WWE viewership is in decline, and it has been for a long time now. Just the other week RAW posted its least viewed hour of all time, and these all-time lows seem to be in the news every couple of weeks. Fewer and fewer people, in WWE’s home market at very minimum, are tuning in to their TV, and they’re hardly on a hot streak for live event metrics either. Looking at this through the traditional lens of wrestling analysis all signs would point towards a wrestling company in poor health.

Well WWE laughs at your traditional metrics of success in the wrestling business. Brandon Thurston of Wrestlenomics is projecting yearly profits in the region of $170 million for 2021, passing even the record-breaking marks set in 2020. That’s right, this wrestling product that fewer people than ever are watching is also set to have the most profitable year for a wrestling company ever.

WWE Annual Net Income Metrics

There’s plenty of different discussions that can spring from that conversation, but the one I’m going to be dedicating this column to is how that affects the Wrestling Observer (WON) Hall of Fame cases of the wrestlers at the head of WWE during this era. It’s a conundrum that’s plagued the mind of many involved in WON Hall of Fame discourse in recent years: when profits are up but viewers are down how much credit if any should be dished out?

For those unfamiliar, the criteria for the Hall of Fame is as follows:

“The criteria for the Hall of Fame is a combination of drawing power, being a great in-ring performer or excelling in ones field in pro wrestling, as well as having historical significance in a positive manner.  A candidate should either have something to offer in all three categories, or be someone so outstanding in one or two of those categories that they deserve inclusion.”

For the purposes of this article, I’m entirely going to be focusing on the drawing power aspect of the criteria as that’s what is relevant to this discussion; it’s entirely possible to prove yourself excellent in your field or to have positive historical significance within modern WWE (even if it could perhaps be argued more difficult inside than out in certain scenarios).

The business aspect, the drawing power, that’s what’s been made tricky by WWE’s divorce from traditional measures of success for wrestling, and as you can see the criteria is left vague and up to the voter’s interpretation. Therefore, if this nerdy rabbit hole is one that’s grabbed your attention then I invite you to join me on a series of thought experiments and counterfactuals where we’ll try to get to the bottom of what we really feel is worthy of credit in terms of this mythical ‘drawing power’.

Profit Above All Metrics?

When talking about the business of wrestling, surely the easiest thing to fall back on for whether a wrestler is a fabled needle mover is whether they make the company money. Then surely it follows that profits should be the metric we look for to determine a wrestler’s drawing power? Quick, rush to the ballot and vote Seth Rollins in! He’s main evented during some of the most profitable years of a wrestling company ever. Well not so fast, let me spin you a somewhat hyperbolic counter-theoretical.

One day, appearing mysteriously from the mists, a wrestler by the name of Mr. Draw appears. Immediately he magically becomes the most popular wrestler in the world, and it becomes clear that whichever wrestling promotion signs him will see huge benefits to their TV ratings, merch sales, live attendances: the works. Simply put, you sign Mr. Draw and your revenues will skyrocket.

So Promoter X signs him to Wrestling Association X. They belt him up immediately, and all that was promised and more occurs. Before signing Mr. Draw WAX was pulling in revenues of $1M a year, but thanks to his glorious arrival suddenly they’re able to negotiate a new TV deal, run bigger buildings and generally take in a lot more money. When all is said and done they end the year with revenues of $100M, and after all the stats geeks have gone through the numbers with a fine-tooth comb everybody agrees that the $99M increase can be entirely credited to the arrival of Mr. Draw. Brilliant! But wait…

You see Promoter X in this scenario got a bit ahead of himself. He got overexcited, there was a bit of a bidding war to sign Mr. Draw but Promoter X decided he had to get his man. He did… but the problem was he signed him to a $100M per year contract. Therefore some simple math will tell you that despite Mr. Draw popping all the metrics, the net effect of having Mr. Draw as a part of Wrestling Association X was negative $1M.

So Mr. Draw cost his promotion $1M, does that mean he is lacking in the criteria of drawing power? Does he not have a Hall of Fame case? Of course he does, in fact he has a great case since he was responsible for spiking attendances, merch and TV ratings. That the promoter was foolish enough to pay him too much doesn’t really affect his case. Thus we can see through his hypothetical that company profits and drawing power are far from perfectly correlated.

Is Revenue the Key Metric?

So if profit isn’t the metric that we should have our eyes glued to, is revenue the answer? Sure, Mr. Draw may have not led to increased profits despite having a clear Hall of Fame case, but he spiked revenue for Wrestling Association X, so is that the key metric for these discussions? Well, if you have the patience I’m going to spin another hypothetical and let you come to your own conclusion.

During Mr. Draw’s run as champion of WAX, an earth-shattering event occurs completely disconnected from the wrestling world but has great effects on it. A meteor hits Earth, and while thankfully no lives are taken suddenly the very concept of television ceases to work; the broadcasts just don’t work (look I don’t know science, just go with me here). As a result, all TV companies go completely out of business, and existing TV contracts are now worthless as there’s nobody to pay them.

Wrestling companies rush to streaming services to put their shows on, but with all of television all of the sudden looking for a platform the streaming services are in a very strong position of negotiation. The result of this is that, through no fault of wrestling, rights fees for their weekly shows plummet. Wrestling Association X previously had a $55M with Mr. Draw on top but, after the meteor, they are only able to get a $5M dollar deal with a streaming company.

The exact same amount of people are watching WAX’s weekly show with Mr. Draw as the champion. The exact same amount of people are coming to shows. The exact same amount of merch is being sold. Yet due to an external event, suddenly WAX’s total yearly revenue drop from $100M to $50M. Is Mr. Draw, as a result, possessed of half as much drawing power? Is his Hall of Fame case sliced in half? That doesn’t feel right to me, and I imagine it doesn’t seem the correct answer to most readers. So it appears revenue isn’t the be-all and end-all either.

While you may scoff at the scenario of a meteor destroying the television landscape, in some ways the reverse has happened for wrestling in recent years. Sports TV rights fees have exploded, and US wrestling companies have been able to earn far more money than ever before all while simultaneously being watched by fewer people. A large part of this change is external to wrestling, with rights fees of most sports earning considerably more per viewer than was true in the past, and this rising tide has been greatly to the benefit of wrestling companies. Some of the credit should be allocated towards an intelligent changing of WWE in particular’s brand and general positioning in the TV marketplace, making them friendlier to advertisers and consequentially in a stronger position at the negotiations table, but the credit there belongs to the executives rather than the performers.

It’s therefore my conclusion that the spiking revenues from record TV deals shouldn’t really hold much weight in a Hall of Fame discussion. This business success is the result of outside factors far more so than any wrestler, so to allocate credit towards their drawing power appears simply nonsensical to my eyes.

Consumer Metrics

So what should we be looking at? We’ve cooked up scenarios for both profit and revenue that show they’re far from the be-all and end-all for drawing power, so what should we be looking at? The answer to my eyes is a group of measurements that can be collectively referred to as consumer metrics. How many people are paying to go to live shows? How many people are watching your shows on TV, and paying for your PPVs? How much merch are you selling? It all boils down to how much interest are you DRAWING towards your wrestling product.

So why are these measures more effective at capturing what feels right as a representation of a wrestler’s drawing power? It is because they cut away a lot of the noise created by external factors and drill down to what a wrestler can actually affect and control. A main eventer’s ability to manipulate market forces and make sports TV rights fees become way more valuable than they had been in the past is incredibly limited. What they can do is drive interest that will spike attendances, PPV buys and viewership.

Now if you’re any sort of wrestling business nerd you’ll no doubt have seen the below chart, or some variation upon it. It shows the drastic change over the last decade or so on where WWE’s revenue comes from. As we’ve discussed, TV rights fees have skyrocketed and this, combined with a certain Middle Eastern authoritarian hereditary dictatorship becoming interested in hosting wrestling and paying huge sums of money for the pleasure, has meant that the company no longer gets most of its incomings from the consumer. In fact, it’s not even close; at this point, the vast majority (82%) of their revenue comes most recently from another business. Even AEW, while less drastic a split, has almost two-thirds of its revenue in the business-to-business form, and with the expectation that at the next set of negotiations they’ll get a sizable increase on their current TV deals  that split is only going to get larger.

Business to Business Metrics

So if wrestling companies are getting an ever-smaller portion of their revenue directly from the consumer, then surely that serves as an obvious counterpoint to the conclusion we reached that for WON Hall of Fame business discussion we should be focused on consumer metrics? I say no. The short answer to the reason why is that consumer metrics affect not just direct-co-consumer revenue, but also business-to-bu­­­siness revenue.

I am educated as an economist, and in economics they love to use the Latin term ‘Ceteris Paribus’, which I’m is going to do a lot of the weight listing in the explanation of the long answer. It means “all other things being equal”, and is used to describe the direct effect of a change in a variable in a complex environment in the theoretical situation where every other variable is held constant during the change.

That’s all to say that, in the most succinct way possible: when consumer metrics rise, ceteris paribus, both business-to-business and direct-to-consumer revenues will rise in the long run. One example would be that if in two parallel universes WWE RAW is being watched weekly by five million people and two million people, when they go up for renewal the world where it’s being watched by more people is going to get considerably more money IF you hold all other variables constant. Sure, WWE has had declining TV ratings while also getting increasing TV rights fees, but in a parallel world where everything else was the same but their TV ratings weren’t declining the increase in their TV rights fees would be even larger, ceteris paribus.

As the Wrestlenomics graph goes into detail, business-to-business revenue includes core content rights fees, digital media revenue, advertising and sponsorships. More people watching the product positively affects either the direct revenue gained from those avenues, or puts the company in a stronger bargaining position when negotiating contracts. It’s really only the Saudi events that are divorced totally from consumer metrics, and even then who is to say that if WWE was a considerably hotter product that they wouldn’t have multiple monarchies lining up to pay for shows instead of just one?

It is undoubtedly true that direct-to-consumer revenue is far more strongly correlated and more immediately responsive with consumer metrics. Business-to-business revenue is affected by far more external factors completely out of control of the performers, but that’s kind of the point of this whole piece. We shouldn’t be giving wrestlers drawing credit for external factors out of their control, we should be analyzing what they have an effect on: the consumer metrics. At the core,  better consumer metrics are superior to worse consumer metrics for both categories of revenue.

Closing Thoughts

In reaching this conclusion that consumer metrics should be our star to follow when searching for the fabled drawing power, a number of follow on topics and lines of thought spring up. Some of which could be entire articles in themselves, but I’ll quickly touch upon three now for you to ponder.

While, as stated, I believe consumer metrics should be what we look to for measuring drawing power, I think the external factors that affect how these consumer metrics translate to revenue should affect the relative weight which we place upon the different facets. For example, the far larger proportion that TV rights fees make up for major US wrestling companies’ revenues in the modern era should mean that we place a greater weight on those able to increase TV viewership than in past eras. A main eventer being a TV draw in this era but not much of a live show draw is more valuable and thus should be given more credit than a main eventer with a similar profile in the 80s, where live gates made up a larger slice of a promotion’s pie.

Secondly, if we have come to the conclusion that external factors should, to at least some degree, be controlled for when assigning credit, then it follows that things like economic statuses of regions should be factored in to assessing somebody’s drawing power. Simply put, a wrestler drawing a live gate of $1M in the US, where the GDP per capita is $64,000, is less impressive, ceteris paribus, than a wrestler drawing a $1M gate in Mexico where the GDP per capita is only around $8,000. To some degree the discussion around WON Hall of Fame already does this, as attendance figures are more often discussed than gross gates.

Finally, as with almost all discussion, analysis of drawing shouldn’t be viewed as absolute, but instead with some combination of absolute and relative analysis. Large consumer metrics are great, but large and growing consumer metrics are even more impressive. A wrestler who consistently bumps a TV rating can be more impressive than one who keeps it constant but from a higher base level. However as with anything it’s possible to go too far with that line of logic. Drawing 10,000 people would still in most people’s eyes be more impressive than drawing 200, even if the previous houses for the promotions were 10,500 and 175 respectively. Even when dealing with the numeral heavy world of drawing power analysis: it’s not an exact science. Every case should be approached with context, and any conclusion reached is but an interpretation of the data. The best we can do is to try to make these interpretations as informed and logical as possible.