ESPN’s massive investment in WWE content may not be producing the kind of financial results the network had hoped for.
On today’s edition of Wrestling Observer Radio, Dave Meltzer discussed the current state of ESPN’s $325 million-per-year partnership with WWE, noting that while the deal helped create a temporary surge in streaming numbers, the boost hasn’t come close to offsetting the costs involved.
ESPN’s streaming service saw a noticeable spike in new sign-ups during WrestlePalooza weekend, with estimates ranging between 100,000 and 125,000 new subscribers added to the platform. However, despite that short-term gain, the overall subscriber base has remained around 2.1 million total paid users — a figure that falls well short of what’s needed to justify the massive yearly payout to WWE.
Adding to the issue is that most of ESPN’s reported 30 million total subscribers are actually cable users who gain access to the streaming app for free as part of their existing TV packages. That leaves only a small fraction of paying customers actually generating revenue.
Based on internal projections and early data, WWE content may only be worth around $35 million per year in real revenue to ESPN — roughly one-tenth of what the network is paying. The company’s long-term strategy appears to hinge on driving gradual subscriber growth and overall brand synergy, but in the short term, the losses are significant.
Meltzer compared the WWE-ESPN agreement to other high-cost streaming deals made across the sports world, pointing out that many of them make little financial sense from a short-term perspective. He also remarked that while WWE’s presence arguably brings more value to ESPN than UFC content does to Paramount, both partnerships represent major financial losses for their respective platforms.
As Meltzer summed it up, the ones walking away happy right now are WWE’s top executives — not the streaming services footing the bill.
