Rod dominated the sales charts with his iconic shirt, but the list gets more and more interesting as we move down the list. For whatever reason, Money In The Bank seems to riding a surge of interest (we secretly want that lunchbox), but it's rare to see a premium-priced commemorative item make this list, so seeing the $79.99 briefcase at the #6 spot is extremely intriguing.

We're super stoked to see Paige's new "This Is My House" shirt crack the top ten list, and it could mean that the #DivasRevolution is really becoming a thing, apart from the fact that the shirt is pretty damn sweet on its own. Let's hope the momentum keeps up.

If we take out sale items however and just focus on full-priced merchandise, we end up with the following items that could have made our top ten countdown of bestselling merchandise:

Our reigning Divas Champion Nikki Bella's "Fearless" cap...
The always-awesome Kevin Owens "KO" shirt...


Even more Hot Rod merchandise...


And Ryback's pretty kick-ass "Feed Me More" hoodie.


If there's one thing we've learned over the past months, it's that the WWE Shop's bestseller list is pretty fluid, so Kevin Owens, Brock Lesnar, or Dean Ambrose taking over the charts for a single week at a time can be treated as simple flash-in-the-pan aberrations. But we love how no one Superstar is dominating the charts this time around. There's a great spread among a huge variety of talents—including a couple of Divas!—and that's a good thing because it means more marketable names for the WWE to push.

We still want that damn Money In The Bank lunchbox though.

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That's it for this week's edition of "Best For Business." We've seen a phenomenal quarter for the WWE, business-wise, showing excellent growth in WWE Network subscriptions, the international market continues to boom, video game sales are massively up, and we're buying more and more WWE merchandise. We've still got our fingers crossed for the eventual rollout of the Network here in the Philippines, but that's hopefully just a matter of time, as the WWE builds up infrastructure and capability to support more markets.

John Cena is still the talk of the WWE Universe, but we've got a promising crop of next-tier Superstars owning our hearts as well, particularly Rollins, Ambrose, and Reigns. Brock Lesnar continues to be Brock Lesnar, while it looks like the Kevin Owens bandwagon is still going strong.

It's a great time to be a wrestling fan, but the Philippines can do more. Don't forget to keep talking about your favorite Superstars and Divas online, consuming their content at WWE.com, and picking up some merchandise once in a while. That's the only way we can get the WWE to support us as a market—by showing them we have the voice, the passion, the engagement, and the spending power to be good to them in our market too.

What do you think of the numbers? Leave us a comment below, and we'll try to address any questions in a future column.

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Mark De Joya (@MDJSuperstar) is an advertising professional and brand strategist by day, but dreams of being the Vince McMahon of the Philippines by night. He writes anything to do with numbers for Smark Henry: People Power, our weekly fan survey, and Best For Business, our regular financial report. With 18" arms and a 300-pound squat, he is also the official bouncer of the Smark Henry offices. 

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