Vince McMahon Should Pull The Plug On The WWE Network, Says Some WWE Officials
Vince McMahon should pull the plug on the entire WWE network in order to save the company and stop the fall of the WWE stock according to rumors leaking out about the mood of the WWE executives at the moment.
In a related report by The Inquisitr, Mick Foley says Vince McMahon, Triple H, and Stephanie McMahon should hide for a while to keep the WWE stock from tanking further. But McMahon’s WWE ownership is so high he cannot be forced out of the company as some have claimed might be possible. Vince retains 81 percent of voting shares stemming from his personal ownership of 57 percent of class A shares, and 87 percent of preferred voting class B. But while it’s said he doesn’t care too much about losing $350 million in one day Vince is supposedly being driven “absolutely crazy” about how so much attention has been given to the recent WWE stock drop.
The latest rumor about Vince McMahon killing off the WWE Network comes from Mike Johnson of PWInsider.com, who is reported to have described the situation this way:
“The mood is so bad… that some people within WWE were even openly speculating that Vince McMahon may have to pull the whole plug on the WWE Network soon, to stop the bleeding before it gets out of control.”
But is this even a real possibility or is this just a case of WWE officials venting their frustration? After all, the WWE originally wanted to have one million WWE Network subscribers by time WrestleMania 30 rolled around, but in reality they only reached about two-third of that goal. The reason the WWE stock rose is because they convinced investors they could reach two million WWE fans based upon the assumption that 52 million households have an “affinity” for the WWE, which means they just had to convince around four percent to sign up. The good news is that, based upon our own estimates, the number of WWE Network subscribers could reach the first magical number by year’s end. We also believe that a WWE Network free trial which includes a PPV event could be the method by which fans are convinced to sign up.
Still, Vince McMahon has not been doing that great of a job convincing investors he’s right about his business plan. Earlier this week the WWE gave an investor conference call which included both Vince and Chief Strategy & Financial Officer George Barrios. McMahon admitted that launching the WWE Network right before WrestleMania 30 probably hurt negotiations with NBC Universal, but he felt they needed to launch then or wait another year until right before WrestleMania 31. At this point they’re shooting for 1.5 million subscribers in 2015, which is important because it was previously estimated the break-even point was one million.
This brings up an interesting point because the profitability of the WWE Network is influenced by the NBC deal, which took the WWE from $90 million to $150 million. Although the increased cost of maintaining the WWE Network streaming platform caused the WWE to post a first quarter loss of $8 million in 2014, the new TV deal increases the WWE income by about $60 million per year, which is a very significant 70 percent raise. Previously, the WWE Network would have lost them around $20 to $30 million for the year based upon the assumption that their subscriber numbers increased at a slow rate during the remainder of 2014. Now the WWE might expect to profit around $30 to $40 million, which gives the WWE Network a lot of breathing room.
Of course, these rough estimates assume that WWE fans keep their membership after the initial six months are up. Many fans have expressed how upset they are at the current limitations of the WWE Network app, with the most notable being how even Hulu Plus gives easier access to Monday Night RAW and Smackdown than the WWE’s own platform. But even if the WWE doesn’t reach 1.5 million subscribers as expected, the NBC deal should keep their budget in the black.
Are you surprised that some people were supposedly saying Vince McMahon should give up on the WWE Network?