Professional Wrestling Just Bodyslammed Their PPV Business Model

from the mind-equals-blown dept

World Wrestling Entertainment, Inc., or the WWE, has previously not been known as the kind of company that is forward-looking in their business model efforts. The purveyors of professional wrestling made many lists of companies in support of SOPA and CISPA, while CEO and frontman Vince McMahon has, in the past, been quite lawsuit-happy when it comes to even the most modest relation to company trademarks. All this was done as the company dragged its feet more doggedly than any other sports entertainment company in holding onto their now-iconic pay-per-view business model. Even as they signed more and more network and cable television deals, those broadcasts all seemed to be chiefly used to push fans towards live events and the big events broadcasted solely on PPV.

And now, with a suddeness that is a little breathtaking, the WWE is leaping into the modern era with both feet in a way that far surpasses their more legitimate sporting brethren.

Starting on February 24, wrestling fans are going to be able to sign up for the WWE Network, an online 24/7 channel that will stream all of the company's 12 monthly pay-per-views, including Wrestlemania, and offer all of those, some original programing, "years" of old Raw and Smackdown episodes and... every single PPV show from WWF/E, WCW and ECW history. And NXT and Superstars. And live pre and post-shows for Raw and Smackdown. All of that for just $10 a month, with a six month commitment. That puts the initial bill at $60.
That math is extreme, to say the least. Comparisons to what the WWE was asking their fans to pay in the PPV model were far more expensive, without even the most modest offering online in comparison. For them to now offer streaming of everything at that kind of price represents a huge departure that simply has no equal amongst professional sports. I'm not much of a professional wrestling fan, but I'm rooting for this to work wildly enough to grab the attention of the NHL, NBA, NFL and MLB, who offer online streaming services, but with more restrictions and price barriers than I care to recall.

So, why are they doing this? Well, likely the biggest reason is that the company can see the writing on the wall when it comes to how people today expect to get their entertainment.
WWE will still offer their 12 big shows through PPV, if people are interested, but the forecast here is pretty clear: PPV is the fool's option going forward. WWE does still broadcast its two big weekly shows, Raw and Smackdown, on cable. It will continue to for the foreseeable future. But everything else? It's online now and it's just made the gaming consoles and handheld devices of wrestling fanatics like myself much more likely to be the main portals through which we get our fix. Screw the cable box.
That reference to gaming consoles? Yeah, the WWE has worked out deals with Sony and Microsoft to offer this streaming service throgh the last and new generation of consoles. Which is probably the other reason they're doing this: they're grabbing up new, younger customers with a streaming service that will bring in regular, predictable revenue. Rather than having fans that might save up to buy one or two PPV events a year, they're giving them everything at a cost that's reduced but repeated. It's a tradeoff that benefits their fans and themselves as a matter of scale and predictability. If it takes off, it's going to be a huge win all around.

In other words, despite its history, the WWE appears to be trying to give their fans what they want, how they want it, at a price they're likely to be willing to pay. Considering that their events have been illegally streamed for some time now, often at a lesser quality than a legitimate stream will offer, this is competing with free on a level other professional sports (other than, perhaps, the NCAA basketball tournement) haven't even tried. For sports fans, you should be hoping this succeeds in a big way.



Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Rabbit80 (profile), Jan 10th, 2014 @ 1:59am

    Lets hope..

    ...that they don't attempt to impose silly regional blocks and that this service is available worldwide!

     

    reply to this | link to this | view in thread ]

  2.  
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    Ninja (profile), Jan 10th, 2014 @ 2:34am

    Oh. I'd make a joke with cows or something but my brain went bluhbluhbluhbluh with this. You know, sanity in the entertainment industry, sanity in the sports industry and forward thinking all at the same time. Mind boggling.

     

    reply to this | link to this | view in thread ]

  3.  
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    Ninja (profile), Jan 10th, 2014 @ 2:35am

    Re: Lets hope..

    If this happens I'll stockpile supplies in preparation to the zombie apocalypse.

     

    reply to this | link to this | view in thread ]

  4.  
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    Jay (profile), Jan 10th, 2014 @ 3:26am

    All this was done as the company dragged its feet more doggedly than any other sports entertainment company in holding onto their now-iconic pay-per-view business model.

    I think that when you consider how much MMA has been fighting for that title, I think they could get a championship belt for staying in the 90s.

     

    reply to this | link to this | view in thread ]

  5.  
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    Anonymous Coward, Jan 10th, 2014 @ 3:56am

    Hell fucking yeah!

    That about sums it up.

     

    reply to this | link to this | view in thread ]

  6.  
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    Anonymous Coward, Jan 10th, 2014 @ 3:59am

    i hope they make a better job of this than the entertainment industries have done with their streaming offerings! too slow (so keeps buffering), piss-poor picture quality, too expensive and movies too friggin' late so no one wants to watch them!!

     

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  7.  
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    Anonymous Coward, Jan 10th, 2014 @ 4:19am

    I used to watch WWE when younger but stopped for a long time. This is honestly making me consider paying the monthly fee to watch some of the old school rivalries.

    This is an amazing move going forward kudos to WWE

     

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  8.  
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    Anonymous Coward, Jan 10th, 2014 @ 4:21am

    Re:

    TBH I know everyone will hate me for this but UFC recently opened fight pass which is $10 a month to watch the entire back catalogue with exclusive fight cards only available online.

    You still have to pay for PPV but for such a backwards company supporting SOPA etc it is kind of a leap forward.

     

    reply to this | link to this | view in thread ]

  9.  
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    Anonymous Coward, Jan 10th, 2014 @ 4:27am

    Either Hell just froze over or this is one of the signs of the coming apocalypse. I thought this sort of stuff would happen after the NSA promises publicly to respect all Amendments...
    Kudo's to WWE for embracing the future.

     

    reply to this | link to this | view in thread ]

  10.  
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    Anonymous Coward, Jan 10th, 2014 @ 4:50am

    there has to be a catch .right ,like offering up your first born to cthulhu.

     

    reply to this | link to this | view in thread ]

  11.  
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    Guardian, Jan 10th, 2014 @ 5:00am

    WWE killed the sci fi channel

    SCREW THE WWE

     

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  12.  
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    OldGeezer (profile), Jan 10th, 2014 @ 5:18am

    This will work. I have never been a fan of wrestling but I have known a lot of guys that are. Back in the 80's I had a 10 foot dish and the local cable company did not offer any pay per view. 5 or 6 guys I worked with would pool their money for me order events and come over to my place to watch events. The cost was usually about $50 so this shows that wrestling fans are willing to pay. Figuring in inflation that would probably be like $100 today.

     

    reply to this | link to this | view in thread ]

  13.  
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    Corwin, Jan 10th, 2014 @ 5:24am

    Vince McMahon IS a business genius.

    He's the guy who took a statewide comapny to DEVOURING its competition, making it a national promotion, then updating its product to compete with the new threat made of money that popped up (WCW), winning the ratings war to the point he bought his opponent for an humiliating price, and now launching a futuristic distribution model that actually sells a flat access to approximately the whole of a century of existence of a entire medium.

     

    reply to this | link to this | view in thread ]

  14.  
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    Dreddsnik, Jan 10th, 2014 @ 5:34am

    Re: WWE killed the sci fi channel

    "WWE killed the sci fi channel" .. so much THIS.

     

    reply to this | link to this | view in thread ]

  15.  
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    silverscarcat (profile), Jan 10th, 2014 @ 5:41am

    Re: WWE killed the sci fi channel

    True, but give them credit for adapting at least.

     

    reply to this | link to this | view in thread ]

  16.  
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    Vidiot (profile), Jan 10th, 2014 @ 5:51am

    Re:

    I think Cthulhu retired from wrestling last year. Still see him on infomercials, though.

     

    reply to this | link to this | view in thread ]

  17.  
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    dburt, Jan 10th, 2014 @ 6:08am

    $10 a month is a little high. I pay something like $8 a month for Netflix... and I can watch more than just wrestling. They need to do better than that.

     

    reply to this | link to this | view in thread ]

  18.  
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    S. T. Stone, Jan 10th, 2014 @ 6:10am

    Re: Lets hope..

    They are working to bring the service to various regions around the world, though (obviously) it'll start off as an America-only service.

     

    reply to this | link to this | view in thread ]

  19.  
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    Anonymous Coward, Jan 10th, 2014 @ 6:13am

    Re: Lets hope..

    Too late. US only for this year and expanding into other countries next year. I've already heard from many angry Canadian fans who are upset they won't be able to order this next month.

     

    reply to this | link to this | view in thread ]

  20.  
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    Anonymous Coward, Jan 10th, 2014 @ 6:18am

    Re:

    They're partnering with MLB Advanced Media to handle the streaming end, so I would expect similar quality to whatever you get watching baseball games online.

    One minor quibble is that they're going to be streaming in 720p while all of their HD content has been filmed in 1080i. I don't know if it is a bandwidth problem, something with MLB's backend or what, but they haven't made mention of any intention to stream anything beyond 720p.

     

    reply to this | link to this | view in thread ]

  21.  
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    Just Sayin', Jan 10th, 2014 @ 6:24am

    Nice article, but...

    I read the article here, and then went to read the source article. I was a little surprised (not really) to find out that the quotes in your article here aren't from the WWE, rather they are only the personal opinion of Stephen Totilo, a blogger.

    His take on their strategy is nice, but only an opinion. The WWE has not said that PPV is a fool's option going forward. That is Stephen's opinion, not a quote of anything WWE said.

    Further, it looks more like a way to "extend and profit" mostly from their massive back catalog, and to build a bigger fanbase for the PPV events. They aren't replacing PPVs with streaming, it would seem more like they are trying to reach a bigger audience - I can picture those who don't control the household PPV buying as being a great target, high schoolers who would love to see the PPV events but their parents won't buy it on cable.

    So it's an interesting story, but an opinion on an opinion piece and leaving the quotes out there as if the WWE said them is pretty poor writing.

     

    reply to this | link to this | view in thread ]

  22.  
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    Anonymous Coward, Jan 10th, 2014 @ 6:25am

    Re:

    I think the price is in line with what other streaming services provide. ESPECIALLY if you have any interest in the future live pay per views. Each one of those monthly shows run in the $55 to $65 range. Basically if you would order just one ppv in a six month period, the streaming network ends up being a better value.

    WWE also has a huge tape library they have bought up over the years. Over 100,000 hours of footage from many promotions, plus their ongoing shows. And you would THINK that since they own all of this footage and produce it themselves that it would be immune to the disappearing act other licensed streaming content is subject to. Hopefully once a program is uploaded to the network, it is there for ever.

     

    reply to this | link to this | view in thread ]

  23.  
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    Anonymous Coward, Jan 10th, 2014 @ 6:27am

    Re:

    When your primary strategy of beating the internet fails miserably (and because of the stupid grassroot aspect you cannot control in the extremely dirty world of policymaking!), you move on to plan B: Join them!

    When the lobbyists are claiming how the world will go under unless such and such is made into law, it is a business strategy. Don't think for a second they are unable to transition. It is just much easier to fight changes if they seem economically uncertain or unattractive.

     

    reply to this | link to this | view in thread ]

  24.  
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    S. T. Stone, Jan 10th, 2014 @ 6:32am

    Re:

    For a wrestling fan, ten dollars a month (per a six-month obligation) provides excellent value for what WWE has to offer with The Network.

    The average monthly PPV from WWE costs around sixty dollars in HD, and the annual WrestleMania event costs at least ten dollars more. Buying the PPV gives you...well, the opportunity to watch the PPV and nothing else. A dedicated WWE fan could spend upwards of 800$ USD per year just to watch every PPV the company puts out, and that dosh gives them little ROI other than the opportunity to watch the PPV live on TV/streaming devices instead of a crappy illegal stream.

    With The Network, WWE not only cuts out the PPV middleman (which ensures higher profits from Network subscriptions), but gives fans an excellent ROI for the cost of a single monthly PPV: six months' worth of Network service, which includes the live twenty-four-hour linear "network" and the on-demand "Vault" — both in 720p HD. The linear network includes every monthly PPV (aired live, no less!) as a doesn't-cost-extra part of the package — and WWE made sure to launch this close to WrestleMania 30, because it'll air that PPV (its biggest of the year) on The Network in addition to regular PPV outlets. The "Vault" will include (according to WWE's presser) every PPV from WWE as well as defunct companies World Championship Wrestling and Extreme Championship Wrestling (a promise that would provide around one thousand hours' worth of content on its own), on-demand replays of WWE's weekly shows, on-demand replays of Network-exclusive content, and anything else WWE can find within the hundreds of thousands of hours of wrestling footage it owns as part of its massive pro wrestling video library (which stretches across several decades and includes numerous now-defunct organizations on top of its own in-house footage).

    800$ USD a year to watch thirty-seven hours' worth of PPVs as they air vs. 120$ USD a year to watch several thousand hours' worth of pro wrestling programming pretty much whenever and wherever you want — try and figure out which side wins that ROI Steel Cage Match.

     

    reply to this | link to this | view in thread ]

  25.  
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    Dark Helmet (profile), Jan 10th, 2014 @ 6:37am

    Re: Re:

    "They're partnering with MLB Advanced Media to handle the streaming end, so I would expect similar quality to whatever you get watching baseball games online."

    I subscribe to the MLB.TV package and I can tell you that the streaming quality has ALWAYS impressed me. No, I don't think it's in 1080, but the streams are reliable and in HD. I wouldn't be surprised if we saw 1080 coming down the line when higher speed internet becomes more ubiquitous. Remember, tons of baseball fans using that service live in places where high speed internets aren't a thing....

     

    reply to this | link to this | view in thread ]

  26.  
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    S. T. Stone, Jan 10th, 2014 @ 6:39am

    Re: WWE killed the sci fi channel

    No, technically, NBC/Universal killed Sci-Fi in favor of SyFy; it just used WWE (by way of its ECW on SyFy weekly show) to put the nail in the coffin.

     

    reply to this | link to this | view in thread ]

  27.  
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    S. T. Stone, Jan 10th, 2014 @ 6:40am

    Re: Re: Re:

    WWE promised 720p for both the live "linear" network and the on-demand "Vault" content.

     

    reply to this | link to this | view in thread ]

  28.  
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    DannyB (profile), Jan 10th, 2014 @ 7:02am

    Dear WWE viewers

    Welcome to the 21st century! I hope you enjoy it.

     

    reply to this | link to this | view in thread ]

  29.  
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    DannyB (profile), Jan 10th, 2014 @ 7:04am

    Steel Cage Match

    In one corner we have Reality. In the other corner, working together, Big Copyright and its assistants DRM and Levy.

     

    reply to this | link to this | view in thread ]

  30.  
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    Anonymous Coward, Jan 10th, 2014 @ 7:08am

    I am VERY excited about the network and think it is a fantastic step forward and provides the consumer tremendous value. Funny that I would be much colder on this if it was a traditional cable channel or premium channel like WWE originally tried to sell it to MSOs as. WWE wanted to be paid by the cable companies to carry it, but they couldn't get a single provide to bite. Then they tried to pitch it as a premium channel, and still no providers wanted to carry it.

    I am also very curious how it will impact their bottom line. WWE makes the bulk of their income now from TV rights fees, which will remain in place, assuming their new TV deal goes according to plan in the next year or so. What I see this making a huge dent in is their traditional PPV business (duh) as well as their home video division (which currently brings in roughly $30 million a year).

    If they upload all of their new home video releases, who outside of hardcore collectors or people without decent Internet would actually buy the discs? Or do they go with some sort of time window to protect physical releases before adding them to streaming? Cut out the bonus features and extra matches like they did with their Netflix releases?

    DirectTV has already issued a statement threatening to drop WWE's PPVs from their service. I wouldn't be surprised if other providers make similar noise, or even follow through.

    I'm curious to see what their actual offering ends up looking like. If it takes off and is at least moderately successful, it will protect WWE in the chance that they ever lose their TV deals.

     

    reply to this | link to this | view in thread ]

  31.  
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    DannyB (profile), Jan 10th, 2014 @ 7:09am

    Re:

    They always embrace the future once it becomes the present or past.

    Player Pianos
    Phonograph recordings
    Radio
    Television
    Tape recording devices and cassettes
    VCR
    DVD
    MP3s

    And coming soon . . . internet streaming to any of your devices, anytime, anywhere.

     

    reply to this | link to this | view in thread ]

  32.  
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    Anonymous Coward, Jan 10th, 2014 @ 7:24am

    For sports fans, you should be hoping this succeeds in a big way.

    Why? What would that do? The MAFIAA and sports leagues will point and say that, "It's a fluke.", "That model is unsustainable for us.", or "Our customers don't want it."

    For these guys, seeing something work doesn't mean that they'll pick it up.

     

    reply to this | link to this | view in thread ]

  33. This comment has been flagged by the community. Click here to show it
     
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    out_of_the_blue, Jan 10th, 2014 @ 7:59am

    HOLY COW. $10 a month for wrestling, and Timmy thinks the fans are smart!

    I read this with growing horror and laughter. My bet is WWE found that most fans are simply too stupid to do illegal downloads. Wrestling is surely at the bottom of the mindless crap pile, or so I hope. Therefore any "competing with free" (like how you worked that silliness in, Timmy) exploitation of mental defectives can't augur any new business models.

    Congratulations, Timmy for yet another low. Your ability to be pompously silly and apparently take your childish notions seriously keeps the yuks coming.

    Ya say ya can't compete with free, Binky? -- It's easy! Just forget about "sunk (or fixed) costs"!!!
    http://www.techdirt.com/articles/20070215/002923/saying-you-cant-compete-with-free-is-sayin g-you-cant-compete-period.shtml

    03:55:09[d-026-0]

     

    reply to this | link to this | view in thread ]

  34.  
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    S. T. Stone, Jan 10th, 2014 @ 10:22am

    Re: HOLY COW. $10 a month for wrestling, and Timmy thinks the fans are smart!

    WWE found that most fans are simply too stupid to do illegal downloads.

    On the contrary: WWE pay-per-view events get pirated/illegally streamed at rather alarming rates. WWE took The Network to the Internet partially to counter all the illegal streaming. Offering a higher-quality alternative to a once-per-month illegal livestream at low cost — and one that includes thousands of hours of other WWE-owned content for the same cost — makes The Network look like an awfully good deal in comparison.

    Wrestling is surely at the bottom of the mindless crap pile, or so I hope.

    Eh, don’t sell wrestling fans short. I’ve seen plenty of excellent writers expound upon the artistic merits of pro wrestling and its unique storytelling methodology. (I recommend K. Sawyer Paul, David Shoemaker, and T. Holzerman.)

    Therefore any "competing with free" […] exploitation of mental defectives can't augur any new business models.

    I hope you didn’t mean to call pro wrestling fans ‘mentally defective’ just for liking that specific form of entertainment. The vast majority of fans know of its staged nature, but don’t believe that takes away from the work every man and woman who steps into the ring does to entertain millions of fans around the world.

    And yes, WWE has competed with ‘free’ for years. Ever since the rise of streaming video content and Bittorrent, WWE has seen PPV revenues (and TV ratings) drop in part because of illegal livestreams and filesharing. The Network gives WWE a chance to lay the smack down on the illegal ‘free’ content by offering a high-quality service with tons of content for an affordable price.

    Now, I know a Raw feed of WWE programming may not appeal to you or the NXT person, but a Main Event-caliber idea such as the WWE Network deserves a bit of Thunder behind it — a little Nitro, if you will. WWE needed to take Extreme measures to ensure the future of the company and its Superstars. This announcement has lots of Velocity behind it, so don’t try to cool the Heat off of it too quick. Give it until Saturday Night, at least.

     

    reply to this | link to this | view in thread ]

  35.  
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    Nigel Lew, Jan 10th, 2014 @ 10:37am

    Tim. Do you even wrestle bro? Its suplex not bodyslam.

     

    reply to this | link to this | view in thread ]

  36.  
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    Rikuo (profile), Jan 10th, 2014 @ 11:43am

    Re: Vince McMahon IS a business genius.

    I'd hesitate to call this a "futuristic business model" because then that would imply that his company was the first to start streaming. Netflix anyone? (Or was there someone before even Netflix?) Especially since the content as reported by other commentators here isn't even going to be in 1080p, what with 4K just round the corner.

     

    reply to this | link to this | view in thread ]

  37.  
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    Rikuo (profile), Jan 10th, 2014 @ 11:46am

    Re: Re: HOLY COW. $10 a month for wrestling, and Timmy thinks the fans are smart!

    I've never watched wrestling, have no plans to but even I had to chuckle at what you did in the last paragraph. Good one!

     

    reply to this | link to this | view in thread ]

  38.  
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    dec, Jan 10th, 2014 @ 12:15pm

    Hell. At that price I may pay for it just to send the message to other sports broadcasters.

     

    reply to this | link to this | view in thread ]

  39.  
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    Anonymous Coward, Jan 10th, 2014 @ 1:18pm

    A clever plan that might lead to success?

    Could Bobby "The Brain" Heenan be involved?

     

    reply to this | link to this | view in thread ]

  40.  
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    S. T. Stone, Jan 10th, 2014 @ 1:49pm

    Re:

    WILL YOU STOP!?

     

    reply to this | link to this | view in thread ]

  41.  
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    PRMan, Jan 10th, 2014 @ 2:21pm

    Re:

    "has no equal amongst professional sports"

    Actually, this offering is extremely similar to UFC.tv.

     

    reply to this | link to this | view in thread ]


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