[Document subtitle]

By: Group 09 (Section A)

 Assignment 1

Case Study: World Wrestling Entertainment, Inc.

Publisher: Harvard Business School
Date of Publication: 10 January 2019
Case Background:
WWE started its operations in 1952 under the responsibility for McMahon Sr. as the Capitol Wrestling
Federation. Since 1952, the WWE has experienced three name changes. The WWF saw such stars like
Hulk Hogan, Andre the Giant, Bret Hart, etc. Throughout the time of WWF, Vince McMahon brought his
item to pay for every perspective that made enormous income for WWF at that time. The WWE is not
only the greatest wrestling company in the United States, yet it is additionally the greatest wrestling
company in the world. The business has attained such great success by spreading the WWE everywhere
throughout the world through global development. They have gone worldwide into more than 145
countries.
WWE had evolved from a company centred on promoting live wrestling events to a fully integrated media
and entertainment company. It employed 800 staff members and earned more than $800 Million in
revenue (as of 2018). Company claims that its mission is to bring smile on the faces of its audience,
through the means of compelling story-telling. WWE made over $150 million from the live events held
in 2017, WrestleMania staying its flagship event. They build upon storylines for WrestleMania through
its various smaller events. The shows are customized based upon the local audience differing from
country to country

Timeline:

Traditional Media Retooling for

Model transformation New Media Model
1999- - Launched direct to
2011- -WWE Network
-TV, Live events, Pay- 2015+
2010per-view 2014 consumer WWE -Sustainable growth
network -Global expansion
-Powerful Brand -Invested in new New media ecosystem
-Grew Globally model
 Business Segments:

WWE

Ad supported digital and

Pay television Direct to consumer
social

PPVs (Playoffs and

In-ring weekly programs In-ring highlights
finals)

Documentary in-ring weekly programs Short form original

Reality Documentary/Lifestyle

Problems Identified:
Problem identified in the case are as follows:

1. Falling Viewership of WWE due to other shows

In 2017, Pay-per-view revenues at WWE Network were $14 Million, down from $20 Million and $83 Million in 2013.
Also, in 2017 company released new home video products and shipped 1.3 Million DVD and Blu-Ray units and
revenues generated from sales had decreased to under $10 Million annually.
2. Whether to launch Ronda Rousey or not
McMahon questioned the Rousey’s ability to transform from a UFC player to WWE entertainer. The transition may
be difficult because there is not just one-on-one fight, but also to engage & entertain fans.
3. If launched, then how to structure the deal
It is also necessary to evaluate that how much it is going to cost and what value can Ronda bring to WWE. The
minimum guarantee involved is also expected to be the highest, which means it is important to analyse that whether
she can out-earn her guarantee. Thus, what kind of offer should be made to Rousey makes the most sense and how
could it be made sure that signing Rousey would bolster WWE’s business.

CASE ANALYSIS
1. WWE is an entertainment business and not just about fighting
a. As per Vince McMahon, WWE is an entertainment business and not just about fights. He
elaborated on how WWE built compelling experiences for fans: WWE have protagonists and
antagonists among their characters. From there, WWE created some sort of conflict. It doesn’t
always have to be physical, but the conflict needs to be between the characters. And then,
 after they have established the conflict, they create resolution. That is always the big finish any
blockbuster would need.
b. WWE is different from other fighting platforms in manner that it developed and presented
scripted hero-versus-villain storylines featuring its wrestlers at live events. It made sure that
the audience can connect to the issues. As per WWE the two wrestlers are fighting for a reason
and not just to earn, this made the fights much more interesting and relatable.
c. All the WWE stars are trained professionals who make sure that the stunts they perform are
safe for their opponents. Both the fighters trust the skills of their opponents and try to make
sure that they don’t hurt each other. At the same time they make the fight look as horribly
physical as it can be.
d. For WWE the ‘it’ factor is of foremost importance. Developing a connection with the audience
is a crucial part. As per Levesque, The worst thing in the world for WWE is Silence. If the
audience is quiet, you’re out of business soon. WWE performers need to elicit a reaction from
the crowd. For WWE, their fans are a part of the show. They cheer, they boo, they make signs
and they actually impact what happens in the ring. If their audience is not reacting the way
they want them to, WWE will have to change course.
e. The WWE superstars are not directly sent to fight in the biggest events. Instead they are
promoted on the basis of different levels, starting from the NXT. A fighter is given a small
platform in the form of live events having an audience from 1000 to 2000, and from there on
they build their characters and carry their audience with them climbing the ladder of
promotion to reach the biggest events of WWE.

2. WWE positioning- What has been working for them so far

a. WWE has storyline driven fights with rehearsed and practiced fighting manoeuvres to entertain
the audiences. 
b. The storyline is driven by the reaction of the audience and the maker's belief, if a wrestler is
unable to elicit a response from the crowd, they will run out of business.
c. The “protagonist vs antagonist” approach in their characters and stories ending with the
resolution and a big ending is the real crowd puller.
d. The wrestlers compare their fights with dance performances to show how it isn’t just the
audience that enjoys but also the wrestlers.
e. This approach has helped WWE is creating a loyal fan base and loyal wrestlers for itself in the
entertainment industry.
f. Their plan to go international with regional language is good as they have gained publicity in
various countries which include Germany, India, etc.
g. Since the top-rated wrestlers also work in movies and other media platforms simultaneously,
the fan base is increasing and this integration is benefiting WWE.

3. Need for promoting Women’s wrestling

a. In 2015, RAW featured only 30 seconds of women’s wrestling of the total runtime of 3 hours.
This instigated a strong outcry from fans. The hashtag #givedivasachance began trending on
social media. This episode highlighted the fact that women were treated as secondary or
tertiary characters in WWE stories. The audience felt that it was time that women were
portrayed more than just divas and were given more importance. The audience demanded
 longer matches, more athleticism, better character development and better stories for female
wrestlers.

b. WWE was quick to take this demand from viewers into consideration and began to promote
women’s and men’s wrestling with same zeal and retired their ‘divas’ division. It placed greater
emphasis on the advancement of female wrestlers’ careers.

c. Hence, now it was imperative that they delivered on their promise of giving substantial screen
time to women wrestlers. This would mean lesser time for men’s wrestling which is already
doing great and has a large fanbase. In order to ensure the women’s wrestling is at par with
men’s wrestling and connects with the audience at the same level, they would need a proper
cast and face for women’s division. Ronda Rousey having great popularity and a larger fanbase
owing to her Olympics win and UFC championship can provide WWE women’s division the
required boost.

4. Is Ronda a fit for WWE?

a. Ronda being a Women fighter can help WWE respond to the hashtag campaign which had a
negative impact on the company’s image.
b. She is famous in the athletic world as she won the bronze medal in the Olympic. She fought &
won 4 matches in strike force (a mixed martial arts & kickboxing organization). She was a first
female fighter in Ultimate fighting championship & won six bouts. She debuted in major
Hollywood movies like Expendables, Entourage & fast & furious 7 as a supporting role, so she
has a prior experience of working with a script.
c. Since Ronda hails from California, she might be able to draw domestic audience if paired with
loads of emotion & storyline. California is a part of North America which is the highest
contributor in WWE revenue.
d. She can also capture the whole new target audience that wants to view women wrestling. This
will help WWE access the untapped market.

5. What could go wrong?

a. WWE likes to invest in people who would stay with them for longer periods. Ronda has been
appearing couple of films recently and WWE players have a history of gaining stardom once
they reach Tier 1. They also need to consider the possibility that Ronda might just enter WWE
with an aim of getting more stardom and promoting her movie. She might not stay with them
for long period of time. Thus, they need to be sure of her intentions first.
b. Another concern is whether she will be able to connect with the audience on the basis of the
storyline since audience’s satisfaction loyalty is a crucial factor that has a profound effect on the
growth and success of WWE
According to APOSTLES Model
Customer loyalty and satisfaction are very close terms, one is related to the other. However, they
are not equivalent. Customer loyalty is a bigger concept and partially stems from overall
satisfaction that basically describes to what extent a specific need is fulfilled by a product or
service. Loyalty, on the other hand, is a the feeling of attachment to or affection for a company’s
people, products, or services. Such feelings are reflected in customer behaviour.
 Since Ronda already has a fan base that she is expected to bring to WWE, if she is unable to
connect with the audience in terms of the storyline her audience might end up in the “Hostage”
segment instead of the Apostle segment. This will lead to a low ROI for WWE.

6. Ronda as a Brand:
a. Ronda Rousey accumulated victories on various platforms, her public profile grew globally. She
has a good successful career in films, as a face for many brands, with high popularity. After a
career gap of 13 months, Ronda made a come back to UFC’s octagon and charged 3 Mn $ for
UFC last fight which was equal to Conor McGregor, who is the best fighter in light weight men’s
category.
b. From above scenario we can assume that Ronda Rousey won’t charge less than highest paid
male athlete of WWE.

Payment Prediction of Ronda Rousey

  2015 2016 2017 2018
Ronda Rousey 3 3.32 3.65 4.01
WWE Revenue 658.8 729.2 801 881.1
Increase   1.10 1.098 1.1

Assuming 10% Increase in 2018 as per trend

of revenue

c. Above charts shows growth of WWE revenue as per Exhibit-1. In 2015 Ronda charged $ 3Mn,
same is increased with same percentage as that of revenue. For year 2018 increase is assumed
10%. Accordingly expected payment of Ronda Rousey is calculated.

7. If Yes, then which tier should she be introduced in, 1, 2 or 3?

Ronda has a good amount of experience in wrestling industry. She has won various
international level competitions like Judo, Olympics, UFC. She already has a face and
popularity in the fighting industry. She also has entered entertainment industry via movies
in 2014 and 2015, which shows her inclination towards the entertainment business.
While her re-entry into the UFC she charged $3 million, which was equal to the champion of
UFC Conor McGregor. She will not be ready to join WWE for less and would expect pay
similar to top level wrestler of WWE and hence would enter into tier – 1, which is RAW or
Smack Down.

8. WWE’s benefit if they take Ronda

 a. Need for a women wrestling team as they officially closed the diva division and want to
promote women wrestler with the same zeal as men wrestler
The 2015, 3 hours long RAW episode featuring with 30seconds of women’s wrestling
created a strong outcry from Fan side to have more divas fight. Seeing with the demand
from audience end, WWE dismissed there Diva’s division in 2016 and started emphasizing
on advancement of female wrestler. It was the high time when female wrestler moved from
secondary or tertiary characters to primary characters.
b. Want a face for their women wrestling crew where Ronda fits good as a trained wrestler and
has won games on international platforms as Olympics, MMA and UFC
Ronda with a 5 years’ experience in Mixed Martial Arts Fight & UFC together with a bronze
medal in summer Olympics in Judo makes her personality fit for the role of WWE women
wrestler. The personality and fame which she received from her past experience and
achievements may play a vital role to attract more crowd with more interest towards female
wrestling.

Classical Conditioning Theory

Winner

Strong
Woman
WWE Wrestler
Fighter

Entertainer
Each wrestler has his/her own fan base and this fan base perceives the wrestler in a certain way. When
that wrestler joins WWE’s 1st Tier, WWE also gets associated to perceived attributes of the fighter.

Ronda Rousey was playing UFC and won many championships, she has already built her image as a strong
solo fighter, winner of championships and Olympic and judo fighter.

Recently Ronda Rousey recently entered in movies so she’s building her image as entertainer.

Winner

Ronda Rousey UFC Strong Woman

Fighter

Theory of Alpha
 Ronda Rousey Movies Entertainment

Let us analyse this case by bringing in the theory of “alpha” as studied in ethology. In studies of social
animals, the highest-ranking individual is sometimes designated as the alpha. Males, females, or both, can
be alphas, depending on the species. Alpha animals usually gain preferential access to food and other
desirable items or activities. Male or female alphas may gain preferential access to sex or mates; in some
species, only alphas or an alpha pair reproduce. Alphas may achieve their status by superior physical
strength and aggression. The individual with alpha status sometimes changes, often through a fight
between the dominant and a subordinate animal. These fights are often to the death, depending on the
animal.

Even in WWE, we have some wrestlers exhibiting impeccable physical strength and are seemingly
invincible. These characters can be thought of as alphas inside the wrestling ring. But when an underdog,
who does not seem to have as much physical strength, takes up the challenge of fighting the alpha, we see
the audience cheering and supporting the beta taking on the alpha head to head. The audience connect
better with the beta, may be because, they can relate this situation with their lives where they are
dominated by alphas and have to fight with them day in and day out.

Hence, WWE uses this premise of alphas and betas, and the battle between them. WWE can leverage this
concept in case of Ronda Rousey, such that they can portray her as a beta, trying to make her presence felt
in the male dominated alphas. This will set stage for the women’s wrestling in WWE which until now was
dominated by males. The audience may cheer and support Ronda for just taking up the challenge and
bringing in the women’s wrestling to the forefront. She can be the face of women’s wrestling and prove
that women are not just sidekicks and divas, but they have the gumption to fight it out in the ring.