The Wrestling Observer Yearbook '97: The Last Time WWF Was Number Two
Page 61
Ted DiBiase
(December 29) Ted DiBiase is actually thinking seriously of making a comeback. DiBiase, who turns 44 next month, has been out of action a few years since suffering a serious neck injury while wrestling in Japan. He collected on a Lloyd’s of London insurance policy signing off that he would never be able to wrestle again. For him to wrestle, he’d have to pay Lloyd’s a figure said to be around $462,000 and he’s apparently strongly considering it. During his career, DiBiase was one of the best workers of his era.
43 – Business Analysis
MAY 5
The first quarter is, at least in the United States, the most important quarter of the year because traditionally that’s when all facets of the business are usually at their high point in any given year. What these figures show, which is something that has been obvious all along, and that is that house shows, pay-per-view business and television ratings are three entirely different animals. And the feelings people have close to and inside the industry as to how business is, and how business really is, are often entirely different stories as well.
WWF
(‘95/‘96/’97)
Attendance - 3,227 / 5,838 / 5,718
Gate - $50,447 / $84,558 / $87,956
Sellout percentage - 4.8 / 18.1 / 6.6
Cable ratings - 2.07 / 2.00 / 1.43
PPV buy rate - 1.15 / 1.02 / 0.67
Avg. PPV revenue - $3.84M / $3.06M / $1.89M
WCW
(’95 / ’96 / ’97)
Attendance - 2,020 / 3,467 / 4,955
Gate - $21,280 / $39,250 / $61,027
Sellout percentage - 0.0 / 24.7 / 38.6
Cable ratings - 2.27 / 2.33 / 2.20
PPV buy rate - 0.96 / 0.65 / 0.70
Avg. PPV revenue - $2.63M / $1.96M / $2.06M
AJPW
(’95 / ’96 / ’97)
Attendance - 2,290 / 2,247 / 2,450
Gate - $98,160 / $73,440 / $80,752
Sellout percentage - 38.2 / 44.3 / 37.9
TV ratings - 2.13 / 2.77 / 3.63
NJPW
(’95 / ’96 / ’97)
Attendance - 3,047 / 3,674 / 3,280
Gate - $158,410 / $169,523 / $134,190
Sellout percentage - 22.7 / 71.8 / 61
TV ratings - 2.30 / 1.93 / 3.30
Now, let’s try to examine what these numbers actually mean, promotion by promotion.
As we all know, the perception seems to be of the World Wrestling Federation as being this company on a major decline, having been passed, even lapped by World Championship Wrestling, and WCW as the most powerful wrestling company on the planet.
In comparing the two promotions, we see that the WWF is still ahead when it comes to house shows, although both major American companies have made tremendous strides in getting people out to the arena since the lull in wrestling’s live show popularity from 1992-95. It should be noted that WCW has sold out 38.6 percent of its shows thus far this year while WWF is at 6.6 percent, which means a lot of the difference in average attendance is simply because WCW is playing in smaller-capacity arenas overall, and a lot of the gate differences is because WWF charges higher ticket prices generally to its shows. WCW should close the gap this next quarter with a recent ticket price increase. Over the first three months of the year, the WWF is pretty much when it comes to arena business, at a similar level as last year with no real decline at all, and way ahead of business during the same period in 1995.
However, in comparison to both previous years, the cable television ratings across the board, and not just the Monday night numbers which have actually held up better than the Saturday and Sunday numbers, are in the toilet. As you can see when it comes to WWF, back in 1995 when arena business was 43 percent lower than it is today, television ratings were 45 percent higher. If you ever need anymore facts to show that getting people to watch pro wrestling on television and getting people to attend live shows are two entirely different things, then keep reading because you’ll get all the evidence you need.
The alarming numbers from a WWF standpoint are in PPV. Keep in mind that the 1995 figures are a little misleading on the surface in comparison to 1996 and 1997 because 1995 compares two shows, WrestleMania and Royal Rumble, while in both 1996 and 1997 you’re throwing in a February In Your House that did decidedly lower numbers. Still, comparing this year with last year, the WWF is down, and this is not in any way a misleading figure, some 34 percent in the PPV division.
The perception is that this is because WCW has taken over, and that really isn’t the case either because WCW during the same period has only slightly increased its numbers from last year and is well behind the same period in 1995. That latter pair of facts will probably surprises a lot of people who believe that the buy rates have gone through the roof of late due to the NWO and Nitro, when the buy rates were considerably higher before either was around. And that’s throwing in some major hot-shotting this year in the form of an estimated $500,000 to Dennis Rodman and who knows how much to Roddy Piper in addition to Hulk Hogan’s huge percentage which has been there for the past three years.
How many of you knew that the TV ratings thus far this year for WCW are down as compared to the same period in both 1995 and 1996? However, since the decline is six percent as compared with the WWF’s decline of 29 percent, the perception is that WCW has increased. Of course, WCW has increased tremendously when it comes to house show business, with it hitting yet another level in January. House show business has nearly tripled in the past two years for WCW and is blowing away any kind of figures in the history of the company. This comes at the same time that the company’s television ratings and even buy rates have declined compared to the same quarter of the past two years.
Basically what we can gather is that more people are going to wrestling live, and although we don’t have figures to back this up here, people are buying a lot more merchandise. However, fewer people are watching on television and ordering PPV shows. Since the PPV revenue per month is far more impressive and important than house show revenue or television advertising revenue (the only real money the companies get from television although in WCW the perception is important because the people who foot the bills live and die by TV ratings), the buy rate numbers when it comes to bottom line dollars are far more important than the house show and television ratings numbers.
For a total gross, as an example, if WWF averages 17 house shows per month at $88,000, that’s about $1.5 million coming in, before taking away renting, advertising, transportation and all the other expenses of running an arena schedule. PPV, in a down period for the company, brings in $1.9 million and that’s with far less overhead. So as hot as wrestling seems, that, in some ways may also be misleading. From a WCW standpoint, since they run fewer house shows, the PPV revenue is even more important to them than WWF.
From the All Japan standpoint, despite the perception of the company being stale and the lack of heat at the arenas compared to years past, the average attendance is actually slightly up from the past two years and the sellout percentage is roughly the same.
But check out the television ratings. For a stale promotion that based on its traditional nature, lack of angles, lack of new faces on top, lack of heat and an absolutely horrible time slot, it is drawing the best ratings of any major promotion, up 31 percent from the past year and a whopping 70 percent as compared with two years ago, during a period that the perception was that the promotion was hot and the arenas were filled with heat. Heat inside the building for the matches may actually be the single most overrated factor in how hot a promotion is. It’s definitely the single most misleading. But that 70 percent increase in ratings really hasn’t translated to the company taking in more money at the gate.
New Japan has had a similar marked increase in television ratings, although attendance has slightly declined from last year and it’s a little ahead of 1995. If you look at the sellout percentages for New Japan, you see that while arena business has declined from 1996, it’s st
ill overall quite a bit stronger than 1995 and television viewership is way up from both the previous years.
In a nutshell, in the United States, television ratings are down, buy rates are down, and at the same time more people are going to live shows now than in years. In Japan, television ratings are through the roof with no logical explanation as to why, since they aren’t the priority they are in the United States and the shows have largely been unchanged in format for the past 25 years as compared to the constant tinkering and hot-shotting that has actually resulted in lower ratings in the United States over the past few years. Business live is largely stagnant, although stagnant at a healthy level.
JULY 28
Since we did a business analysis of the first three months of the year in pro wrestling in the 5/5 issue and not all that much has changed in regard to momentum or direction, we are just going to offer these figures comparing the first six months of 1997 with similar periods in 1995 and 1996 for both WWF and WCW.
WWF
(’95 / ’96 / ’97)
Paid attendance - 3,275 / 5,486 / 5,615
Average gate - $44,658 / $80,505 / $88,951
Average cable rating - 2.13 / 2.03 / 1.60
Est. average buy rate - 0.95 / 0.79 / 0.60
Est. average PPV revenue - $2.66M / $2.19M / $1.60M
WCW
(’95 / ’97 / ’97)
Paid attendance - 2,008 / 3,502 / 5,317
Average gate - $20,668 / $40,801 / $73,484
Average cable rating - 2.10 / 2.17 / 2.12
Est. average buy rate - 0.75 / 0.56 / 0.65
Est. average PPV revenue - $2.01M / $1.62M / $1.95M
The major thing to notice in this table when it comes to why budgets are being tightened is that even though WWF’s arena attendance average has increased this year, it doesn’t make up for the drop of nearly $600,000 per month when it comes to PPV revenue as compared to one year ago. Another note when it comes to average is that this year the WWF has been running 15-18 house shows per month as compared to 22 the previous year so once again while average is up, total revenue would be down even in that category.
WCW, which has been the leader when it comes to television ratings on-and-off for much of the past decade (although it was closer and there were several years like 1995 where the WWF did beat WCW overall when it came to ratings), has almost caught up this year in attendance. The gate differential is largely because it took WCW until well into this year when it raised its ticket prices to basically the same structure, and now in many markets a higher structure, than WWF.
WCW has a substantial lead in ratings, and has taken the lead in PPV although the gap is still relatively small. WCW, on the other hand, had greatly increased its arena revenue to the point of nearly doubling its average income per show. In some instances, due to playing in larger and more costly buildings this year as opposed to last and spending more on advertising, I don’t think the actual profit margin would have doubled but it would be a very safe bet to say it’s increased dramatically, while at the same time they are up over last year in PPV as well, while TV ratings have only shown a slight decline over the same period last year.
One thing it should be noted when it comes to TV ratings and myth vs. reality, is that the NWO angle is constantly being touted as the reason the ratings are up and that WCW is beating WWF. One has to say the NWO angle is very likely a main cause for the increases at the house shows, certainly in merchandising and buy rates, but the fact of the matter is the ratings over the first six months of 1996—before the NWO came into existence and for the most part only including one month of Scott Hall and maybe a week or two of Kevin Nash, were higher than the first six months of this year. Why do I think I’ll be reading next week somewhere how if it wasn’t for the NWO that WCW’s TV ratings would be in the toilet?
Another interesting note from the WCW comparisons is that even though buy rates are up significantly from last year, if you compare them with the same period in 1995, before Nitro, before WCW became “hot” and without using football and basketball superstars on every PPV, they are actually lower, and PPV is still the leading revenue source for a major league American pro wrestling company nowadays.
SEPTEMBER 29
The question of whether the WWF going live or on tape has anything to do with the ratings has been answered many times over in the past. The answer is it has nothing to do with it because the virtual entirety of the television audience that watches wrestling doesn’t follow the product close enough to even know when shows are live or on tape, and those who do follow it that closely are going to watch the taped show anyway.
The unanswered question for this week is whether the venue, in this case a sellout crowd at Madison Square Garden in New York, the most famous arena in the world in the most populous city in the country, makes a difference. Shocking to many, the answer in this case was also a resounding “no.”
The WWF Raw show, with all the New York hype over the past month plus about this being an extra special show, and a lot of work in pre-production being done with taped historical features to add to the atmosphere of what was largely a very good television show on 9/22 from MSG drew a 2.33 rating (2.35 first hour; 2.30 second hour) and 3.49 share. That compares with a 2.54 rating on 9/15 with a taped show coming from Muncie, IN with far less hype.
Even more depressing from a WWF standpoint, and astounding, is that when Nitro went off the air at 10:16 p.m. Eastern time, that the Raw audience showed almost no growth, and wound up averaging a 2.33 for the three segments after Nitro was off the air, the same exact average it had for the five head-to-head segments. This meant that of the basically 2.6 million homes watching Nitro, that statistically none (which translated means so few it isn’t statistically significant to even mean an 0.1 rating differential) of those homes tuned to USA.
The general feeling when the new season started with the new time slot for Raw was that it would get beaten during the head-to-head segments by Nitro as has been happening the past year plus, but it would pick up greatly in the ratings with the Nitro lead-in once Nitro goes off the air. That has happened in the past, but didn’t occur at all this week.
The MSG show drew 14,615 fans, packing the building cut down in seats to the taping television, with 10,672 paying $258,339 and another $97,720 in merchandise. While there have been larger paid attendances for live Raw tapings, with the high New York ticket prices, this was a bigger live gate than at any Raw (or for that matter Nitro) taping in history.
The other pattern becoming prevalent in the new season, is that Nitro now peaks every week from 8:45 to 9 p.m., and does lose a fraction of its audience when Raw and Monday Night Football, and probably more the latter than the former, begin. Although Nitro’s ratings remain tremendously impressive against the football competition, there is also a pattern of viewers declining as the show goes on.
The drop at 9 p.m. should be expected and easily explainable, but the huge drop every week before the main events the show is being built around, when in the past the company did phenomenal final quarter numbers, is a telling sign. Perhaps it’s been too many weeks without Sting on television doing an end of the show fly-in. Perhaps people have seen the fly-in so much that they don’t need to stick around for it anymore, even though it’s no longer happening. Probably the wrestlers they’ve been using to anchor the main events of late, in particular Curt Hennig the past two weeks and Diamond Dallas Page and Lex Luger the weeks before that, are either not over as mainstream TV draws in the case of Hennig or have had their characters flattened out by recent angles in the case of the other two.
Nitro on 9/22 did a 3.69 rating (3.83 first hour; 3.58 second hour) and 5.57 share, which means the head-to-head five segments saw Nitro winning 3.58 to 2.33. Nitro replay did a 1.6 rating and 3.0 share.
Nitro peak was a 4.4 for the segment involving Scott Hall, Syxx, Larry Zbyszko and the quickie match with Hector Garza. The rating stayed strong with the second highest segment a 4.0 for the eight-man Lucha
match and the Piper interview, despite the start of Raw (2.1 for MSG nostalgia clips, Ahmed Johnson vs. Rocky Maivia and Austin interview from the stands) and football. From that point Nitro dropped to a 3.6 (Steiners vs. Meng & Barbarian) to Raw’s 2.3 (Undertaker and Michaels interview); followed by a Nitro 3.8 (Hogan & Bischoff interview, Savage interview, Savage vs. Richards) to a Raw 2.4 (LOD vs. Faarooq & Kama); a Nitro 3.2 (Raven attacking Richards, Konnan & Norton vs. Booker T) to a Raw 2.6 (Owen vs. Pillman and Austin using the stunner on McMahon) and finally a Nitro 3.3 (Hennig vs. Jarrett and typical NWO finish) to a Raw 2.2 (first half of Cactus Jack vs. Helmsley). The second half of Cactus vs. Helmsley, despite it being an excellent match and Nitro ending, still only drew a 2.2 and the unopposed rating grew only to a 2.3 for the Michaels interview and Undertaker confrontation and 2.5 for Bret vs. Goldust main event.
OCTOBER 27
With the Monday Night ratings war still being the hot topic of discussion and comparisons within the industry, at least in the US, a secondary set of question which hasn’t been answered has come up. Who draws what ratings and why?
Wrestlers have tried to talk about who individually draws what to prove who is over, and who isn’t, bookers have done the same, and management theoretically pores over the quarter-hours trying to figure out what lesson exactly the viewing patterns of the public is telling them about which individual wrestlers.
Like most of pro wrestling, lots of talk. Lots of figures quoted without understanding. Almost no research.
With the start of the fall season at the beginning of September, we’ve been compiling all the quarter hours and who was in them in a key position. There are many ways you can do ratings for individuals, but the decision was made that the best is to judge based on how the ratings went up or down as compared with the previous quarter. Obviously if there is a huge audience watching, getting a big rating for a quarter is easier than if you start out. The quarter hour differences, pluses and minuses, tell if more people were tuning on then tuning out when this personality—and this is a personality driven business—was the key part of the show.