WWE UK Network Launch Is Delayed at the Last Moment

On Thursday, October 30, WWE released third-quarter results and announced several prominent changes to the WWE Network.

Going forward, there would be no more six-month commitments. The company eliminated the $12.99 pricing tier. And in a bid to grow the subscriber rolls, the entire month of November, including Survivor Series, is being offered without charge to new subscribers.

On the international front, the second paragraph of the press release highlighted that WWE "[continues] to develop the international platform for WWE Network and [plans] to make the network available in the U.K. on an OTT (over-the-top) basis in November."

After August's ambitious global launch of the WWE Network excluded the United Kingdom, this was important news.

As Vince McMahon said on the conference call: "As far as the United Kingdom is concerned, we finally are going to make our move."

The stage was set. WWE soon clarified that the WWE Network would be available in the United Kingdom starting Monday, November 3 at 8 p.m. GMT.

Fans and WWE Superstars alike excitedly tweeted about the upcoming U.K. launch.

Yet, after all that hullabaloo, U.K. fans still do not officially have access to the WWE Network.

What happened? A mere 20 minutes before the scheduled launch, WWE pulled the plug.

It was a very surprising development.

News broke as the WWE Network twitter account tweeted that the U.K. expansion of the WWE Network was being delayed indefinitely.

Fans were gobsmacked.

Soon after, all WWE.com mentions to Monday's planned U.K. network launch were removed.

Instead, visitors were redirected to a page that simply read, "The launch of WWE Network in the U.K. has been delayed until further notice. WWE would like to thank our fans in the United Kingdom for bearing with us."

History of False Starts

It's been a frustrating ordeal for WWE fans in the United Kingdom. Monday's last-second pause is only the most recent chapter in the U.K. launch saga.

In the original WWE Network launch plans from January, the United Kingdom was part of a select group of "Phase I" countries (along with Canada, Australia, New Zealand, Singapore, Hong Kong and the Nordic countries) slated for initial WWE Network international expansion in late 2014 or early 2015.

Still, the United Kingdom was not part of the global launch of 170 countries and territories of the WWE Network on August 12. Instead, the WWE press release noted that "The network is expected to be live in the U.K. by this October."

However, plans changed again in late September when WWE announced that the United Kingdom network launch date would again be pushed out, and fans were told to wait until November. 

The reason provided? WWE said that the delay was to provide time for "discussions with potential partners."

According to F4Wonline.com, the cause of the most recent delay was again "ongoing negotiations". 

U.K. Importance

WWE is playing a very delicate balancing act because the United Kingdom is a very important market to the WWE.

According to the company's investor presentation, WWE considers the United Kingdom to be one of the company's four key markets (with United States, China and India being the other three). 

In the 2013 annual report, WWE reported that the United Kingdom was its largest international market. The company runs more than two dozen live events in the U.K. every year. Last year, the U.K. generated $36 million in annual revenue for the WWE.

As such a strategically important marketplace, WWE is carefully balancing its desire to grow the WWE Network with its complex relationships with media conglomerates within the U.K.

Over-the-Top or Not?

WWE is always looking for new partnerships and profitable revenue streams. It's a common refrain on the conference calls.

While these U.K. delays are understandably frustrating for fans, it's important to realize that WWE is struggling with a costly WWE Network whose subscription base is only growing tepidly. For instance, last quarter, according to the company's 10-Q filing, WWE only added 28,476 international subscriptions. 

Lackluster growth suggests that either many international fans aren't interested in the WWE Network or they have already found means to access the network even before it was officially available in their country.

As I detailed in October, the fastest growing part of WWE's revenue stream has been WWE's TV rights deals. This includes WWE's latest renewal with BSkyB. That deal is set to begin in 2015. It also included a provision to begin offering all WWE pay-per-views on Sky Sports Box Office.

Last year, WWE generated $82.5 million in worldwide pay-per-view revenues, including $15.6 million in non-domestic pay-per-view revenue. Launching the WWE Network has severely diminished traditional pay-per-view revenue from cable and satellite providers.

If the WWE Network launched in the United Kingdom on the over-the-top basis, Sky Sports would likely generate very little revenue from events such as Survivor Series.

There would be a bold price difference with Sky Sports Box Office at £14.95 (about $24) and a WWE Network subscription at less than £6.25 ($9.99). (That's even before you factor in that WWE is giving away November access, including the live Survivor Series event, for free to new subscribers.)

That's why WWE's previous lucrative television agreements could play a significant role in these U.K. WWE Network delays.

The Canada Model

WWE recently in an interesting strategy departure when it came to the WWE Network. TV rights fees represent a crucial component to WWE's future financial growth. The company recently reported that it expects its new key television agreements to deliver "$100 million in revenue growth" by 2018.

The delays in the U.K. are reminiscent of another recent shift in WWE Network roll-out strategy.

When WWE announced a new 10-year deal with Rogers Communications in Canada, that deal included the "right to distribute WWE Network as a premium linear channel".

When analysts asked why WWE had decided to forego over-the-top distribution and pursue a premium linear channel in Canada, McMahon just said that it was "basically an offer that we couldn’t turn down."

And that's what WWE is looking for in the United Kingdom—the right offer. While U.K. fans wait, WWE is seeking the deal that's going to be best for its long-term business in that strategic country. This instance of the negotiating game has certainly come down to the wire.

For continuing coverage of the WWE Network and financial results, be sure to follow me on Twitter: @mookieghana