Where Are WWE PPV Streams Headed? Amazon? NBC Peacock?

It's been a rollercoaster descent for WWE stock the last 1.5 weeks. First, Vince McMahon dismissed co-presidents George Barrios and Michelle Wilson, two longtime executives. Barrios in particular was known to investors as the voice for the company on earnings calls. That combined with disappointing metrics in WWE Network subscriptions, live attendance, and merchandise was enough to push the stock from over $62/share on January 30 to $42.50 at market close on Friday. In about a week, the value of the company plummeted from $4.9 billion to $3.3 billion.

One thing that will have at least a short-term revenue increase for WWE was Vince McMahon's announcement on Thursday's stock earnings call that an unspecified portion of premium WWE content could be sold to an unspecified OTT streamer. At first this sounded like a vague proposition, but then McMahon disclosed that conversations are advanced enough that they could finalize in Q1 -- meaning by the end of next month.

McMahon said that all the major players have expressed interest. It's quickly becoming a crowded space: There's Netflix, DAZN, Amazon Prime, ESPN+, Hulu, and Disney+ now. NBCUniversal's Peacock and AT&T's HBO Max are launching soon. YouTube and Facebook are lingering out there too, but they'd have to dramatically change the content of the PPVs if the revenue were to come from advertising as opposed to subscriptions.

Currently, WWE airs all of its PPVs on WWE Network, which also has pretty much all of the relevant archives from WWE, WCW, ECW, and NXT, in addition to content from a variety of older territories. This costs $9.99 per month. As stated earlier, subscriptions have been falling recently (this is partially attributable to so much more streaming competition in the marketplace, and partially to WWE's years-long comparative struggle to create compelling new stars and storylines). WWE Network had 2.1 million subscribers in April of 2018, and has declined to 1.4 million as of last week's earnings release.

The two spots that make the most sense for WWE to put some or all of its PPVs are Amazon and Peacock, and those are the two that others are most speculating about. For Amazon, Laura Martin, an analyst for Needham, wrote that Jeff Bezos's internet behemoth could pursue these licensing rights as the first step in exploring the acquisition of the whole WWE company. Steven Muehlhausen, a combat journalist for Sporting News, said that Bezos has "expressed interest" in acquiring the rights to WWE's "major" PPVs.

As far as NBC Peacock goes, they are late entrants into this territory and need things that will immediately create buzz. They're spending about $20 million on a Friends reunion panel and it's clear they will need more differentiable original content. WWE has been in business on and off with NBC since the 1980's; Raw has aired on USA Network from 1993-2000, and from 2005 to present day (it aired on TNN/Spike TV in between).

In his weekly subscription newsletter, longtime wrestling reporter Dave Meltzer spent a lot of time focusing on the synergies with Peacock in a way that made me wonder if he'd heard something as opposed to merely connecting dots. He also wrote about possibilities of ESPN+ and DAZN, but seemed less confident in them as fits. He never mentioned Amazon.

HBO Max doesn't make logical sense because AT&T is in business with rival upstart AEW; Netflix has thus far shown no interest in live sports, live sports-adjacent, or even general live content.

Beyond where WWE's PPVs land, the question then becomes which ones get sold to a streamer and which ones remain on WWE Network. If it's the "major" PPVs heading elsewhere, this means WrestleMania, SummerSlam, Survivor Series, and the Royal Rumble. There are about eight more each year, plus the big Saudi Arabia shows, plus NXT Takeover's.

One thing I'd personally like to see WWE explore is airing some big shows on broadcast TV. I'd be fascinated to see how many people would watch WrestleMania or the Royal Rumble, or even an A- PPV like Money in the Bank, on Fox or NBC. This was not mentioned on the earnings call, but you'd have to think it's also something that is plausibly on the table as WWE goes about further segmenting its rights.