Does All In’s Success Prove WWE is Finished?
The success of the All In show is bad news for World Wrestling Entertainment (NYSE: WWE) and old media.
Promoter Cody Rhodes proved anybody can put on an elaborate show, attract big name talent, draw a large crowd, and make money with minimal resources. Cody apparently had nothing but a little social media savvy and a lot of friends in the wrestling business; when he launched All In.
Rhodes and his partners, the Young Bucks had the advantage of being young and hungry. Matt Jackson, one half of the Bucks remembers not being able to pay for a biscuit sandwich at Popeye’s a few years back, The Ringer reported.
Yet Rhodes put on a better show than anything the WWE has done in a long time. I watched most of All In on streaming video and it was great.
The matches; especially Marty “the Villain” Scurl vs. Kazuchika “the Rainmaker” Okada, were so good I did not get up. I watched four whole matches in one sitting; I cannot remember when I sat through an entire WWE match.
Sorry Vince, Cody Rhodes has a Better product than WWE
All In proves Rhodes’ upstart alliance of wrestling promotions is a major threat to WWE.
Rhodes and company, have a better wrestling product that is more entertaining than Vince’s show. Refreshingly, there was lots of tremendous wrestling action, and nothing that insulted my intelligence.
Importantly, the matches honored wrestling legends without disrespecting today’s hardworking superstars. The presence of guys like Diamond Dallas Page, Bubba or “Bully Ray” Dudley, and Lanny Poffo took nothing from the events.
After watching All In I can see how Rhodes and company easily sold 10,541 tickets and made $450,000, according to Forbes contributor’s Alfred Konuwa estimate. If Konuwa is right, All In attracted the largest crowd to attend a non-WWE US wrestling show since the old World Championship Wrestling (WCW) folded in 2001.
Strangely, the numbers were not the most impressive thing about All In. Instead, it is the talent Rhodes attracted that bodes ill for Vincent K. McMahon Jr. and his brood.
All In Was the Biggest Non-WWE US wrestling show since WCW
All the biggest active wrestling attractions not working were for WWE were at All In. The card Rhodes lined up included:
- New Japan Pro Wrestling IGWP Heavyweight Champion Kenny “the Cleaner” Omega.
- Lucha Underground and TNA star; and Mexican Champ, Pentagon El Zero M (AKA Pentagon Jr, Penta, or Pentagon Dark).
- Former WWE Champion and Lucha legend Rey Myesterio Jr.
- The top tag team in the world today and IGWP Champs the Young Bucks.
- Former WWE Champion Chris Jericho.
- New Japan superstar Kazuchika “the Rainmaker” Okada. The winningest IGWP champ in history
- Ring of Honor Champion Jay Lethal.
- Arrow star Stephen Amell
- WCW champ turned Yoga enthusiast Diamond Dallas Page
This was the biggest non-WWE wrestling card in North America since the end of the Monday Night War in 2001. The Kenny Omega/Pentagon event was the biggest indie match held in the United States since the 1980s.
The Cleaner/Penta matchup looks like the start of a legendary wrestling feud that will go on for years. Marty “the Villain” Scurl established himself as a superstar with the Okada match. Hopefully Scurl will not sell out to WWE and get sanitized into oblivion like Finn Balor was.
How YouTube Helped Cody Rhodes and the Bullet Club Beat Vince Vince McMahon
Extraordinarily, All In was put together by three guys with a little social media savvy, nothing to lose, and some guts; Rhodes and the Young Bucks (Aka Matt and Nick Jackson). The Bucks reportedly drove thousands of fans to All In with a homemade You Tube show called Being the Elite.
“Being the Elite is the reason why this is happening,” Scorpio Sky told The Ringer. Scorpio Sky wrestled in the All In pre-show; and is a Being the Elite series regular as part of the SoCal Uncensored, or SCU, stable. Being the Elite is a celebration of the Bullet Club, a movement of renegade wrestlers opposed to WWE.
Moreover, Alphabet (NASDAQ: GOOG) is responsible for All In’s success. All In demonstrates that YouTube is a more powerful media than cable TV. Being the Elite and all the video of New Japan, Ring of Honor, and other shows on YouTube made All In possible.
Therefore, WWE’s focus on cable TV and Facebook (NASDAQ: FB) video is probably a waste of time of and money. A smart move for WWE would be to cancel Miz & Mrs. and spend the money saved on hundreds of YouTube videos.
Yet the All In card was so good, WGN America offered Rhodes and company an hour of airtime in front of 80 million homes on basic cable. They filled it with the jokingly named Over Budget Battle Royal, which will probably serve as the basis for a TV show.
Equally impressive is Starrcast; a wrestling fans’ convention held in conjunction with All In. Forecasts called for Starrcast to attract 800 fans to the Hyatt Regency Hotel in Schaumburg Illinois, it lured 8,000 marks into the building.
A New Type of Wrestling Show
The combination of Starrcast and All In sets the template for a new type of wrestling show.
The show is a hybrid of Comicon and Wrestlemania that is repeatable all over the world. If Rhodes and the Jackson brothers are smart, they will take their show on the road to New York, Los Angeles, Toronto, Las Vegas, Birmingham (UK), London, Vancouver, Miami, Dallas, Sydney, Tokyo, and Melbourne.
Rhodes is reportedly planning a second event; possibly called Ten Pounds of Gold for Madison Square Garden; the historic home of the WWE. I have to wonder how Vince McMahon will react to that.
Intriguingly, New Japan and Ring of Honor; two of the promotions involved in All In reputedly have a show booked for the Garden next year. Cody Rhodes wrestles in both New Japan and Ring of Honor.
Rhodes did his part by mouthing off to reporters and ranting on social media. All -In attracted some corporate sponsors; seedy restaurant chains Cracker Barrel and TGI Fridays. Most importantly, Rhodes and his associates demonstrated they can produce professional grade streaming video.
Rhodes generated a lot of great old-fashioned publicity with internet speculation. Speculation that major WWE superstars would defect and appear at All-in helped ticket sales and streaming video numbers.
All in’s Success is Bad News for WWE
The three managed to put together a show as good as anything WWE; or New Japan, is doing with no corporate structure, bank financing, bigtime media appearances, or cable TV deals.
All In’s success is bad news for WWE because it proves a bunch of wrestlers can walk out the door, tweet, and put together a show that can compete with the McMahons. Rhodes and the Jackson brothers are likely to find a few interesting offers on their Telegram accounts this week.
Vince, Stephanie, Triple H, and Shane will have a hard time keeping people; like A.J. Styles, Auska, Kevin Owens, Charlotte Flair, Daniel Bryant, Seth Rollins, Finn Balor, the Usos, Jindar Mahal, Bobby Lashley, and possibly Roman Reigns, in the building after All-In.
A likely outcome is that a lot of WWE superstars will demand and get bigger paychecks. A nightmare for Vince is a revolving door like that of the 1990s; when superstars jumped back and forth between WWE and WCW, for bigger and bigger paychecks.
Can Cody Rhodes Really Resurrect the NWA?
Cody smartly acquired his own title; the historic NWA belt once held by his father the legendary Dusty “the American Dream” Rhodes, by defeating Nick Aldis. Therefore, Rhodes can put on more pay per views and launch his own TV show if he wants.
Logically, Cody can use promises of a historical title belt to lure underappreciated stars; like Kevin Owens, to his new National Wrestling Alliance (NWA). Such legends as Rick “the Nature Boy” Flair held the NWA belt; and Dusty Rhodes, in its heyday.
Rhodes will presumably defend the NWA belt at the second event Ten Pounds of Gold in New York. A smart move will be to have a big name (Kevin Owens?) who was recently active in WWE challenge Rhodes for the NWA gold.
Tellingly, Rhodes and company achieved all that without a corporate infrastructure or connections in the old media. They could attract a large crowd, lure in a good card, and generate vast amounts of effective publicity without a single network TV appearance or a corny cable TV show.
Worst of all, Rhodes and the Bucks did it for a fraction of what the McMahons would have spent. That is sure to attract the attention of media executives in today’s world of falling advertising revenues.
Is WWE Making Money?
Independent promoters like Rhodes are a threat to the World Wrestling Entertainment (NYSE: WWE) because that company is making little money.
The WWE reported an operating income of just $21.21 million and a net income of $9.95 million for 2nd Quarter 2018. It achieved those numbers on revenues of $281.54 million and a gross profit of $82.65 million.
Revenues grew by 31.2% during 2nd Quarter, increasing from $187.72 million to $281.54 million. Likewise, the gross profit increased from $67.66 million to $82.65 million in the same period.
Unfortunately, the additional revenue and profit might have come from WWE’s ridiculous Saudi Arabia pay-per-view and not its ability to attract European or North American wrestling crowds. The operating income provides a strong sign this was the case.
The 2nd Quarter Operating income of $21.21 million was down from the $21.75 million reported in 1st Quarter 2018. The $9.95 million net income was down from the $14.84 million reported in 1st Quarter 2018.
Those figures indicate that WWE’s business plan of using cable TV shows and reality television to drive fans to wrestling is not working. Tellingly, there is evidence those marketing strategies are driving away younger wrestling marks.
The WWE reported a healthy free cash flow of $63.36 million and an operating cash flow of $74.13 million for 2nd Quarter 2018. Therefore, WWE has the resources to retool its product those fans.
Unfortunately, recent WWE shows indicate nobody in the organization has the creativity or will to undertake such restructuring. A good place for WWE start is to abandon reality TV; and movie, production and concentrate on producing better wrestling shows.
Pushing hardworking stars like A.J. Styles and the Miz; rather than that egomaniac Brock Lesner, is a smart move WWE will not take. Finding some way to ditch Rhonda Rousey makes sense. I cannot see what she does for WWE or women’s wrestling.
WWE stock is Overvalued and its Dividend Stinks
Mr.Market overvalued stock at $85.719 a share on 5 September 2018. I think the 12¢ WWE dividend; next scheduled for a payout on September 25, 2019, is in danger.
The WWE dividend is definitely a poor deal for investors. There was no payout increase last year, a dividend yield of .55%, and a payout ratio of 55.2%. The lack of an increase is a sure sign, WWE is losing value.
We will not miss the WWE dividend if disappears. Investors need to dump WWE stock now. Cody Rhodes and the Young Bucks are just proven this company’s business is no longer relevant.
I have to wonder when Mr. Market and TV executives will notice WWE’s irrelevance. The fans know, the wrestlers know, the McMahons know, but I guess the TV executives will only notice when they can longer sell advertising for Raw and Smackdown.
Sell WWE stock today if you own it and stay away from this company unless you plan to short it. The success of All In proves WWE will have trouble making money in the years ahead. I advise investors and wrestling fans to avoid World Wrestling Entertainment (NYSE: WWE).
