Why Is WWE Creating Propaganda for Saudi Arabia?

Why Is WWE Creating Propaganda for Saudi Arabia?

Why Is WWE Creating Propaganda for Saudi Arabia?

Friday’s Crown Jewel in Riyadh will likely be another infomercial for the monarchy disguised as pro wrestling.

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In the aftermath of the assassination of Jamal Khashoggi inside Saudi Arabia’s consulate in Istanbul, the reaction in the business community was swift: Several American businesses received pressure to stop doing business with the kingdom, and many pulled out of the country, at least for the time being. But others have stuck with Saudi Arabia, including the one whose enmeshment with the royal family has probably received the most attention in recent weeks: World Wrestling Entertainment, the largest purveyor of professional wrestling on the planet.

This Friday, exactly one month after Khashoggi was killed, WWE will produce their second show in a partnership with the Saudis, WWE Crown Jewel in Riyadh. The first show, April’s Greatest Royal Rumble in Jeddah, is basically Exhibit A for the backlash against WWE: The event was almost entirely a lengthy propaganda infomercial for the kingdom, pushing local tourism, the claimed social progress of the country under Crown Prince Mohammad Bin Salman, and hostility towards Iran.

WWE is on the verge of bringing in significantly higher profits than ever before when they start their new domestic TV contracts next year, so the Saudi deal wasn’t an existential necessity for the company. So while it’s fairly simple to understand why WWE made a deal with Saudi Arabia—since they were far from the only ones to do so—it’s a little more complicated to understand why the WWE brass would agree to this deal, and all of the geopolitical ramifications that come along with it.

The original lifeblood of the world’s most popular “entertainment sport” was entirely made up of ticket sales. Almost nobody in the wrestling space got paid for their TV shows, so instead they would pretty much give their programming to stations in exchange for promoters being able to air localized interviews previewing each town’s weekly, biweekly, or monthly show. Vince McMahon was the man who really changed this landscape: He took his WWE (which at the time was known as the World Wrestling Federation, or WWF) and got the ball rolling on diversified income streams. McMahon’s company started selling merchandise in arenas (which Japanese and southeastern promoters had pioneered), making licensing deals for retail products, and began aggressively marketing home video and pay-per-view. It was incredibly volatile, though—“pro wrestling is cyclical” is the common cliche—and a lot could change on a whim. Making informed decisions about those changes could be difficult, and getting reliable purchase data from pay-per-view companies still takes months, even these days.

In the last several years, WWE has sought to change as much of that as possible, trying to find reliable, steady revenue streams. Some of it was opportunistic: The sports broadcasting rights bubble, with networks shelling out big money for theoretically “DVR-proof” live programming, was something that they could easily exploit with their own slate of live programming, for one. In the same vein, they made the move to abandon traditional pay-per-view, launching WWE Network in February, 2014, as a subscription service anchored by the monthly specials that had previously been pay-per-view events, albeit for about 20% of what they had been charging for those shows. With a lower price than the outdated pay-per-view model, worldwide availability, and the benefits of people forgetting about their subscriptions, WWE Network has achieved a steady state of well over 1.5 million subscribers.

WWE Network also happened to launch around the time of the company’s last domestic TV negotiations. On an investors’ call, Vince McMahon infamously promised that an analyst could put him in a hammerlock if WWE didn’t manage to double the rights fees in the new domestic deals. Even though they only got an increase of about 50%, that hammerlock never happened (and a subsequent shareholder lawsuit went nowhere). As a result of increased competition from broadcasters for their programming, WWE finally did get to double those rights fees in this year’s negotiations for Fall 2019 contracts with USA Network and Fox.

So while WWE has less of a need for the Saudi deal than ever before—worth somewhere from $20 million to $45 million in revenue per event and much less in profits, based on the hazy details in their SEC filings—the deal nevertheless fits into WWE’s new overall revenue strategy. The modern WWE is all about guaranteed or near-guaranteed money, removing the volatility of the traditional wrestling business from the equation. Vince McMahon doesn’t even have to be motivated to put together quality shows regularly anymore, because the biggest revenue streams have little or nothing to do with that sort of micro-level detail. Throw in how hard WWE has stressed the need for record revenue in the past at times when profits weren’t super high, and it becomes more clear how, at least fiscally, the Saudi deal made sense to McMahon and his family.

But then comes the geopolitical ramifications of this deal, which WWE seems to have done little to dampen in the agreement’s details. We don’t know what is actually required of WWE contractually, with claims of confidentiality clauses keeping them from disclosing more than the event revenue, which itself is relegated to a line item labelled “other.” But based on how the first show went, the propaganda aspect pretty much has to be contractually mandated.

If the repercussions of producing agitprop for a theocratic monarchy were considered at WWE headquarters, it likely wasn’t seriously. The easiest explanation for that, besides just greed, is a fairly simple one: While mainstream coverage of WWE and professional wrestling in general has steadily increased over the last seven or eight years, thanks to more fans in editorial roles at news organizations (especially sports and pop culture websites) and a history of reliably bringing in page views, critical coverage of the sport hasn’t boomed at the same level. It’s not as bad as it was when, in 1992, during a Donahue episode about sexual abuse and harassment allegations within WWE, an audience member expressed confusion at what everyone was worked up about since wrestling is “fake.” But pro wrestling is still a niche entertainment product, which means less outside scrutiny, even at a time when WWE is more financially successful than ever.

Crown Jewel is going to be a big test of just how penetrable that niche forcefield is. HBO’s Last Week Tonight with John Oliver has skewered WWE and the Saudi deal in its last two episodes, viewed by millions of people on TV and online. Crowds at WWE events are booing references to Crown Jewel, with WWE even having the gumption to run a plug for Friday’s card during this past Sunday’s all-women’s event, Evolution. (In what most likely isn’t a coincidence, women are barred from appearing on the Saudi shows.)

Things are changing outside of WWE, and if Crown Jewel is like Greatest Royal Rumble—and there’s no reason to think that the Saudis will show restraint in propagandistic efforts right now—then the outcry could be much louder than WWE expected. If WWE stock tumbling since the decision to not cancel the show is any indication, then the backlash is already happening.

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