WWE, hosts reap WrestleMania's rewards
Event has created $30 mil in revenue in past three yearsThe Super Bowl is done, the Oscars have been handed out. Now World Wrestling Entertainment is gearing up for its signature event: WrestleMania.
While not the enormous moneymaker the Super Bowl is, the annual main event in pro wrestling has brought WWE and its host city good returns in recent years.
The granddaddy of wrestling PPVs has created revenue of more than $30 million for WWE in each of the past three years. Total company revenue for 2009 amounted to $475 million.
Its 26th edition takes place March 28 at the University of Phoenix Stadium in Glendale, Ariz., following a slew of related weekend events.
In last year's second quarter, WrestleMania generated about $8.4 million in live-event revenue and $21 million in PPV sales thanks to nearly 1 million buys, which helped lay the groundwork for a WrestleMania revenue contribution of $32.2 million.
That compares with the $68 million-$81 million in annual ad revenue recorded for the Academy Awards telecast for the 2007-09 time frame and the $154 million-$213 million annual ad haul during the same three-year period for the Super Bowl, according to Kantar Media.
Meanwhile, WrestleMania's bottom-line contribution has fluctuated more, with profits ranging from $7.1 million to more than twice that in recent years. The company succeeded in improving the profit contribution since a weaker 2008 result.
"We don't give specific guidance every year, but we have said we weren't happy with the 2008 numbers," WWE CFO George Barrios said.
What are his expectations for this year's event? "Most important is that the show is compelling to the audience, and things will be a bit different every year depending where we are, etc.," Barrios said. "But we know it won't be like 2008. We feel pretty good about the numbers."
Overall, WrestleMania is always "the biggest pay-per-view of the year in revenue, and it was by far the most profitable in 2009," he added. And it is typically one of the best-selling PPVs of the year with about 1 million buys around the world.
Last year's 975,000 figure was only slightly below the 1 million mark set by the Floyd Mayweather-Juan Manuel Marquez boxing match in the U.S. and behind a UFC event that drew an estimated 1.7 million buys.
That typically leaves WWE third behind HBO and the UFC in the annual PPV ranking, according to SNL Kagan.
Roth Capital Partners analyst Richard Ingrassia expects better results as well.
"WrestleMania XXV was the largest-grossing event in company history, and we expect this year's installment to break that record yet again as indicated by recent strength in PPV buys and some recovery in consumer spending," he said.
The showcase doesn't bring the same economic impact that the Super Bowl brings to a region, but it does stimulate commerce and tax revenue in host cities to the tune of tens of millions, according to Enigma Research, which has measured the impact of WrestleMania for WWE in recent years.
The regional gains in the $50 million range in the past couple of years compares to studies that estimate the Super Bowl's economic impact in the hundreds of millions, depending on location and what is calculated.
Houston hosted WrestleMania last year and the Super Bowl in 2004. Despite a recession, WrestleMania XXV at Reliant Stadium created $49.8 million in direct, indirect and induced economic stimulus, according to Enigma. About 600 full-time jobs for the area were created, and local and regional authorities raked in $5.7 million in tax revenue.
Greg Ortale, president and CEO of the Greater Houston Convention & Visitors Bureau, said at the time, "The direct expenditure demonstrates that WrestleMania is indeed economically on par with the world's greatest sports and entertainment offerings."
Super Bowl XXXVIII brought $300 million-plus to Houston and surrounding areas, the city noted when it announced that it would bid to host the NFL title game in 2012.
In 2008, the WWE hired former Central Florida Sports Commission president John Saboor as senior vp special events to oversee longer-term planning of WrestleMania. Cities have been bidding for the big show in recent years, which has made the process competitive and added a focus on financial impact.
Atlanta has won the race for WrestleMania next year, beating out Toronto, Miami and Indianapolis.