WWE Rumors: Is Abandoning Most PPVs Going to Save or Kill the Company?

The upcoming launch of the WWE Network has a lot of people talking—and not really for the right reasons. 

There are many pundits who believe that Vince McMahon is taking a big risk with the channel. They've even gone so far as to say that this latest project could be the one that puts the WWE in serious financial jeopardy. 

This is certainly true. If the company doesn’t get the clearances for the WWE Network, then McMahon and the WWE empire take a huge hit. 

The worst-case scenario would be a big problem with clearances. So, what if the company has another catastrophic problem in the form of its new pay-per-view philosophy? 

The latest report out there, by Sports Business Daily Journal, breaks down the new PPV model we could see once the WWE Network launches next year. Here's the SEScoops.com breakdown of the article.

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The article states that “most, if not all” of WWE’s annual 13 pay-per-view events would migrate to the WWE Network. Early surveys by WWE indicated that the "Big 4" traditional shows (WrestleMania, SummerSlam, Survivor Series and the Royal Rumble) would air exclusively on the Network. Later, another survey indicated WWE had changed their mind on that plan and would have the "Big 4" remain on pay-per-view – with the other "off-brand" shows airing on the Network. 

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There’s no other way to put it: The WWE is taking a colossal risk here. 

Since the WWE typically holds 13 pay-per-view events per year, it appears as if at least eight or nine (and possibly all 13) of those shows will migrate to the WWE Network. That’s a mammoth chunk of change that the WWE could be losing from PPV revenue.

Or is it? 

There are a lot of logistics and numbers behind this, but two main questions here need to be answered: How much can the WWE charge for a monthly subscription to the WWE Network? And how many subscribers would the company need in order to generate the same amount of revenue it would get if the PPVs were actually kept on PPV? 

Obviously, you can break down a boatload of data on the WWE, but the point is this: The only way it is worth moving all WWE PPVs to the WWE Network is if that lost PPV revenue can be regained through WWE subscriptions. 

There’s absolutely no guarantee whatsoever that that will happen. 

WWE pay-per-views typically cost about $50 a pop. Although fans usually pool their money to pay for a PPV, I still think it’s a huge long shot that the company can bring in the same amount of revenue from the WWE Network that it does from pay-per-views. 

The WWE is pulling in $50 pay-per-view, and that’s a ton of money. In fact, it’s a lot more than the WWE would be able to charge per month for access to the WWE Network. 

My cable provider charges roughly $10 per month for HBO, so let’s say that the WWE charges roughly the same. 

Okay, so right off the bat that means that the WWE is getting one-fifth of the revenue that it generated from PPVs. Assuming groups of fans watch the PPVs in one location on the WWE Network (just like they do now when the shows air on PPV), that means the WWE is missing out on a ton of pay-per-view revenue. 

Fans would obviously be more likely to spend $10 a month than $50 a month, but there’s no research that has been done that shows exactly how likely fans will be to do so. Thus, the WWE is left to ponder whether the lower price will attract enough fans to offset the imbalance. 

My head hurts from thinking about the ridiculous amount of variables here—and that’s the problem for the WWE in this situation. 

Launching the WWE Network and then moving the pay-per-views to the channel isn’t just something you do. It takes a ton of time and effort as well as research, studies and focus groups. 

The thing is, though, focus groups and research won’t really tell you whether or not moving all PPVs to the WWE Network is going to be successful. The only thing that will tell you that is actually doing it. 

At least in my view, that’s too big of a risk for the WWE to take, one that—given the unclear nature of what clearances the company might get—could literally put the company in a state of financial ruin. 

If I was the WWE, I might toy with putting one or two pay-per-views on the WWE Network and billing them as “live specials,” but that’s about it. 

Anything more than that will jeopardizing the future of the company.