ESPN responds to report its WWE PLE deal was a financial mistake

A discussion about ESPN’s $1.6 billion deal for domestic streaming rights to WWE premium live events on a recent Wrestling Observer Radio got picked up by a few media outlets outside the pro wrestling bubble, and led to the Disney-owned sports brand issuing a statement refuting the notion their early returns don’t make that five-year contract look like a wise investment.

The analytics firm Antenna recently reported that ESPN’s new streaming platform & subscription service had 2.1 million new users sign-up during the first 30 days after its Aug. 21 launch. That figure doesn’t include accounts that come (for now) with a cable or satellite TV bundle, and bring in $29.99 per month or $299.99 per year to ESPN, or somewhere in the neighborhood of $630 million in annual revenue. A source of The Observer’s Dave Meltzer attributed 100,000-125,000 of those sign-ups to WWE’s first PLE on ESPN, WrestlePalooza. That would be between $30-$37.5 million per year for ESPN, and Meltzer uses $35 million for his calculations, saying:

“If every month ends up kind of like this one… it’s worth $35 million a year. Now, they’re spending $325 million a year for $35 million a year of revenue coming from having these WWE events. Which is a very bad number.”

While some in the wrestling world have a problem with Meltzer (especially the online part of that world, where some issues are legitimate and based on Meltzer’s track record and biases, and other arguments come from differences of opinion, emotion, or are made in bad faith), outside it he’s a generally respected figure. If you’ve seen many non-WWE-produced wrestling documentaries, you know that for many, Dave is their go-to person for pro wrestling information and insight. Here, we’d probably need to hear more to judge, but we’d probably start by pushing him on the assumption that WWE and ESPN can’t grow from the starting number.

Still, it seems they’ve got their work cut out for them to get into the black on the deal. And whatever quibbles we may have, Meltzer’s analysis of a huge business play from ESPN in the crucial steaming space is enough for his quote to start getting picked up by a few outlets outside of the wrestling bubble.

That was apparently enough to get an ESPN source to give freelance combat sports journalist Steven Muehlhausen a statement on it:

“Things are going well and we have started strong. We don’t provide the viewership specifics, but things have been going well.”

Of course, ESPN isn’t going to throw their billion dollar partner under the bus two events into a multi-year deal. And no streaming service’s business plan predicts it will make money out of the gate; media giants are still planting their flags in that world in an attempt to ensure they get a cut of the money they’ve convinced themselves these services will make it the future. Or as Meltzer explained it on WOR:

“That’s why these companies are losing lots of money on this type of stuff — with the idea that down the road, when we get 50 million subscribers paying 30 bucks, we’ll be able to afford all this.”

Stay tuned.