John Cena had a problem. The effective protagonist of the WWE, the largest professional wrestling organization in the world, was in trouble. Granted, by his standards, it was a minor affair: a young upstart named Dolph Ziggler, a former collegiate wrestler turned arrogant show-off complete with curly locks of bleach-blonde hair had, in the course of their feud, impugned John Cena’s dignity. Compounding matters, Ziggler had recently taken on a spurned would-be lover of Cena’s, A.J. Lee, as his valet, making the matter all the more personal. Faced with this escalating personal conflict, John Cena, ever the bellwether of morality in the WWE, did the honorable and just thing.
Standing in the middle of the ring, he taunted his foes, knowing that by the rules of conduct in pro wrestling, they would have no choice but to appear to answer those challenges. Sure enough, they did. And then John Cena, the brightest star of them all, ordered a ton of feces dropped directly on Ziggler and Lee, because in the WWE, no less can be expected from heroes.
How did it get to this point? While no one would ever accuse professional wrestling of being a “classy” activity, performers literally scrabbling around in (staged) feces is probably several steps beyond what the layperson envisions when thinking about wrestling. The answer to how wrestling reached its unprecedented cultural valley has more to do with WWE’s principal owner, Vince McMahon, and his growing dissatisfaction at forever being on the periphery of cultural acceptability. It’s been argued that the story of wrestling is the story of American capitalism. The larger issue is that the story of wrestling is one all-too-familiar in American culture: that of new money coming into conflict with old money, then lashing out at a culture that refuses to accept its success as legitimate.
In early 2014, WWE was winding up its previous television deal with NBC Universal and in the process of negotiating a new one. Eager investors were bullish on WWE, calling it the hottest media tech stock. Their optimism seemed reasonable: WWE programming is not only consistently at or near the top in aggregate cable viewers, but also enjoys similar ranking when it comes to the desirable 18-49 age group. Per the company’s own site, WWE programming reaches 15 million weekly unique viewers. For contrast, a recent episode of cable’s megahit “The Walking Dead” topped out at 14 million, though in fairness TWD is a one-hour show vs. the seven hours of WWE programming available weekly. Then again, WWE has the advantage of its three-hour flagship show, Monday Night Raw, being live and thus relatively DVR-proof almost every week, an important consideration for advertisers in the digital recording age. Whatever one may think of the product, it would be hard to describe WWE’s audience as anything other than enormous.
Further, other sports/entertainment television packages negotiated in previous years dramatically increased in total value. The NFL, for example, nearly doubled the annual value of its television rights between its 2006 ($3.1 billion) and 2014 ($5 billion) deals. Smaller deals in local markets for individual teams saw similar increases, with the NBA’s Los Angeles Lakers signing a $5 billion deal in 2012 and MLB’s Texas Rangers signing a $20 billion deal with Fox Sports Southwest in 2010.
The anticipation on the part of investors was enormous. McMahon’s WWE, already a juggernaut, was poised for greatness, combining the revenue streams of basic cable, pay-per-view events, a budding film division, and a subscriber-based streaming content service. All it had to do was sign a television contract that valued at several multiples of its previous deal. Stock prices soared with McMahon’s net worth easily cresting the billion dollar mark.
Stock price of WWE, January 2011 – March 2014. Source: Google Finance
In mid-May, the NBC deal was finalized for a total well short of market expectations. In the span of a day, the stock fell from nearly $20/share to barely $11, a 43 percent drop in value. Overnight, McMahon lost $357 million as his stock tumbled down to pre-hype valuations. Cast in this new light, all of WWE’s holdings became suspect.
Stock price of WWE, March 2014 – May 2014. Source: Google Finance
This should not have happened. Sure, the market gets things wrong all the time, but it seemed quite reasonable that given WWE’s reach, its ratings, and the television deals signed by sports/entertainment companies in its competitive set, WWE would also cash in. That it didn’t happen speaks volumes about what advertisers think of McMahon’s product and his audience.
What is that audience? By and large, it’s likely not as you envisioned it save for one critical factor. Per comScore analytics, we can examine the web demographics of not only WWE, but also each of the other entities in its competitive set. Note that these are web demographics; and web presence tends to skew differently than television demographics (the biggest difference being that web demographics across the board tend to understate the proportion of the very young). Regardless, these metrics make a good relative reference point in comparing WWE to its competitors, if not an absolute one.
For a sport that many associate with giant brutes beating one another up, and where women only appear as accessories for leading males or as slightly more athletic strippers, that stereotype doesn’t really come into play when it comes to gender splits.
By a significant margin, the NFL, NBA, and UFC are far more male-dominated than the WWE. For all the (completely justified) examples of sexism present in professional wrestling, the fact remains the sport has been more successful at recruiting a gender-neutral audience than many of its competitors.
The comparison with the NFL is noteworthy. Heading into this season, the NFL seemingly couldn’t get out of its own way, responding to horrific off-field actions by its participants with tone deaf and inappropriate actions on the public relations front. Let’s not forget that the NFL’s initial response to Ray Rice punching his fiancée unconscious was to suspend him for 2 games – a lesser suspension than those levied to players whose infractions were merely smoking marijuana. It wasn’t until the Rice video — which the league knew of in some capacity — leaked to the public that he was suspended for the entire year. In comparison, while WWE hardly has a spotless record when it comes to gender relations, it manages to at least remain competitive within this key demographic.
The NFL is a juggernaut managing to thrive despite repeatedly shooting itself in the foot. Its perceived attitude toward women, its negligence of player health in regards to concussions, and its avoidance of the Washington Redskins team name debate all contribute to a growing movement among fans to quit watching the NFL. One should take note when one of the league’s biggest advertisers expresses serious reservations about continuing its partnership with the NFL. In comparison, WWE seems a far safer spot for advertisers. At least there, the violence is only staged.
Cynically, one could argue that WWE is merely appealing to its bottom line: keeping a TV-PG rating so that it can continue its partnership with Mattel. Nevertheless, regardless of motivations, the fact remains that WWE has been a far better steward toward its advertisers than the NFL, yet it suffers far more in terms of revenue.
Put simply, WWE has a large and reliably attentive audience, cutting across both genders and scoring very well in the age groups marketers care most about. It’s also not invincible and thus far more incentivized to form lasting partnerships with advertisers. But then we arrive at the crux of the problem: it’s not that WWE fails to reach a large audience, or that the large audience isn’t in the most desirable age group for marketers.
The problem is that they’re poor.
Over 1 in 10 WWE visitors has a household income less than $15,000 annually. Over 1/3 of its visitors make less than $40,000—a proportion almost double any of its competitors. Meanwhile, the majority of its competitors’ viewers make more than $75,000 annually, and this makes all the difference: to advertisers, to McMahon, and to American culture. If WWE is the story of capitalism, then a significant chapter of that story needs to involve poor-shaming.
Advertisers correctly recognize that wrestling fans, on average, don’t buy luxury cars or drink expensive alcohol. Yet there’s a stigma associated with professional wrestling, one that goes well beyond advertisers. It is a stigma that typically bars both its producers and its consumers from outside-the-ring success, and why discussing the previous night’s match cannot be done in polite company. There’s no social stigma that comes from admitting one is a baseball fan or watches SportsCenter with breakfast; that’s very clearly not the case when it comes to wrestling.
But, of course, demographics and public perceptions are mutable. 18 years ago, Ultimate Fighting Championship (UFC) was considered by many to be, in the words of Senator John McCain, “human cockfighting.” Banned in 36 states, it appeared that UFC had little hope of making it into the mainstream. And yet, one generation later, UFC is a multi-billion dollar company, only one state (New York) still bans Mixed Martial Arts, and even that seems unlikely to last much longer, as only one house still opposes legalization. Even Senator McCain has changed his tune, saying that he would have tried MMA had it been around when he were younger. There were a multitude of factors that allowed UFC to transform its reputation, but there is no denying that despite starting from a position far weaker than even WWE found itself in, it turned into a sports juggernaut.
Why can’t WWE do the same? Why can’t it shed its low-class image and transform into something more, for lack of a better term, “legitimate?”
No doubt there are many reasons why WWE has found itself trapped in a proverbial demographic well, but one reason that looms larger than any other, and is by far the most intractable, is the self-defeating tendencies of McMahon himself. For over 30 years, McMahon has been forced to deal with a business world that treats wrestling as little more than a televised carnival show designed for the dregs of society. For over 30 years, McMahon has often gone to great lengths to try and prove them right.
After three decades of his leadership, it’s clear that the one person most ashamed and troubled by WWE’s low-income demographics is Vince McMahon. Once one realizes this, it explains almost all of WWE’s position on the periphery of polite society.