WWE and UFC will open 2013 with what looks to be a strong couple of months after years that had to be considered mixed bags.
WWE has The Rock for far more dates this year than last, as well as a WrestleMania that will feature Rock and Brock Lesnar, the two people who noticeably move business, on the same show. There will also be at least a few TV dates with Undertaker to build his Mania program, expected to be with C.M. Punk. And Ric Flair is likely to make some appearances as well.
Starting this week, Rock returns as a fairly regular character, doing most Raws, a few Smackdowns and three PPV shows starting with TV on 1/7 and the Royal Rumble as his first PPV show. Lesnar is expected to return to TV for multiple appearances in March, likely starting in late February, to build up his Mania program, which at last word would be with HHH.
Rock has a ton going on in the first quarter, including a lot of media since Pain and Gain, G.I. Joe and Fast Six are all coming out early next year and hes filming a reality show that he is putting together.
If they dont change directions and he beats Punk for the title, that would mean hell likely win the Raw chamber match as well if hes in it because usually the titles are up in the Chamber matches on the February show, and defend against Cena or whoever at Mania.
The rest of the big show isnt as clear, although rumors include a Sheamus vs. Randy Orton match with Orton going heel, and Big Show against either Ryback or Alberto Del Rio. That largely covers all the top guys, except The Shield, who could wind up in something with Kane & Daniel Bryan.
As far as 2012 went, WWE overall isnt in much different of a position as it was a year ago. The stock price is down at the same time the market is overall up. The network that was supposed to launch in April, now doesnt even have a date even though they are still sinking millions into starting up the project. With the price decline and the Linda McMahon campaign, it was not a good year financially for the McMahons, but the company really is in about the same shape.
The key factors going forward dont appear to be core business. Core business seems solid. PPV was up this year, a lot of which was due to the most successful financial show the company ever did in WrestleMania, built on The Rock vs. John Cena. Lesnar came in and helped numbers on two other shows. But most of the shows were up from 2011 levels, which on PPV now look to have been the year things hit rock bottom. Attendance is likely to wind up even, or perhaps slightly down from last year, while TV ratings of both Raw and Smackdown will be down year-over-year.
The key factors going forward are the network, if it ever gets launched, and how negotiations for a new contract for Smackdown go. The deal with Syfy expires at the end of September. Rights fees for sports have skyrocketed the last year. It is still questionable if that will continue, but its a good time to be in the sports business with a major league product as opposed to the entertainment business. Whether WWE can, after years of arguing the opposite, change itself to where it benefits from this trend is a major question, because any kind of increase in TV revenue is a cushion in case popularity of the product drops.
Between the top matches and being from the New York market, WrestleMania is expected to break all records this year. Met Life Stadium is larger than any arena that has housed a WrestleMania. The football capacity is 82,566, larger than the Pontiac Silverdome that held the biggest attended Mania to date in 1987. With the stage set up that they usually do, they will not break the attendance record, but with the mark up, they will probably announce a figure in the same realm. The all-time record attendance for any event in the stadium is 93,000, and WWE, whether they sell out or not, and in the New York market, the expectation is they will, they always claim a building attendance record. At worst, they will throw out a number in the high-80s and claim it as No. 2.
PPV is also expected to be big. Its hard to predict whether it can be a record-setter this far out. It will be hard for Undertaker vs. Punk to be as big as Undertaker vs. HHH was last year. It will also be hard for Rock vs. Cena to be any bigger than their first meeting. But on the flip side, being in the New York market will mean more publicity than in the Miami market. PPV numbers are always the strongest in the market the show is taking place in, due to the publicity. So its a huge advantage for PPV to come from New York, swelling that metro area, as compared to Miami, Phoenix, Detroit, Atlanta or anywhere else.
The questions come after Mania. Four of the expected big six headliners at Mania, Rock, Lesnar, Undertaker and HHH, will not be appearing much if at all after the show. Rock would likely be gone, perhaps for good, or perhaps not until Mania. If this isnt Undertakers last match coming up, he almost certainly wont be wrestling again until the next Mania. Up until a few weeks ago, there was a lot of talk that due to all his injuries, he would not be on this years show and his career would be over. Lesnars contract expires with Mania. His deal is for millions and only three PPV dates. At some point, the novelty of Lesnar being on the card isnt going to mean 90,000 extra North
American buys like at SummerSlam this year. At that point, the deal stops being worth it. Still, its hard to believe he wont get a similar deal for another year because Mania will likely be a success and hell likely come out of it looking strong. But even so, hes still only going to do limited duty.
The rest of the year will have to rely on the current crew. But even so, the crew has a solid mix of established stars like Cena, Orton and Show. Punk has been around a long time but hasnt been a true main eventer a long time. Ziggler has also been around a long time, but is just now starting to get his chance at being a true headliner. There are guys who are newer at the top like Sheamus, The Shield, Ryback, Del Rio and others. Of those, Sheamus is popular but Smackdown house show numbers also show even with his mega push this year, he is not a difference maker. Nor is Del Rio, who based on push to results, as much as he fits into a lot of nice categories, good looking, real athlete, great presentation and sidekick, decent enough worker, tall enough, and Hispanic, all that they want, probably has the worst ratio of anyone in the company. Ryback was absolutely a difference maker in October, but there are questions regarding him long-term and until The Shield guys are put in a position to fend on their own, its impossible to predict if they can and cant be real difference makers.
While Rock, Cena and Lesnar are clearly the biggest stars, Punk also clearly surpassed Orton as the No. 2 full-timer this year. Ryback moved past Orton in late September. Ziggler is now being pushed ahead of Orton, but in reality, he hasnt gotten to his level yet with the public. Orton has faded and Big Show is actually right at his level now, but Orton also hasnt been pushed hard in a while and has potential to be higher.
Like with UFC, there is going to be no competition in the genre for WWE. The only danger to WWE is really bad booking and the three hours on Monday burning out the audience. On the former, as people want to complain, that has not been the case in the big picture this past year, although certain aspects it is the case.
The three hours of Raw is a different issue and its way too soon to say what its affect is. Nitro went to three hours in January, 1998. The next year was the most successful, by far, in the history of the company. The real fade, which in that case was a falling off a cliff, started to hit around March of 1999, and six months later they were so far up shit creek that it would have been difficult to ever get back. Then they chose the worst captain possible to take them back and four months later, they were dead, even if the funeral was a year later. The beginning of the fall can be blamed on the residual effect on the Goldberg streak ending, the one finger touch title change (happened a week later) and atrocious booking, which had really been the case in the big picture for almost a year. Exactly what percentage value each had is impossible to say.
The point is, for people to say that after five months, while ratings are down, the other aspects of WWE business havent collapsed is a sign the three hours wont hurt, based on the WCW example, there is a time lag of 15 months of bad programming before it does. But the key is bad programming, and also a different environment. Its one thing to collapse due to better competition. Collapsing is harder, but not impossible, with no competition. Throughout history, there are plenty of promotions with no competition that collapsed, even within a year or two of peak business periods.
The biggest overexposure lesson in the history of TV is Who Wants to be a Millionaire. It peaked with three nights a week, which was likely too many, but still averaged almost 29 million viewers for a full year at that time, easily the biggest thing on television. It went to five nights the next year, started strong and faded. Two seasons after its peak, ratings fell so big that the show was canceled. Nitro, which was terrible, hit the wall at 15 months. Millionaire, which was not terrible, just overexposed, hit the wall at 24 or so months. So if Raw is going to be hurt going three hours, the ratings, which have already declined somewhat, its not likely to show in business for close to another year. And perhaps, as the only game in town, the situation is different here.
Overexposure is an issue with UFC. UFC didnt do as many buys overall, but did average higher numbers this year on PPV. The listing we had last week was based on December to November.
There were two shows held in 2011 that counted on 2012 (Jones vs. Machida and Lesnar vs. Overeem).
For the 2011 calender year they ran 16 PPV shows that did an estimated 6,480,000 buys or 405,000 per show.
For 2012, not including this weekends show, they did 5,210,000 on 12 shows or 434,000 per show, and will probably wind up between 5.6 and 5.8 million for the year. Even if they had done 14 shows (March was canceled with no main event available, Septembers first show was canceled with the Jon Jones fiasco), theyd have been most likely slightly down in total buys.
That depends on what they could have put on top in March, but I think Henderson vs. Jones would have beaten out Jones vs. Belfort (and with Chael Sonnen, would have been even bigger, but in the long run theyll do better with that fight in 2013 with more time to build it) but the 9/22 show without Jones and headlined by Joseph Benavidez vs. Demetrious Johnson would have done poorly.
Its still 500,000 and 200,000 for 700,000 total as opposed to 450,000.
In theory, they should be better off since they may be down 700,000 buys or about $15.75 million in revenue, they are probably up $50 million in TV revenue and did have a video game out this year and didnt in 2011. Of course, with running more shows, expenses were undoubtedly higher.
It looks like there are plans for at least two mega-shows this year along with whatever stadium show may or may not happen regarding getting Anderson Silva in with Jon Jones or GSP.
The idea is to build July 4th weekend into their version of WrestleMania every year with a fan fest and loaded card, and they have a second idea with a November show that would be the 20th anniversary (first UFC card was November 12, 1993).
If MMA is legalized in New York, which is a big if, since it hasnt happened yet, they already have a date booked in that month in Madison Square Garden, as well as the idea of a card for that show.
But the main reason why the legislation gets stalled every year are still in place. Its a political game. New York is a strong union state. The Culinary Workers Union in Las Vegas has worked to keep UFC out of New York as part of its campaign against Station Casinos, owned by Lorenzo and Frank Fertitta, which are non-union casinos. As part of pressure to get Station Casinos unionized, they are doing whatever they can to hurt the Fertittas other major business interest.
That includes blocking New York. It also included things like trying to pressure FOX to drop its UFC contract, using stupid things fighters have said on twitter or at when cutting promos, arrests of fighters, things White has said, in sending in material but they havent gotten any traction on that one.
However, the New York Daily News ran a story noting its going to be more difficult this year.
Last year, speaker Sheldon Silver wouldnt even allow the bill to be put up for a vote, even though there were assembly members who believed the bill would have passed if it was put to a vote. The article said it would be more difficult this year for Silver to block it. Silver in the article even admitted that the support for allowing MMA in the state has grown in the last year, particularly among younger members of the assembly.
UFCs most outspoken opponent, Assemblyman Bob Reilly of Albany, retires as of this week. Reilly has been against it as a cause that he had become almost a media point man for, long before the Culinary Workers Union became an issue.
He had argued about the violence in the sport, but also argued when a state strapped for money was turning down a business event that would generate local revenue by saying that he didnt buy that argument, because most of the money goes to promoters from Las Vegas. And that may be true with the ticket money, but a major event brings in people from out of state who spend money on hotels, food and other things while in town. Plus, to be consistent, he would then have to oppose virtually every entertainment event in the state that would have business headquarters outside the state.
The article quoted an unnamed assemblyman as saying if put to a vote in the Assembly, it would almost certainly pass, but noted Silver and his political allies, naming Manhattan Democrats Deborah Glick and Daniel ODonnell, still pose a significant battle to overcome. When the subject came up this weekend and White was asked what fans can do to help support the bill, he said nothing noting the hurdle didnt have to do with showing public support.
UFC also filed a lawsuit against the state in November, 2011, saying the ban is unconstitutional because it violates first amendment rights. The strategy may have been that forcing the state to pile up legal fees to defend itself may be deemed not worthy and thus it would pressure legislators into moving on the bill. But that didnt happen, and the bill stalled again last year, and will no doubt be introduced again this year.
From someone not affiliated with UFC who has connections in the legislature, they believe the tide has turned due to some powerful lobbying work from the UFC side as well as younger members of the legislature thinking the ban is silly.
Besides the planned big shows, UFC goes into 2013 with far more potential than what 2012 realized. But there are caveats. The first is, how many planned fights are going to fall through due to injuries and drug suspensions. The second is, for reasons of overexposure, television ratings for UFC appear to have declined greatly. Its hard to ascertain because this year was so different its almost an apples to oranges comparison. But next year the trends will be more obvious because there will be direct comparisons.
But even if TV ratings continue to fall, if they have big fights, people will buy them. Its the rank and file baseline fights that have fallen and will likely continue to fall provided the main events are weak. If they can go a year with most main events involving people with significant pull, they wont baseline out. The average on PPV may go up this year. Id go so far as to say its a lock it will unless the injury/drug suspension rate of main eventers is similar.
Last year was an experiment with lessons learned. The first is that being on FOX probably doesnt help PPV. In theory it should, but it doesnt. There is even an argument it hurts it slightly as people used to getting a product for free are less likely to buy it. Thus, while the super big fights they dont get free will still do well, if they can see lighter weight title fights on FOX, they are probably less likely to pay for them. There is a theory that you can make stars on FOX, be viewed by millions, and become PPV draws. That should work, but the next PPV title defense of Benson Henderson will tell that tale, because he could not have looked better than in his last fight on TV, and previously, he was not a PPV draw nor that famous.
Ultimate Fighter, moved to Tuesdays, has to draw ratings now. The good part of Friday is as bad as the numbers were this past season, it was Friday and there was a crutch. This coming season will be way up, with Jon Jones and Chael Sonnen. But it has to be way up.
With Strikeforce ending, there is an influx of new talent headed to UFC. While Ronda Rousey is the only superstar to the public on the roster, Gilbert Melendez is expected to walk in and get a lightweight title shot. Nate Marquardt (welterweight champion) and Luke Rockhold (middleweight champion) will come in and probably debut against name fighters but will likely need a few wins to get into the title picture.
Marquardt was announced as coming in this past weekend, even though he was fired by UFC on bad terms for his testosterone levels being off the charts while getting testosterone replacement therapy, causing him to be pulled from a TV main event in 2011. White was throwing around the number of fighters on the roster as 475.
To start the year, here is a scouting report on each weight class: