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Is WWE Changing its Monetization Strategy?

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Fans of the WWE were able to purchase WrestleMania 36 through the company’s direct-to-consumer streaming service, WWE Network. They also had the option of buying the annual pro wrestling extravaganza via or within the Fox Sports and Fox Now apps for the first time.

Fox Corporation gained the rights to sell WWE PPVs as part a larger deal for the broadcast rights to the SmackDown franchise, but media insiders believe WWE’s decision to include tentpole events in that transaction is indicative of a pending change in corporate strategy.

Author of the blog Yannick Ramcke told JohnWallStreet that “as it stands, WWE is assuming all of the financial risk when it comes to their PPV business. With a monthly subscription service, where the subscriber can cancel in a matter of seconds, losses immediately trickle down to the bottom line. The company would eliminate much of the volatility in earnings and could generate much more - and secure - revenue by returning to a wholesale model.”

Ramcke envisions a future where WWE sells its content library to a 3rd party OTT provider and the promotion's monthly live PPV events are placed behind a secondary paywall, akin to what ESPN+ has done with select UFC shows.

Aligning with a streaming service would give WWE both the large scale audience it seeks and the customer access it needs to maximize PPV revenues. Ramcke explained that “the main challenge for any of these [league-owned] D-T-C plays is their inability to reach viewers beyond the hardcore fan. [While WWE has the benefit of weekly linear distribution], the company is not reaching the casual sports fan with their most monetizable content and it’s limiting the business’ financial upside and predictability.”

The WWE will find a number of interested partners should it decide to go all-in on an OTT + secondary paywall strategy. ESPN+, Peacock and Amazon Prime would all benefit from having WWE content on their platforms. 

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