The Turbulent Year of 2017: A Look At The Future For WWE, FloSlam And Powerbomb.tv

The arc of pro wrestling history has been determined by the history of media. For Frank Gotch, it was the railroad; for Lou Thesz, Buddy Rogers and Gorgeous George, television; for Vincent K. McMahon and Hulk Hogan, cable.

The biggest boom in wrestling history, in the late 1990s, coincided with the beginnings of the internet, but it could’ve happened without it. Nearly twenty years later, the internet and our grasp of it has matured. The internet is brimming now with streaming video and two-way communication. Through social media we are all suddenly publishers. Public broadcasts of text and even live video are accessible to nearly all.

The maxim that a promotion needs television exposure to succeed still holds true on the grandest scale, but that law is being circumvented more and more in the finer niches of pro wrestling.

In 1983, as the wrestling business was on the edge of major change, cable was in 41% of American homes, on its way to a vast majority. In 2016, over-the-top streaming devices, OTT-capable gaming consoles and smart TVs are in at least 39% of American homes.

Streaming video may not spell a radical change to the hierarchy of the wrestling business; it could however usher in a time when super indies are even more relevant and lucrative, where "skinny bundles" and maybe even WWE itself compete for and make political moves involving brands that were once thought to be irrelevant in wrestling’s grand scheme.

2016 has been a year full of unthinkable revelations, particularly in WWE, which go against the company’s historical approach to talent: A.J. Styles signing with WWE and winning its title; Shinsuke Nakamura leaving New Japan and debuting in NXT; the introduction of the Cruiserweight Classic tournament, consisting almost exclusively of wrestlers not signed to the company; and so on.

On New Year's Eve, at the end of 1983, the first Starrcade had just happened; Iron Sheik had just ended Bob Backlund’s four-year reign as WWF Champion. That night WWF aired on All-Star Wrestling tape of its promoter Vince McMahon sitting down for a few comments on the upcoming new year. He gave a half out-of-character interview, acknowledging himself only as an announcer, but speaking about the overall direction of the pro wrestling business.

“I see 1984 as being perhaps the most turbulent year in professional wrestling. I think that with the recent happenings that we’ve seen as of late, it would point toward a direction of a lot of turbulence, a lot of unusual things happening in professional wrestling and it probably will open the gates for a virtual flood of wrestling talent into the World Wrestling Federation, the likes of which we have never seen before.”

1984 was the year McMahon immediately put his belt on Hogan and aggressively aimed his product at a national audience.

In 2017, WWE may take steps toward absorbing or preempting some emerging wrestling brands. The Wrestling Observer Newsletter recently reported the company is offering unusual contracts to wrestlers in the United Kingdom -- not to bring them to WWE or NXT, but to keep them working the indies and unable to work with the reboot of the World of Sport wrestling program on ITV and possibly What Culture’s new promotion. Following the announcement of WWNLive’s deal with FloSlam, the Observer also reported McMahon, over 30 years since his great national expansion, is going back-and-forth about whether he’s interested in putting indie wrestling on the WWE Network.

Yesterday WWE announced it will hold a tournament to crown a WWE UK Champion in January.

"The WWE Network allows us to do things that weren’t possible for us to do before—the world becomes a smaller and smaller place because of that, you connect to everyone at the same time," Paul Levesque (Triple H), WWE's Executive Vice President of Live Events, Talent and Creative told Newsweek.

"[T]his is going to bridge the gap between independent wrestling and WWE: something that has never been done before," Finn Balor said at the press conference held to announce the news of the tournament.

Having access to indies on WWE's streaming service would be exciting for some fans, but I doubt it would add many subscribers. More than anything, such a move would serve to keep certain promotions away from FloSlam and any others who may enter the wrestling SVOD market.

FloSlam

FloSlam has signed up the WWNLive brands, including Evolve, Tommy Dreamer’s House of Hardcore, IPW:UK, Irish promotion OTT (Over the Top Wrestling), and German promotion wXw.

Nick Schenck is the Senior Vice President of Acquisition and Marketing for FloSports, Inc., the parent of the FloSlam brand.

“FloSlam aims to be the No. 1 source for independent pro wrestling coverage, including live events, replays of top promotions around the world, news and features, documentaries and more,” Schenck said via e-mail last week. “FloSlam is a one-stop shop for fans to access a growing number of promotions, from EVOLVE to House of Hardcore, SHINE, PWX and more to come. We're excited about the response from the pro wrestling community, and we're just getting started.”

FloSlam subscribers pay either $20 per month or can make a year commitment for $150 (averaging out to $12.50 per month). Those who make the year commitment also get access to the entire FloSports network, in addition to FloSlam. However those price points are higher than WWE Network’s current $9.99 per month offering.

When asked if FloSlam views itself in anyway a competitor to WWE either for content or even talent, Schenck responded:

“We're focused on our own business, and we believe that our model provides a lot of value to pro wrestling fans, who previously paid for multiple iPPVs per month that added up to significantly more than what a monthly FloSlam subscription costs.”

Internet PPVs from WWNLive were priced at $9.99 for a live view, or $14.99 if you waited until the day of the event to make the purchase, and more if you wanted to the ability to watch the event on VOD after it aired live.

“Also, keep in mind that annual subscribers to FloSlam pay 37% less than monthly subscribers on an annualized basis, and they get access to premium content across the entire FloSports network of sites, including FloWrestling, FloCombat, FloGrappling, etc.”

Upon launch of the service, it was announced WWN agreed to a five-year deal with FloSlam to provide about 60 events per year. Additional terms of the deal aren’t public. Some have speculated the five-year deal to be worth less than $1 million while others have argued it could be worth as much as $3.4 million over the entire term.

Considering a deal with Flo compromises WWN's unofficial relationship with WWE and the fact the deal results in WWN voluntarily and completely cannibalizing its own iPPV/VOD business, I’d expect the deal is worth something on the higher end of that range. Even if the deal was worth $3 million over five years, when you do the math, it seems reasonable FloSlam could gain enough subscribers to cover that cost.

At current price points, somewhere between 2,500 and 4,000 subscribers (on average throughout a given year) would be needed to break even on WWN. Obviously there are other costs associated with running FloSlam as well as additional costs for each new deal signed, so ultimately the average subscriber count would need to be higher, but maintaining an average of a few thousand subscribers throughout the year related to the WWN brands sounds attainable. That could be accomplished even more comfortably if the deal is structured with escalating payments, much like WWE's deals with its TV partners. This could lower risk, as it's reasonable to expect subscriptions to be relatively low at first and to grow throughout the lifetime of the contract.

Deals with companies like Ring of Honor, Pro Wrestling Guerilla, and U.K. promotions Rev Pro and Progress could also be exciting additions for FloSlam, but have yet to materialize. Schenck says FloSlam hasn't ruled anyone out.

“[W]e continue to pursue opportunities with independent pro wrestling promotions from around the world,” Schenck said. “The response and interest from the pro wrestling community has been overwhelming, and it's great that promoters and fans understand how we're investing in the sport to grow it to unprecedented heights.”

Paul Levesque specifically mentioned Rev Pro and Progress, as well as Insane Championship Wrestling (ICW), in the interview with Newsweek yesterday. "As [the wrestlers who were introduced for the WWE UK Championship tournament] are working [in the U.K.] and moving up [in the industry], we’re helping RevPro, ICW and Progress to grow and help cultivate their talent pool as well."

To complicate the story, before the launch of FloSlam in October, a report came out in August stating WWE made an investment in FloSports. The report says FloSports received a total of $21.2 million in new funding from various entities, among which WWE was included, to “accelerate the online sports network’s growth into new sports and expand its existing verticals.”

“We want to partner with world-class investors who share our vision to transform sports media,” FloSports CEO Martin Floreani said in the release. “It’s exciting that visionaries in the media and OTT space have backed us to achieve this goal.”

FloSlam isn’t the only new vertical the company has introduced since the August press release was issued about new funding. FloSports has announced the launch of FloMarching, FloClimbing, FloSwimming, FloRodeo, and a partnership to launch Varsity.tv.

A recent SEC filing from WWE reveals Vince McMahon’s company invested $1 million in a "subscription-based sports media company". The document doesn’t explicitly say the company invested in is FloSports, but it’s difficult to imagine what else it might be referring to. So it seems likely the amount WWE invested in FloSports is $1 million.

FloSports declined to comment on the matter of WWE’s investment.

When we contacted WWE for comment, we were referred to the aforementioned press release from August.

Should the Austin, Texas-based company make deals with a number of high-profile promotions worldwide, the advent of FloSlam conjures up fantasies of a high-tech National Wrestling Alliance: the organization in the 1950s through the 1980s that unified promotions from all over the world and determined the most prestigious world championship in the business, controlling the champion’s bookings and determining the titleholder based on votes from aligned promoters.

FloSports declined to say whether we could see a day when talent are offered contracts that makes them exclusive to the brands the company is partnered with.

FloSlam is still making moves with its staff. Yesterday, Jeremy Botter, who had been Managing Editor since the launch tweeted he was no longer with the company. Brent Brookhouse of MMAjunkie recently announced he'd be joining the company, in January. Rob McCarron of Voices of Wrestling briefly accepted a position in November, before deciding against it.

Powerbomb.tv

Powerbomb.tv is another new streaming bundle service, which is set to launch by the official end of the fall season. Its price point options will be $9.99 per month, $49.95 for six months or $99.99 for twelve months.

Powerbomb doesn’t have the financial backing of WWE or even FloSlam, but it already has a wide variety of partners among smaller independent promotions from all over the world.

Public partnerships have been announced with Tier 1 Wrestling (New York City), C*4 (Ottawa), Top Rope (Fall River, MA), , Olde Wrestling (Ohio), 4 Front Wrestling (U.K.), Deep Southern Championship Wrestling (Georgia), Southern Fried Championship Wrestling (Georgia), Georgia Premier Wrestling (Georgia), Italian Wrestling Assocation (Italy), RIOT Lucha Libre, and two notable lucha videographers, Carxyus and Black Terry Jr.

Dylan Hales is an instrumental member of Powerbomb’s team, as well as one of the most enthusiastic fans and advocates of independent wrestling you’ll find.

“I honestly believe the variety and diversity of content available on Powerbomb is what sets us apart.” Hales said.

“One of my personal goals with the service is to have it be a place where a person can check out what makes the indie scene great at both a macro and micro level. By that I mean I want a place where a fan can check out wrestling in Italy or New York City and see what is fresh, exciting and different about each place, while also being able to pull back, look at the totality of the package and say ‘independent wrestling is awesome.’”

Powerbomb, founded by Adam Lash, will provide video on-demand to its subscribers. Although not at the launch of the service, the company hopes to offer live streaming content later in 2017, Hales said.

“While live streaming is certainly on the agenda, and something we recognize there is a market demand for, we believe that the variety of content we will be presenting is our biggest strength. What other service can offer you Southern indies and lucha libre as part of the same package?”

WWE is a billion dollar business and FloSlam has an existing streaming service with millions of dollars of funding behind it. Powerbomb is entering a new and competitive market for wrestling fans’ attention and subscription dollars. Among the other more financially rich wrestling subscription video on-demand services, Hales describes Powerbomb as a passionate independent company, similar to the wrestling promotions it’s partnering with.

“Our financial backing doesn't compare [to that of WWE or FloSlam]. We are an independent company that is a platform for independent wrestling,” Hales said. “We have no corporate backing at all, only personal investments and of course the support of fans once we launch. We offer sustainability and fair compensation to our content providers, but more than that we view them as partners.”

Is Powerbomb offering rights deals to its partners or are partners signing on just for the exposure?

“Every partner has their own reasons for joining us,” Hales said, “though I think that they appreciate that we view them not just as content providers but as actual partners who we want to see succeed and grow. I also think they appreciate that we're looking at sustainability and are not taking on any unnecessary financial risks or burdens.”

I think it’s likely in at least in some cases Powerbomb is offering deals to compensate partners based on how often their content is viewed on the service.

This would allow the service to accumulate a variety of partners by agreeing to pay content providers at a sustainable rate relative to the partner's value to the service, rather than paying guaranteed rights fees like FloSlam is likely offering or WWE theoretically could offer partners.

This approach puts Powerbomb in a position to acquire video from a large number of promotions -- albeit ones that aren’t a fit for a more lucrative offer from FloSlam or viable on their own standalone service. Essentially this approach is similar to how YouTube ad revenue works for users who monetize their videos on that site, which many indies are familiar with, only of course the money is coming from subscription fees instead of ads, so I'd expect the compensation is higher than what YouTube can provide with ad revenue sharing.

As of this writing, Powerbomb has yet to launch. The website shows a launch date of “Fall 2016”. Hales says the service will launch soon.

“Our team of developers have put in a lot of work to make the site as user friendly as possible, and we are almost ready to go.”

It’ll be interesting to see how these services develop. Should FloSlam and Powerbomb succeed and remain sustainable, we could see a hierarchy emerge where a promotion starts out on Powerbomb, gains a following and considers offers from FloSlam or possibly even WWE, if the wrestling giant actually chooses to deal with indies.

The Remaining Brands

If this market is self-sustainable, I could see a situation where there’s essentially a Venn diagram with FloSlam in the middle with non-intersecting overlaps from Powerbomb and WWE each on either side -- again, this is imagining WWE even chooses to enter the market.

With Powerbomb covering smaller indies and FloSlam working on signing up more high-profile companies, what valuable brands are left for FloSlam and WWE to consider and maybe even compete over?

First of all, there are some promotions with high value but which would obviously be difficult to acquire. New Japan Pro Wrestling would be most valuable, but already has its own OTT service, NJPWWorld, which presents all sorts of complications in making a deal with an external party. One complication is that the NJPWWorld price point is 999 yen ($8 to $9 USD), which is lower than either FloSlam or WWE Network’s price points, so it may be difficult to get fans to convert who are interested in New Japan and not any other content in the bundle. The Observer reports NJPWWorld subscriptions outside Japan are less than 10,000, which may be small to WWE but would be a major addition for FloSlam. I’d argue however there’s room for growth beyond 10,000 non-Japanese subscribers if New Japan’s content was offered on a platform more accessible to English-speaking fans.

Ring of Honor’s December 2 Final Battle PPV was at one time ambiguously listed on FloSlam’s website. That event has come and gone without a deal being announced between ROH and Flo. After New Japan, ROH would probably be the second-most valuable property to fans who follow a wide variety of promotions. With its parent (Sinclair Broadcasting) backing and broadcasting it, like Lucha Underground, it may be difficult to acquire ROH.

Lucha Underground is owned by its TV broadcaster, the El Rey Network. Lucha Underground episodes are taped well in advance, and El Rey probably isn’t going to give up first-broadcast rights to those episodes. Would it consider allowing Hulu style next-day VOD of Lucha Underground episodes on FloSlam? Maybe, at the right price. I doubt though WWE would have interest in partnering with Lucha Underground due content including intergender matches seen on the program, which WWE wouldn't want to have to explain to sponsors.

Pro Wrestling Guerrilla is arguably the indie with the most interest, even more than Evolve. The big difference between PWG and Evolve has been their delivery models. While Evolve has streamed their events live and made them available on VOD within a few days after the show, PWG has stuck to releasing DVDs. Its biggest event, the Battle of Los Angeles (BOLA) tournament, this year took place over three days, on September 2, 3 and 4. DVDs for the event were shipped to customers who pre-ordered more than a month later on October 7. Eager to protect the viability of its DVD sales, PWG only allows partner Highspots.com to sell VOD of its events after DVDs have been on sale for a few months.

British promotions Progress and Rev Pro are two companies with good production values and well-received in-ring products that haven’t been accounted for yet. WWE may have interest in working with them considering those promotions were both given matches to determine qualifiers for WWE’s Cruiserweight Classic and Paul Levesque's willingness to mention them by name publicly.

Other eligible candidates are AAW in Chicago, AIW in Cleveland, ICW in the U.K. and Beyond in Providence. Beyond broadcast an event on FloSlam on December 11, but that was part of an individual deal through WWN and not part of a long-term deal with FloSlam itself.

Combat Zone Wrestling has a strong social media presence but may disqualify itself to its own island due to its violent content which often includes bloody deathmatches.

Women’s promotion Shimmer would be a good pick-up too. Shimmer has operated similarly to PWG, focusing on the DVD sales and not having ventured much on its own into VOD.

Smash in Toronto and Chikara are other promotions with a following that have gotten into the VOD business and have production values comparable to WWN’s.

If its TV contracts allowed it, TNA could offer its PPV events and delayed VOD of its TV episodes to this market. That the promotion has been a damaged brand for so long needs to be taken into account when assessing its value. TNA’s brand damage might even be detrimental to the platform it’s broadcast on if the goal of the platform is to be a prestigious destination for wrestling fans. That said, TNA’s TV product improved this year; Matt Hardy’s new gimmick has gotten over well with many fans; however recent news of TNA’s financial troubles and lawsuits haven’t helped its image. Additionally, it would be out of character for WWE to do business with a promotion it’s gone out of its way to avoid naming on-air for the last fifteen years or so. Then again, there’s a lot that’s happened in 2016 and which may happen in 2017 that’s out of character for WWE.

Other viable non-English language brands worthy of consideration include Dragon Gate, CMLL, DDT, Stardom and Big Japan. For these promotions; as in the cases of ROH, TNA and Lucha Underground; there may be complications related to existing distribution partnerships that could prohibit reasonable deals.

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