In the world of professional wrestling, there's
something called a "Swerve."
ANNOUNCER: "HULK HOGAN HAS BETRAYED WCW!"
Some examples: These tag team partners are
called "Baby-faces", or the good guys.
Then one of them swerves, when he super-kicks
his tag-team partner in the head, quickly
assuming the role of the bad guy, or what
the wrestling world calls the "heel".
ANNOUNCER: "ARE YOU KIDDING?
WHAT A DISPICABLE ACT THAT WAS!"
Or a match is almost lost, when… what's
that?
The superstar wrestler appears out of nowhere
sprinting down the aisle to save the match.
ANNOUNCER: "THAT'S THE WARRIOR'S MUSIC!
IT'S THE ULTIMATE WARRIOR!"
That's a swerve.
So it should go as no surprise that World
Wrestling Entertainment, known as the WWE,
the most popular brand of sports entertainment
in the world is prepared for any swerves that
come their way.
So here's the story of how the WWE learned
to see the swerve coming.
So I spoke to Bloomberg reporters Felix Gillette...
Gillette: I'm a writer for Bloomberg News
for the global business team.
and Kim Bhasin
Bhasin: And I'm the U.S. luxury reporter at
Bloomberg.
To find out exactly how the WWE is positioning
itself for an all-out global invasion.
Which starts with a massive change to their
lucrative pay-per-view model.
Gillette: WWE basically pioneered the pay-per-view
model on cable.
I remember as a kid when the pay-per-view
events came up all of our friends would scramble
around and try and get one of the parents
to, to pay for it.
But in 2014, they took a HUGE risk.
Gillette: They saw a little bit sooner than
some of the other entertainment brands that
where this whole thing was moving was away
from cable and satellite television, and towards
on demand streaming video apps.
Gillette: They made this risky decision in
essence cannibalizing that pay-per-view model,
which they had essentially built.
And after some early turbulence it's working.
Roughly 1.5 million people are paying a $9.99
a month
for the WWE app, making it the fifth-most
popular streaming OTT service.
This "adapt or die" approach is in the WWE's
DNA.
Over the past 30 years the company always
seems to think two steps ahead.
In the early 90s…
Bhasin: WWE was at its most threatened when
Ted Turner took them on with WCW
Which stands for World Championship Wrestling.
And back then, the WCW was winning the ratings
war.
So in order to compete with them…
Bhasin: WWE had changed its product from a
family-friendly
kind of cartoonish style to this really raw,
that's why they called their show RAW.
It was this raw style of wrestling.
with violent, outrageous reality inspired
plotlines and aggressive personas.
ANNOUNCER: "FROM A 16 FOOT LADDER!"
Bhasin: And they won that fight against Ted
Turner.
And they bought WCW.
The early 2000s ushered in an era of testosterone-driven
programming aimed at
the red-blooded American male…
Bhasin: Bra and panties matches and people
smashing each other over the head with like
barbed wire bats and things like that.
Until 2015 when WWE fans started a hashtag
#GiveDivasAChance.
Since then, WWE hired 40 more female wrestlers.
And that growing cast of female characters
was part of a much larger plan.
Bhasin: They started to try to appeal to a
broader set of people.
Gillette: Let's attract more female fans.
And after we've attracted more female fans,
let's attract more international fans
They're broadening their base and
they're doing that in large part to make it
more advertiser friendly.
And not just friendly to advertisers…
Gillette: They're trying to build up their
fan base in China, they're trying to build
up their fan base in Europe, they you know
already have a pretty good fan base in India.
Bhasin: India is a place where they already
have an established wrestling culture.
Because of the gigantic Indian wrestler The
Great Kali.
But there's still a lot of work to do.
While the WWE set a revenue record in 2017,
only 30% of it is coming from overseas audience.
And there's one person whose responsibility
is to grow that number.
Bhasin: The buck eventually stops at Vince
McMahon no matter what's happening within
WWE.
Gillette: Yeah, he's a very controlling guy,
and it's a very, very, very tightly scripted
company.
Bhasin: And that goes down the board to big
stars' entrance music,
and their outfits and things like that.
So with a CEO like McMahon always planning
two moves ahead
and an aggressive push into multiple international
markets, a big issue... is money.
Gillette: It's hard to do all those things
simultaneously without committing a huge amount
of capital to it.
And that's where the WWE becomes an attractive
company for buyers.
Gillette: Potentially one thing that could
happen with WWE is they could benefit by being
acquired by a bigger technology or telecom
company.
An Amazon, or a Facebook, or a 21st Century
Fox.
So with a market cap of $2.8 billion, the
advantage of owning 100% of their own content,
and a rapid consolidation spreading throughout
the entertainment industry, it looks like
the WWE is well positioned, even if there are
swerves ahead.
