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DirecTV may sever ties with WWE over new online network

January 09, 2014|By Joe Flint
  • WWE Chairman Vince McMahon's new network has angered DirecTV.
WWE Chairman Vince McMahon's new network has angered DirecTV. (Getty Images )

Satellite broadcaster DirecTV is less than thrilled with the WWE's plans to launch an online network and said it will have to rethink its relationship with the programmer and whether it will continue to offer its pay-per-view specials.

As part of the WWE's online network, which will launch next month, its 12 pay-per-view specials including the hugely popular "Wrestlemania" will be made available to subscribers at a price tag of $9.99 a month.

Traditional pay-TV distributors including DirecTV have for years counted on WWE's pay-per-view specials as a solid revenue source. Typically the distributors and WWE split the cost to consumers 50-50 and the price for the pay-per-view specials ranges from $55 to $70.

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While WWE has said it will still make its pay-per-view events available to cable and satellite operators for sale, having them also available on the new platform is likely to cut into buy rates. That has DirecTV ready to sever ties.

"Clearly we need to quickly re-evaluate the economics and viability of their business with us, as it now appears the WWE feels they do not need their PPV distributors," DirecTV said in a statement, adding that the audience for its events "has been steadily declining, and this new low-cost competitive offering will only accelerate this trend."

DirecTV is the first multichannel video program distributor to issue an official response to the WWE's over-the-top network.

In an interview Wednesday, WWE Corp. Chairman Vince McMahon said he thought it was in the interest of the pay-TV operators to continue to carry the pay-per-view events.

"I think it’d be foolish for them not to want to carry the pay-per-view anymore," McMahon said. "It’s found money for them."

A WWE spokesman said in response to DirecTV's statement that, "to the contrary, WWE hopes to continue to be in business with our pay-per-view distributors, ultimately giving our fans the choice between the two offerings."

ALSO:

WWE launching an over-the-top network

WWE is cutting the cord to cable with new service

Follow Joe Flint on Twitter @JBFlint.

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