Will WWE Network Win a (Money) Belt or Get Body Slammed?

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Apr 03, 2011 - Atlanta, Georgia, U.S. - ALBERTO DEL RIO kicks EDGE in the back of the head from the top rope. WrestleMania 27 an
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Starting next month, there will suddenly be a great deal more professional wrestling to watch. On Feb. 24, the top purveyor of "sports entertainment," World Wrestling Entertainment (WWE), will finally launch its long-anticipated WWE Network. It will be a round-the-clock, online streaming service featuring live events and on-demand content from the immense library the company curates.

This is hardly the first bold venture from WWE; it's just the latest in a string of attempts at expanding its business. The few details the firm has revealed about the service sound promising: The subscription fee is $9.99 a month for a six-month commitment, a price at which it could conceivably rope in enough fans to provide a vibrant and reliable revenue stream.

That said, the company's past is riddled with hit-or-miss ventures, with a few real clunkers. Some of the more interesting moves include:

World Bodybuilding Federation

It must have seemed like a good idea at the time. In the early 1990s, the "sport" (or exhibition, really) of bodybuilding had been dominated for decades by the International Federation of BodyBuilders (now the International Federation of Bodybuilding & Fitness). %VIRTUAL-article-sponsoredlinks%WWF, as it was then known, operated a business also populated by performers with enormous muscles. Why not attempt an expansion into that related, but non-competitive, market?

The World Bodybuilding Federation was launched in 1991, but struggled to find an audience. Apparently, one organization was enough for an attraction with limited cult appeal. What also probably didn't help was the WWF's insistence on hyping its strongmen with the flash and gimmickry that's a WWF specialty. It soon found out what works brilliantly in a pro wrestling ring was a tough sell in other forms of sports-related entertainment.

The WBF was disbanded the year after it started.


Americans are passionate about pro football. Unfortunately for them, the National Football League's regular season is only 16 games long. How could fans get a gridiron fix during the rest of the year? WWF thought it had the answer: arena football.

In combination with broadcaster NBC, at the time owned by General Electric (GE), the company launched the XFL just after the 2001 Super Bowl.

Mirroring the edgy "attitude era" of its wrestling at the time, WWF's version of the sport featured a very lax approach to penalties, cheerleaders clad in limited clothing, and teams with names such as the Hitmen and the Maniax. But the standard of play was considered sub-par, and the league failed to score with a substantial part of the huge football audience.

The XFL was shut down after its only season in 2001, with the WWF taking an estimated $35 million bath on its investment.

World Championship Wrestling

In the mid to late 1990s, the WWF wasn't the only big wrestling show in town. For years, a rival which came to be called World Championship Wrestling, had been attracting dedicated viewership thanks to regular showings on cable's "Superstation," TBS. That fat audience got even fatter when in the mid-1990s new management opened the coffers to lure away proven WWF stars like Hulk Hogan and "Macho Man" Randy Savage. For a time, WCW's flagship show "Monday Nitro" successfully competed with that night's WWF offering, "Raw."

The glory days didn't last long. Fast-growing salaries commanded by the WCW's growing roster of star wrestlers drained money out of the promotion, while increasingly nonsensical story lines leeched audience interest.

The decline was fast, and by 2001 parent company AOL Time Warner -- these days, simply Time Warner (TWX) -- was ready to throw in the towel. WWF snapped up the best pieces of WCW for a relative song, at roughly $4.3 million in direct and related costs.

Buying those assets was an obvious but nevertheless clever move -- it gave WWF ownership of the promotion's trademarks, plus thousands of hours of content featuring some of wrestling's top stars.

Extreme Championship Wrestling

If WWF was edgy in the 1990s, ECW was edgier.

A scrappy organization, ECW delivered a more violent form of wrestling to a niche audience thirsty for bloodier fare. Always overshadowed by its hulking rival, ECW managed to stay in business for nearly a decade before going bankrupt shortly after the dawn of the new millennium. WWE bought it on the cheap in 2003 -- speculation has it that the total cost was less than $2 million -- and tried to revive the brand as a regular TV show in subsequent years.

By then, though, WWE had tamed its content, moving away from the attitude era with its two existing TV brands ("Raw" and "Smackdown"). Its attempts to nudge its new asset in a more mainstream direction left existing ECW fans cold. And the shift didn't differentiate ECW enough to win over "Raw" and "Smackdown" devotees. WWE gave it a good shot, though, and ECW aired on NBCUniversal's Sci-Fi (later SyFy) channel from 2006 to 2010.

Like WCW, the real value of the ECW buy was the promotion's library; as its heyday lasted for several years, it has a lot of content that can be put to profitable use by its parent ... like in a 24-hour online subscription service, for example.

Is WWE Network the Next XFL, or the New WCW?

Unlike some of its lesser ventures over the years -- which have often felt off-the-cuff and highly speculative -- the WWE Network seems a well-considered and a smart way to leverage the valuable asset that is the company's big video library. Figures aren't yet available for how much the venture is costing the firm, but it's probably less than, say, building a pro sports league from scratch.

And there's a big, proven audience that can be sold the new service relatively easily. With its Network, WWE is doing what it does best -- providing a constant stream of wrestling action.

Look for the new service to do well when it hits the browsers of the company's fan base -- unlike certain other efforts in the company's history.

Motley Fool contributor Eric Volkman owns shares of World Wrestling Entertainment. The Motley Fool owns shares of General Electric.
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