DirecTV Inc.'s one-month truce with World Wrestling Federation Entertainment Inc. ended Tuesday when the grappling promoter announced that it would no longer offer its pay-per-view programming to the direct-broadcast satellite service.
Citing an inability to reach a new contract deal, WWFE said it will prohibit DirecTV from exhibiting future PPV events, beginning with No Mercy
on Oct. 21. DirecTV represents about 15 percent of WWFE's PPV-event revenue.
While neither side would reveal specifics, sources said the dispute revolves around a disagreement over license-fee splits. On top of its 50-percent split, sources said DirecTV wants to receive an additional 7 percent to 10 percent "middleman" fee from WWFE — similar to what cable PPV provider In Demand LLC gets — for distributing the company's popular live professional-wrestling and other related WWFE events.
Last month, WWFE threatened to pull its Sept. 23 Unforgiven
card from DirecTV over the same issue, but the two sides reached an 11th-hour deal for the event.
Calling WWFE's decision "irrational," DirecTV senior vice president of programming acquisitions Michael Thornton said the sports-entertainment company turned down a recent proposal that would have provided it with a revenue split that was "more favorable" than what it gets from the cable industry.
But WWFE president and chief operating officer Stuart Snyder called DirecTV's proposal "worse" than the distributor's previous deal.
"We reached a philosophical difference concerning the [revenue] split and, therefore, could not come to an agreement," Snyder said.
The dispute gives cable a major competitive advantage over its biggest PPV rival. But WWFE has no plans to encourage operators to aggressively market that edge over DirecTV.
He added the company would look at other distribution opportunities, including the Internet and movie theaters, to bring its PPV shows to the widest audience possible.
In Demand senior vice president of programming and development Dan York said only that the network "and its affiliates continue to enjoy a productive and good relationship with the WWF and look forward to making its events available to all consumers."
To make up for the revenue loss from WWFE events, Thornton said DirecTV will place a greater emphasis on selling its PPV movies and out-of-market sports packages.
"It's easier for us to make up the revenue, given our breadth of PPV programming, than it will be for the WWF," Thornton said.