Analyzing Brock Lesnar's Value in the Era of the WWE Network

Chris Harrington@mookieghanaFeatured ColumnistAugust 14, 2014

Brock Lesnar and his advocate, Paul Heyman.
Brock Lesnar and his advocate, Paul Heyman.Associated Press

On Sunday, August 17, Brock Lesnar will headline this year's SummerSlam event as he challenges John Cena for the WWE World Heavyweight Championship. 

This will be Lesnar's first professional wrestling match since April, when he shocked the masses and snapped The Undertaker's legendary WrestleMania winning streak.

Since his return to the WWE in April 2012, Lesnar has only wrestled a few times each year. His selective schedule is driven, in part, by his exceptional cost. This month's WWE match will be his eighth in the past 29 months.

Brock Lesnar's WWE career since 2012
Extreme RulesApril 29, 2012John Cena defeats Brock Lesnar (Extreme Rules)
SummerSlamAugust 19, 2012Brock Lesnar defeats Triple H (No Disqualification)
Wrestlemania XXIXApril 4, 2013Triple H defeats Brock Lesnar (No Holds Barred)
Extreme RulesMay 19, 2013Brock Lesnar defeats Triple H (Steel Cage)
SummerSlamAugust 18, 2013Brock Lesnar defeats CM Punk (No Disqualification)
Royal RumbleJanuary 26, 2014Brock Lesnar defeats Big Show
Wrestlemania XXXApril 6, 2014Brock Lesnar defeats The Undertaker
SummerSlamAugust 17, 2014Brock Lesnar versus John Cena

Evaluating Lesnar's Cost

When Brock Lesnar returned in 2012, he signed a one-year deal. It was rumored by Cageside Seats to be $5 million for three pay-per-view matches. In the Wrestling Observer Newsletter, Dave Meltzer noted (subscription required) that Brock's deal did include "a certain number of TV appearances leading up to the shows."

It's an extravagant amount. It was the sort of money that one would expect for only the most elite stars, such as The Rock. While top stars like Cena may earn more in an annual basis, the idea of Vince McMahon paying so much for just a trio of matches stunned many fans.

Unlike Lesnar's UFC fights or his 2003 WWE contract (section 7.2c), according to Meltzer (subscription required), Brock's current deal is a flat-rate deal. That means he doesn't get a cut of the pay-per-view or WWE Network subscription revenue.

According to Mike Johnson of PWInsider.com, in late January 2013, Lesnar agreed to a two-year extension. That keeps him working for McMahon's company through Wrestlemania 31 in Santa Clara, California.

So over three years, Lesnar would earn an estimated $15 million in base pay. (I assume he'll receive some additional money from merchandise sales.)

In rough terms, his per-match fee has been approximately $1.7 million.

So time to tackle the question at hand: Is Lesnar really worth it?

Tallying the Score

First, let's look at WWE pay-per-view buys 2009 from through 2013:

WWE Pay-Per-View Buys (2009-2013)
PPV Buys (in 000)20092010201120122013
Post-Wrestlemania PPV182 (116)201 (112)216 (108)271 (159)245 (137)
SummerSlam369 (229)349 (209)311 (180)392 (296)332 (207)
WrestleMania975 (605)885 (495)1,124 (679)1,219 (715)1104 (662)
Royal Rumble450 (288)465 (259)476 (281)483 (299)579 (364)
A-level PPVs351 (218)353 (198)366 (281)364 (240)363 (222)
B-level PPVs221 (136)193 (107)178 (103)205 (124)203 (131)
Domestic PPV Price$39.95$44.95$44.95$44.95$44.95
Domestic WM Price$49.95$49.95$54.95$54.95$59.95
Analysis by Chris Harrington based on data from Wrestling Observer

Notes on the above table:

  1. Data was extracted from the table at indeedwrestling.blogspot.com (based on information printed in Wrestling Observer Newsletter issues).
  2. Buys are presented in the form: Worldwide buys (North American buys).
  3. North American buys are a combination of buys in United States, Canada and Puerto Rico.
  4. The post-WrestleMania pay-per-view has been Extreme Rules since 2010. However, in 2009, it was actually Backlash.
  5. A-Level pay-per-views include Royal Rumble, SummerSlam and Survivor Series events.
  6. B-Level pay-per-views include remaining pay-per-views that were not A-level or WrestleMania.
  7. Price for the pay-per-view is for U.S. standard definition (SD) price. When available, High definition (HD) typically cost about $10 more.
  8. Brock Lesnar appeared at Extreme Rules in 2012 and 2013, WrestleMania in 2013, SummerSlam in 2012 and 2013.
  9. The Rock appeared at three WrestleManias (2011, 2012 and 2013) and the 2011 Survivor Series.

I calculated a multiyear regression that takes into account pay-per-view price, type of pay-per-view (A-level, B-level or WrestleMania) and trending averages with separate Rock and Lesnar variables. The informal results suggested that putting Lesnar on a WWE pay-per-view was worth about 54,000 additional worldwide buys. 

With the WWE receiving about $20 per pay-per-view order (see "average revenue per buy" in the 10-Q financial statement), generating about 54,000 worldwide buys is worth approximately $1.08 million. While that's a hefty sum, that's still less than Brock's hefty $1.7 million price tag.

Let's break it down by each specific event.

Brock's Drawing Power Outside of WrestleMania

There's evidence of Lesnar's drawing power at the first event he appeared at during his current run, Extreme Rules 2012. At 271,000 worldwide buys (159,000 North American buys), this was a substantial improvement over 2009-2011 numbers which averaged 200,000 worldwide buys (112,000 North American buys).

It appears that his match with Cena perked things up remarkably (36 percent improvement over the three-year trend). If we attribute the 71,000 worldwide buys to Lesnar, that's nearly $1.42 million in added pay-per-view revenue for the WWE. 

Brock's SummerSlam 2012 match against Triple H did garner more pay-per-view buys than the three previous years of SummerSlam. At 392,000 worldwide buys (296,000 North American buys), Lesnar's match was about 49,000 worldwide buys over the three-year average. That increase would equal about $980,000 in additional pay-per-view revenue.

Similarly, Brock's cage match with Triple H in 2013 at Extreme Rules (245,000 worldwide buys) was vastly above the pre-Brock average (200,000 worldwide buys). At 45,000 additional worldwide buys, WWE would have earned about $900,000 in added pay-per-view revenue due to Lesnar wrestling at the event.

Things get much fuzzier at SummerSlam 2013, where Lesnar wrestled CM Punk. The main event promoted for that show was actually Daniel Bryan challenging Cena. In the end, SummerSlam 2013 recorded 332,000 worldwide buys (207,000 North American buys), which ended up second-lowest in the past five years.

McMahon memorably remarked that he felt SummerSlam 2013 was a "swing and a miss." In this case, it doesn't seem like Lesnar can really be credited with driving additional pay-per-view buys or generating incremental pay-per-view revenue for the WWE.

Brock's appearance at 2014's Royal Rumble is also a strange case. The event was up to 517,000 worldwide buys, which is an improvement over the 469,000 worldwide buys average from 2009-2012. However, it's highly debatable how much credit really belongs to Big Show versus Lesnar as a major draw on that show. In the end, the match was a two-minute squash, with Lesnar continuing to hit Big Show with a chair for several minutes after the match was over. If we credit him with a quarter of the gain, that would be around $240,000.

Brock's Drawing Power at WrestleMania

WrestleMania is WWE's annual juggernaut. Similar to Royal Rumble, the name itself sells a lot of buys. Because of the loaded aspect of the card, it's quite difficult to break out which main events were the biggest draws. It's clear that having The Rock host and wrestle on WrestleMania cards in 2011, 2012 and 2013 were integral factors in pushing WrestleMania buys into the 1.1 to 1.2 million range.

In 2013, Lesnar also faced off with Triple H at WrestleMania, and in 2014, Lesnar shocked the WWE Universe when he defeated The Undertaker.

2013's WrestleMania event did garner 1,104,000 worldwide buys (662,000 North American buys), which was well above the 930,000 pre-Rock WrestleMania average for 2009-2010. Some portion of the 174,000 additional buys should be attributed to Lesnar, though the lion's share likely belong to The Rock (and his opponent, Cena). If we only give Lesnar 25 percent credit for the gain, that would be about 43,500 buys. Looking at higher revenue per buy that comes with WrestleMania, that would be worth around $1 million.

2014's WrestleMania event had 690,000 worldwide pay-per-view buys plus an additional 667,287 WWE Network subscriptions. With a WWE Network subscription ($9.99 per month) being a third of what WWE's 50-50 split for a pay-per-view buy ($59.95 in SD), we can estimate that 2014 WrestleMania would have been equal to about 912,500 buys had it only been available on traditional pay-per-view. That number isn't above the 930,000 pre-Rock WrestleMania average from 2009-2010.

In total, it looks like Brock has driven additional revenue for the majority of his matches. I estimated the total gain for WWE around $4.6 million since his return in April 2012. Compared to almost anyone on the roster, that's a very healthy number. However, when you consider how much McMahon is paying Lesnar, estimated at $12 million for those seven matches, it may give one pause.

Estimating Brock Lesnar's impact on WWE PPVs since 2012
EventBaseline TimeframeBaseline Worldwide BuysActual Worldwide BuysChangeAttributionEstimated Revenue per BuyBrock's Value
Extreme Rules 20122009-2011 200,000 271,000 71,000 100% $20 $1,420,000
SummerSlam 20122009-2011 343,000 392,000 49,000 100% $20 $980,000
Extreme Rules 20132009-2011 200,000 245,000 45,000 100% $20 $900,000
SummerSlam 20132009-2011 343,000 332,000 (11,000)n/a $20 n/a
Royal Rumble 20142009-2013 469,000 517,000 48,000 25% $20 $240,000
Wrestlemania 20132009-2010 930,000 1,104,000 174,000 25% $25 $1,087,500
Wrestlemania 20142009-2010 930,000 912,500 (17,500)n/a $25 n/a
Analysis by Chris Harrington

Of course, it's always important to consider how much of a television draw Lesnar also is. While he's used sparingly, an earlier analysis I did, again using numbers from Metlzer, found that Lesnar can add nearly half a million viewers to an episode of Raw when he appears.

As television rights fees are still the lifeblood of the company (WWE around $160 million in 2013 TV rights), having characters that attract viewers is an important commodity. Still, being a TV draw is very hard to quantify into Brock's cost analysis. 

This Sunday, for Lesnar to immediately generate the $1.7 million he's being paid, his presence on the SummerSlam card would need to drive approximately 170,000 subscribers to purchase the WWE Network at $9.99 for a six-month commitment or approximately 85,000 households to order the event on pay-per-view.

That's the challenge with the WWE Network. It's a longer-term investment.

In the era of the WWE Network, does Lesnar even make sense anymore? You're gunning for continued subscriptions. While the WWE does offer one-month, no-commitment terms (dropped to $12.99 as of August 12), its vision of the service has always been about creating a steady state of constant subscribers.

Coupled with the grand international launch of the WWE Network in "over 170 countries and territories," using SummerSlam (with Lesnar) as a one-time attraction makes some sense. It's a similar strategy to what WWE adopted when it used WrestleMania 30 as a hook for attracting domestic WWE Network subscriptions. However, the mass cancellations that were recorded last quarter (128,000 accounts), throw a wrench in the plan's design.

What does it say about the future of the WWE Network if the WWE needs to keep relying on part-time stars such as Brock (or The Rock) to sell its service? If it can't develop a business model that keeps sufficient baseline of year-round subscribers, the service will collapse under the financial pressures. This project continues to be a daunting and challenging venture.

History of Big Money

It's important to recognize that Brock Lesnar has been earning significant paychecks since he graduated college. 

The Wrestling Observer Newsletter noted (subscription required) that after graduating from the University of Minnesota, Lesnar was signed to the WWF in June 2000 for a $250,000-per-year downside guarantee. He was making main-roster money while he was still in developmental at Kentucky's Ohio Valley Wrestling.

"The Next Big Thing" Brock Lesnar debuted on WWE television in March 2002. His ascent to the top was lightning quick. He won the King of the Ring tournament in June, and at August's SummerSlam, he defeated The Rock.

In July 2003, Brock signed a new contract. He was now earning a $1 million downside guarantee (see section 7.1a), which presumably put him at the very top of the pay scale.

However, it was short-lived. Less than a year later, Lesnar quit the company. According to Mike Mooneyham, Lesnar cited "burnout and a demanding travel schedule" when he decided to leave the WWE. His final match was an odd affair on March 14, 2004, against Goldberg, who also was departing the company.

Goldberg versus Brock Lesnar
Goldberg versus Brock LesnarWWE.com

After Brock left the WWE, he tried out for the Minnesota Vikings, but he was cut in August.

Frustrated with limitations from his WWE contract, Lesnar ended up filing a lawsuit against the WWE in February 2005. Lesnar's lawsuit alleged was his contract's multiyear no-compete clause was "unreasonably broad and unfair and prevents him from earning a living anywhere". The parties finally settled in April 2006.

Soon after, Brock transitioned into his second big career as a mixed marital arts competitor. 

During his time away from WWE, Brock began working overseas. Starting in 2005 with an appearance at the Tokyo Dome, Lesnar began working for New Japan Pro Wrestling (NJPW). In October 2005, Lesnar won the company's top title, the IWGP Heavyweight Championship.

While working for NJPW, Lesnar was well-paid. According to Meltzer (subscription required), he earned a reported $50,000 per match.

Meltzer also noted (subscription required) that factoring in sponsor pay and pay-per-view earnings, Lesnar was making an average of $3 million per fight in UFC.

It's clear from Brock's history that he has been on a big-money trajectory since he was the NCAA Division I national champion at 285 pounds. When you read articles about Lesnar from before he signed with WWF, it's clear that he wanted to try to go to the Olympics for wrestling or play professional football. Pro wrestling was seen as his backup plan.

Brock always had that killer instinct. As he said in a February 6, 2000 Pioneer Press article (subscription required): "I like to put a hurt on people," said Lesnar. "I'd like to go and knock heads around."

Professional wrestling won because it paid the bills. And right now, McMahon is signing the checks.

Without the huge money, it's just not feasible that Brock Lesnar would come back to the WWE. And right now, he is helping the company. Whether he's really managed to "pay for himself" is entirely another question.

According to my analysis, he's valuablejust not "$15 million for nine matches" valuable.

What do you think? Should WWE be investing this much in a single star? Sound off in the comments below!

Follow me on Twitter @mookieghana for more Wrestlenomics.