The New TNA PPV Strategy, Part 2: Losing Money
Posted: Jul 28th, '13, 19:45
The New TNA Pay-Per-View Strategy, Part 2: Why I was Right About it Being a Bad Idea (So Far), Part 2: Losing Money
Six months ago, right after the big news came out, I wrote an article titled “The New TNA PPV Strategy… and why I think it is a Bad Idea.” In that article, I outlined the strategy, it’s positives and negatives, and why I thought it wouldn’t help the company. I would like to state that I am not privy to any inside information and I only have access to the financial information that TNA has released. Six months is also obviously too soon to make a final judgment on the success of the concept, but I think we do have enough data to make some informed judgments based on analyses of both the product over the last six months and the buyrates of the PPVs . After six months and two PPV’s (plus three One Night Only shows), I am convinced that I was right. This change in strategy is not helping TNA. In fact, it may actually be hurting them.
THE NUMBERS:
The first PPV built up with the new model was Lockdown, TNA’s second biggest PPV of the year. Last year’s Lockdown received about 17,000 buys. This year’s edition did the same. Even without having to shell out an extra thirty dollars for the February PPV this year, no additional fans bought this year’s show. If the five dollar price increase had been in effect for Lockdown, TNA would have made eighty-five thousand dollars more on this year’s Lockdown than they did on last year’s Lockdown. This might sound good, but remember that the whole reason for this shift in strategy is that TNA thought they would make more money with just Lockdown at $40 than they would with both Lockdown at $35 and Against All Odds at $30. At just 7,000 buys (which is pretty pathetic for a national promotion), TNA pulled in two hundred and ten thousand dollars for last year's Against All Odds. Do a little bit of subtraction, and we find that unless putting on Against All Odds cost TNA $125,000, TNA lost a lot of money here.
More damningly, let’s move on to Slammiversary, for which the price increase actually was in effect. Additionally, this show had three months of TV to build it up, rather than Lockdown’s two. This year’s show got around 13,500 buys. That is actually down from last year’s 15,000. The show only turned an increase of $15,000 over last year, and when we factor in the two PPVs cut from the schedule (Victory Road, which did 7,000 buys in 2012, and Sacrifice, which did between 8,000 and 9,000, so let’s just say 8,500), TNA lost a about $450,000 (minus the cost of putting on the two PPVs that were cut. So far, with three PPVs cut this year, they lost $575,000. When you factor in July’s Destination X (9,000 buys in 2012), which was always one of the more popular PPVs of the year aside from the big four, the losses total up at $845,000. To be fair, I have not seen any buyrates for the three One Night Only shows that have aired so far, but at just $15 each and having no bearing on any angles whatsoever (and thus little reason for the fans to really care about the shows), I highly doubt that they have produced enough revenue to make up for these losses (especially once you consider how crappy all but the first one have been).
Leaving possible causes out of it, this was a horrible move financially for TNA. At their worst, the monthly shows were doing 7,000 buys. Actually, if you look at the trend for the year (I have found numbers for all of them aside from No Surrender), the buyrates seem to have steadily been going up on the monthly PPVs. From 7,000 for the first two to between 8,000 and 9,000 for Sacrifice, to a solid 9,000 for Destination X, a slight dip back to 8,000 for Hardcore Justice and then 11,000 each for Turning Point and Final Resolution… but, for argument’s sake let’s take them at their absolute worst. 7,000 buys times $30 each is $210,000. I highly doubt that paying the transmission fee and paying all of the wrestlers and crew for the show was costing TNA $210,000 (I could be wrong, but if I am, then wouldn’t the One Night Only shows have the same problem?). All TNA has done by making this switch is flush a lot of money down the drain.
Yes, they now have the One Night Only shows, but each One Night Only show needs to get two buys for each buy the monthly PPV that month would have gotten for TNA to break even (actually I think they would have made a profit of one cent). Does anyone really think TNA will do two buys with a show that is entirely irrelevant to the storylines and was taped months beforehand (they have already taped the show for February 2014) for each buy that they would have done with a monthly PPV hyped up with build on TV that is live and important to the current storylines?
Yes, some of the themed One Night Only shows will likely do a bunch of buys. If we are being optimistic, I think that the Knockouts’ show and the X-Division show might be able to make up for the monthly PPV (or even possibly make more money), but there is no way that they will be able to make up for the losses of the other six. Four of the eight One Night Only shows are random tournaments with no consequences whatsoever, and while a one night tournament of all of the for TNA World Heavyweight Champions sounds like a great idea on paper, I question how many buys it will actually get if there is nothing on the line… and especially after we have already seen a few other One Night Only tournaments.
TNA also really seems to be trying to skimp on these One Night Only shows, too. Guys who I assume make a lot more money per appearance than everyone else, such as Sting, Kurt Angle, and Jeff Hardy, are only used on one or two of the shows, and a lot of the time the cards feel like they were filled out with a collection of random indy guys who TNA likes using occasionally and OVW/rarely used TNA talent, and as a result, whole chunks of these cards seem unimpressive. Remember that TNA needs to get two buys for each of these to make up for one lost buy on the monthly PPV, so these things need to scream "BUY ME, I’M TOTALLY WORTH THE MONEY!" I’m not saying that Jeff Hardy and Kurt Angle have to be on every show, but you need to replace them with someone with a name (and when I say “someone with a name” I mean a name that will draw, not Funaki and Bob Holly). Assuming that No Surrender did as bad as the other two lowest buys, these shows need to get an average of about 17,125 buys EACH to make up for the lost revenue from the monthly PPVs. That’s more buys than any TNA show other than Lockdown or Bound For Glory has gotten in years… and they’ll have to do it without relying on the drawing power of Sting, Kurt Angle, and Jeff Hardy, as well as the big drawing power that AJ Styles and Chris Sabin have within the established TNA fanbase. Do you really think they’ll be able to do it?
2013 is year in which TNA has incurred a major expense: Taking Impact on the road. This is a year in which they need money, and so far this new Pay-Per-View strategy is costing them a very large chunk of it. I’m not trying to predict doom. I’m just giving facts based on the numbers. Things might well turn around for TNA, but based on my observations of the product over the last six months, I don’t think they will. Why? Tune in tomorrow for part 3.
Six months ago, right after the big news came out, I wrote an article titled “The New TNA PPV Strategy… and why I think it is a Bad Idea.” In that article, I outlined the strategy, it’s positives and negatives, and why I thought it wouldn’t help the company. I would like to state that I am not privy to any inside information and I only have access to the financial information that TNA has released. Six months is also obviously too soon to make a final judgment on the success of the concept, but I think we do have enough data to make some informed judgments based on analyses of both the product over the last six months and the buyrates of the PPVs . After six months and two PPV’s (plus three One Night Only shows), I am convinced that I was right. This change in strategy is not helping TNA. In fact, it may actually be hurting them.
THE NUMBERS:
The first PPV built up with the new model was Lockdown, TNA’s second biggest PPV of the year. Last year’s Lockdown received about 17,000 buys. This year’s edition did the same. Even without having to shell out an extra thirty dollars for the February PPV this year, no additional fans bought this year’s show. If the five dollar price increase had been in effect for Lockdown, TNA would have made eighty-five thousand dollars more on this year’s Lockdown than they did on last year’s Lockdown. This might sound good, but remember that the whole reason for this shift in strategy is that TNA thought they would make more money with just Lockdown at $40 than they would with both Lockdown at $35 and Against All Odds at $30. At just 7,000 buys (which is pretty pathetic for a national promotion), TNA pulled in two hundred and ten thousand dollars for last year's Against All Odds. Do a little bit of subtraction, and we find that unless putting on Against All Odds cost TNA $125,000, TNA lost a lot of money here.
More damningly, let’s move on to Slammiversary, for which the price increase actually was in effect. Additionally, this show had three months of TV to build it up, rather than Lockdown’s two. This year’s show got around 13,500 buys. That is actually down from last year’s 15,000. The show only turned an increase of $15,000 over last year, and when we factor in the two PPVs cut from the schedule (Victory Road, which did 7,000 buys in 2012, and Sacrifice, which did between 8,000 and 9,000, so let’s just say 8,500), TNA lost a about $450,000 (minus the cost of putting on the two PPVs that were cut. So far, with three PPVs cut this year, they lost $575,000. When you factor in July’s Destination X (9,000 buys in 2012), which was always one of the more popular PPVs of the year aside from the big four, the losses total up at $845,000. To be fair, I have not seen any buyrates for the three One Night Only shows that have aired so far, but at just $15 each and having no bearing on any angles whatsoever (and thus little reason for the fans to really care about the shows), I highly doubt that they have produced enough revenue to make up for these losses (especially once you consider how crappy all but the first one have been).
Leaving possible causes out of it, this was a horrible move financially for TNA. At their worst, the monthly shows were doing 7,000 buys. Actually, if you look at the trend for the year (I have found numbers for all of them aside from No Surrender), the buyrates seem to have steadily been going up on the monthly PPVs. From 7,000 for the first two to between 8,000 and 9,000 for Sacrifice, to a solid 9,000 for Destination X, a slight dip back to 8,000 for Hardcore Justice and then 11,000 each for Turning Point and Final Resolution… but, for argument’s sake let’s take them at their absolute worst. 7,000 buys times $30 each is $210,000. I highly doubt that paying the transmission fee and paying all of the wrestlers and crew for the show was costing TNA $210,000 (I could be wrong, but if I am, then wouldn’t the One Night Only shows have the same problem?). All TNA has done by making this switch is flush a lot of money down the drain.
Yes, they now have the One Night Only shows, but each One Night Only show needs to get two buys for each buy the monthly PPV that month would have gotten for TNA to break even (actually I think they would have made a profit of one cent). Does anyone really think TNA will do two buys with a show that is entirely irrelevant to the storylines and was taped months beforehand (they have already taped the show for February 2014) for each buy that they would have done with a monthly PPV hyped up with build on TV that is live and important to the current storylines?
Yes, some of the themed One Night Only shows will likely do a bunch of buys. If we are being optimistic, I think that the Knockouts’ show and the X-Division show might be able to make up for the monthly PPV (or even possibly make more money), but there is no way that they will be able to make up for the losses of the other six. Four of the eight One Night Only shows are random tournaments with no consequences whatsoever, and while a one night tournament of all of the for TNA World Heavyweight Champions sounds like a great idea on paper, I question how many buys it will actually get if there is nothing on the line… and especially after we have already seen a few other One Night Only tournaments.
TNA also really seems to be trying to skimp on these One Night Only shows, too. Guys who I assume make a lot more money per appearance than everyone else, such as Sting, Kurt Angle, and Jeff Hardy, are only used on one or two of the shows, and a lot of the time the cards feel like they were filled out with a collection of random indy guys who TNA likes using occasionally and OVW/rarely used TNA talent, and as a result, whole chunks of these cards seem unimpressive. Remember that TNA needs to get two buys for each of these to make up for one lost buy on the monthly PPV, so these things need to scream "BUY ME, I’M TOTALLY WORTH THE MONEY!" I’m not saying that Jeff Hardy and Kurt Angle have to be on every show, but you need to replace them with someone with a name (and when I say “someone with a name” I mean a name that will draw, not Funaki and Bob Holly). Assuming that No Surrender did as bad as the other two lowest buys, these shows need to get an average of about 17,125 buys EACH to make up for the lost revenue from the monthly PPVs. That’s more buys than any TNA show other than Lockdown or Bound For Glory has gotten in years… and they’ll have to do it without relying on the drawing power of Sting, Kurt Angle, and Jeff Hardy, as well as the big drawing power that AJ Styles and Chris Sabin have within the established TNA fanbase. Do you really think they’ll be able to do it?
2013 is year in which TNA has incurred a major expense: Taking Impact on the road. This is a year in which they need money, and so far this new Pay-Per-View strategy is costing them a very large chunk of it. I’m not trying to predict doom. I’m just giving facts based on the numbers. Things might well turn around for TNA, but based on my observations of the product over the last six months, I don’t think they will. Why? Tune in tomorrow for part 3.